Wrench in the Gears

I wrote the piece below in November 2015 during the lead up to the Every Student Succeeds Act (ESSA), which passed the following month and cemented into place “Pay for Success” finance of education delivery in the United States. The Alliance for Philadelphia Public Schools hosted that post, since I had not yet started my own blog. I am thankful for the hospitality they extended to me then.  I want to re-share it here on Wrench In The Gears, because yesterday Trump signed the bi-partisan HR4174 bill, “Foundations for Evidence-Based Policymaking Act” (FEPA).

This legislation will advance the pay for success model by requiring extensive data collection with delivery of all public services. As a result, all those receiving services, including public school students, will be sucked into a never-ending cycle of micro-data collection for analysis of program “efficacy” in a world where neoliberal austerity, predictive analytics, and digital surveillance has come to rule. It is exactly what the tech, finance, and non-profit sectors have been setting up for many years.

We will soon see more and more “wrap around” services ushered into schools where student data has much weaker protections under FERPA, which Obama gutted, than under HIPPA. Non-profits will be incentivized to see students as potential interventions to be churned through systems of data-collection, offered up to justify their existence and maintain their payrolls. We will see more and more instruction delivered online so that “data” can be captured as “evidence.” This “evidence” will document not just the cognitive skills of children, but their social-emotional states and behavioral “competencies” as well. Of course the venture capitalist “social entrepreneurs” hold all the money and pull all the strings. “Pay for Success” is their game. They will remake the world, including our schools, to deliver the digital “evidence” needed to keep them in yachts and champagne. This will happen against a backdrop of grinding poverty, economic precarity, and militarized policing of low income communities.

At the time, some criticized my analysis. They couldn’t see it three years ago. Re-reading it today, it is clear we are much father down this road. ESSA and WIOA (Workforce Innovation and Opportunities Act) and SIPPRA (Social Impact Partnerships Pay for Results Act) and IIOA (Investing in Opportunity Act) and now FEPA (Foundations of Evidence-Based Policy Act) are all now firmly in place. As I noted on social media yesterday. It seems perhaps now Google is our government, stored on Amazon Web Services and overseen by Palantir. This is a bipartisan program. Much of it was put in place by Obama, and now Trump has advanced the next phase.

For more background on HR 4174 see Cheri Kiesecker’s excellent 2016 post here. One of those testifying in favor of this approach at the time was a representative of defense contractor and NSA service provider Booz Allen Hamilton (see featured image). Video of that testimony is here, timestamp 3 hours 19 minutes.

November 23, 2015

If you read my SRC testimony it paints a troubling picture. Given that my testimony was limited to three minutes, I wanted to add some additional thoughts to the conversation. It’s particularly important to get these ideas out there, because Philadelphia’s mayor elect Jim Kenney and his new Chief Education Officer, Otis Hackney, just took a trip to Cincinnati with the express purpose of learning more about the community school model and how it could work in our city. While Oyler, the school they visited, is lauded for its program, the long term success of the model remains uncertain.

As I see it, two groups are working concurrently on community school initiatives. They hold opposing views about what community schools are. Corporate education reformers talk about eliminating the concept of “seat time,” instead they want to promote the idea that you can learn anywhere at any pace. I see that line of thinking as potentially very dangerous if you’re someone like me who values real bricks and mortar schools as a cornerstone of civil society. At the same time there are an increasing number of people who are involved with community school initiatives on the local level. They see community schools as neighborhood anchors. The problem is that they have absolutely no knowledge that there is another powerful group, the corporate education reformers, including Tom Vander Ark, working to undermine all they are doing.

Meanwhile, the corporate education reformers have set up the legislation so that once a network of non-profit and technological partnerships are in place, human teachers will no longer be necessary for their 21st century version of education. The federal government and partners like Citizen Schools move things along by putting resources behind this “transformation.” It won’t happen immediately. The timeline is probably 10-20 years. So the corporate education reformers can just sit back and wait for the first group, people like us, to do the work of acclimatizing the public to the concept that community=school and school=community. Which will be fine, until one day the neighborhood schools close their doors in favor of an online and outsourced community model and we’ve reached the end game.

I think it’s pretty clear that as a society, we simply don’t have the will to fund schools appropriately. Forty-three school districts in Arizona are now having children go to school only four days a week as a cost-saving measure. On Fridays, some students go to the local Boys and Girls Clubs for a “learning day.” So it looks like we are in the process of outsourcing public education already. When I first learned of this, I thought it would be more in the 5-10 year time horizon. I find it shocking that it’s already happening.

