Behind a Big Bet by Top K-12 Philanthropists on a Different Way to Run Schools

photo: Matty Symons/shutterstock

photo: Matty Symons/shutterstock

The Laura John Arnold Foundation and Hastings Fund joined forces recently to launch the City Fund, a nonprofit dedicated to expanding the portfolio school model to districts across the county. The nonprofit is starting out with $75 million over the next three years in funding from the Arnold Foundation. The fund raised an additional $125 million from the Hastings Fund, according to ChalkBeat, bringing the total to $200 million—making this one of the biggest bets on a new education nonprofit in years. 

Going forward, the City Fund will be the primary vehicle for the Arnold Foundation’s education philanthropy, said Helen Spencer, the foundation’s vice president of communications.

The Arnold Foundation is a big champion of the portfolio model, a school governance model that emphasizes giving educators and school leaders more control over the schools where they work and parents more autonomy when it comes to deciding where their kids go to school. Reed Hastings, the founder and CEO of Netflix and the man behind the Hastings Fund, is a dedicated education reformer with a focus on promoting charter schools and school choice. The two models aren’t a perfect match, but there’s a lot of overlap.

The portfolio model embraces a key tenet of the charter movement, which is that the operators of schools should have lots of freedom—on issues like choosing a curriculum, hiring and firing teachers, and budgeting. These leaders should be held accountable by central administrators for student performance, but otherwise given the autonomy they need to create great schools. As with charters, too, the portfolio model envisions parents getting to choose from different schools, ideally with a one-stop enrollment system. 

Charter advocates have long argued that school leaders are more in touch with the day-to-day needs and contexts of their schools and are better equipped to make decisions than district leaders, who are further removed from students. They've also preached that letting students and parents vote with their feet is a powerful catalyst for competition and improvement. 

What's different about the portfolio strategy is that it allows for the inclusion of public schools, but under the governance structure, they tend to look more like charter schools than traditional district schools. As we've reported, K-12 reformers have faced a number of obstacles to scaling charters, and some funders have drifted away from the movement, toward ideas that promise to have greater reach in a nation where over 90 percent of students still go to traditional public schools. The portfolio strategy offers a potentially more scalable and less polarizing path to achieving many of the goals of charter advocates.

As the Center for Reinventing Public Education puts it, the model "moves past the one-size-fits-all approach to education. It puts educators directly in charge of their schools, empowers parents to choose the right schools for their children, and focuses school system leaders on overseeing school success." That all sounds a lot like charters, but without the baggage.

There was already overlap between Arnold’s and Hastings’ education giving, even before the launch of the City Fund. Neerav Kingsland advised both foundations, as CEO of the Hastings Fund and senior education fellow at Arnold. Previously, Kingsland led New Schools for New Orleans, an organization key in pushing for the adoption of the portfolio model in the city. The Arnold Foundation donated millions in support of the New Orleans nonprofit.

Related: Betting on a New Model for Schools: Inside Arnold's K-12 Grantmaking

Kingsland will now lead the City Fund. He announced the fund’s launch and new staff on his blog. The Arnold Foundation’s education team transitioned over to the new fund. That includes the foundation’s education director, Noor Iqbal, and senior education fellows Chris Barbic and Ken Bubp.

It makes sense that LJAF might spin off its education program at this point, after eight years of grantmaking totaling $225.5 million. That work dates back to the foundation's earliest days, and before—one of John Arnold's first big gifts was to KIPP Schools in Houston. But in recent years, LJAF has become increasingly focused on advancing evidence-based policymaking, as well as related (and unrelated) causes like criminal justice reform, restricting sugary beverages, making prescription drugs more affordable, reforming the electoral system, and ending student predatory lending. 

The investment in the City Fund is Reed Hastings' biggest move yet as a K-12 philanthropist, and underscores his ambition to make impact at the national level, after years of mainly focusing on education battles in California. With a fortune now estimated at $3.6 billion, thanks to the soaring value of Netflix's stock, Hastings has the resources to become a larger presence on the K-12 funding scene in coming years. 

Related: Longtime Ed Reformer Reed Hastings Steps Things Up. Where's He Headed?

Beyond drawing from the Arnold Foundation, the new City Fund also hired staff from other nonprofits that support the portfolio model on the national and local levels. Ethan Gray, founder and CEO of Education Cities, joined the team. Education Cities is a national nonprofit that works with city-based organizations pushing for the portfolio model locally. Gray is joined by Jessica Pena, a partner at Education Cities, and Liset Rivera, who coordinated the nonprofit’s events.

Education Cities isn’t the only nonprofit with alumni joining the City Fund. The fund’s new staff also draws heavily from MindTrust, a nonprofit that was instrumental in pushing for the implementation of the portfolio model in Indianapolis. The nonprofit’s founder and CEO David Harris joined the City Fund team, along with Kameelah Shaheed-Diallo, a senior vice president at the organization.

For now, the fund will focus on cities where the Arnold Foundation and Hastings Fund already have ties with a look to expanding elsewhere later on, Spencer said. That means for now, expect grants to go to Indianapolis, Denver and Camden, New Jersey.

Kingsland wrote on his blog about his aspirations for the City Fund: “Cities across the country are constantly innovating, and when a few cities do something that seems to be working, philanthropy can help shine a light on these local successes,” he said. “If other cities are interested, philanthropy can help test these breakthroughs at a little larger scale.”

What’s less clear is whether or not the portfolio model is a success. Critics on one side of the ideological divide argue that the portfolio model reduces democratic control of schools. On the other side, advocates for school choice say the model does not go far enough.

So far, there isn’t enough data to say whether the portfolio model works. Research shows that in New Orleans, student test scores improved after switching to the model. However, that was also accompanied by a decrease in the number of teachers of color and a decline in the number of schools offering Pre-K, according to reporting from ChalkBeat.

Not only that, but the increase in test scores experienced in New Orleans is not universal to all districts that adopt the portfolio model. Several years in, the Achievement School District in Tennessee, which City Fund’s Chris Barbic once headed as superintendent, has seen no bump in scores.