We thought with Pennsylvania Governor Wolf the funding situation would change. I’m still not sure how things will play out. If new funding comes in, and we don’t see librarians, five-day school nursing, counselors, and literacy aides come back to every school quickly, then we’ll know. If the Philadelphia School District instead directs that money to blended learning, we’ll know that they are taking our schools in a completely new direction. Even the article on setting up donated classroom libraries last week-what a farce. Donated bins of books ARE NOT THE SAME AS HAVING A CERTIFIED LIBRARIAN IN A SCHOOL! And it is part of the campaign to normalize a situation that should not be normal, and Kenney is just going along because he really doesn’t know better, and no one is telling him.

If you’ve ever sat through a Philadelphia School Reform meeting, you know that they are not going to give Philadelphia parents a “community school” in the sense of true community participation. We are on our third Broad Academy superintendent, and community engagement generally only qualifies as “theater.” Those community partners won’t supplement, they will replace, school staff. Will anyone demand that all schools be returned to pre-cut-back staffing levels before community partnership MOUs are issued? And where is the money going to come from to bring in those services? If they use social impact bonds, the accountability metrics will skyrocket because those partners will be accountable to the venture capitalists and if the rate of return varies based on success metrics, you can imagine there will need to be lots and lots of data gathered.

Even if non-profits underwrite the cost, there will still need to be data gathered to justify grants. There could be the move to medicalize situations where students really just needed a bit of down time and an adult to talk to, because the person will need to tie that to a billable code. What safeguards are in place around that health and mental health information being collected on students by partners probably in many cases without the knowledge of the parents? Outsourcing school functions means having children end up with data driven education and data-driven lives.

It’s also clear that the push is towards workforce development. Labor wants data they can use for their projections. They have the academic data, but they need the other stuff to make it work. They need that non-cognitive behavioral piece, because we all recognize that it’s important. How are they going to get that data? Do you think parents are comfortable with the idea that partners may be monitoring Johnny’s “grit” level? Maybe they’ll want to know does Sally show proficiency in teamwork? creative problem solving? conformity? ETS is setting up measures right now. Locally, at the University of Pennsylvania, we have Duckworth’s “Character Lab” and Seligmann’s initiatives for “Authentic Happiness.” Out of School Time Partners across the country are collecting aggregated student data now. I don’t know that it includes non-cognitive proficiencies, but that could be easily added.

The other piece you need to be aware of is ELOs, also know as Extended or Expanded Learning Opportunities. The folks behind ELOs include the National Governor’s Association and the Chief Council of State School Officers who brought us Common Core State Standards. In their view, education can just be broken down into bits, and in the future kids will collect them like digital badges through demonstrations of mastery that will eventually be done primarily online. Of course most parents are not digital natives and would chafe against this vision of education as essentially cyber school. So instead, certain competencies (also I think this is where the non-cognitive ones come in) are developed with partners through “real world” “community-based” problem solving. The sales pitch will be for THIS part of the blended learning model. They will sell parents on all these great projects combined with the most innovative technology, but what most students will get is a bunch of Rocketship Academies with vans that take kids to the local hospital for an internship (and maybe the hospital gets some volunteer labor). Maybe I’m jaded, but in my heart I feel that the innovative schools they have been set up in Philadelphia cannot be scaled to serve a majority of students. I believe they are part of a bait and switch plan.

The SRC just adopted a $22.5 million contract with Infinite Campus for a new student information system. This system will enable “student-centered” education and support “innovative” school models. Many large districts across the country are doing the same thing right now. I’m pretty sure that will the infrastructure needed to support the new competency-based education model with room for ELOs and student-directed learning. In fact, if parents check School Net there is a tab for Individual Learning Plan, that seemed to be total BS, but it is in fact a precursor to CBE.

This transformation has been in the works for 15 years. In many ways, I fear the issue of high stakes testing was perhaps a straw man so they could make their profit on the tests, knowing that the plan was always to walk away from them and move into stealth testing. For all the talking points we have, CBE offers an answer. Hate having a kid’s evaluation riding on one test? OK, we’ll gather their data all the time through stealth testing. Hate standardization? We’ll offer you “personalization.” Have we driven out thousands of experienced teachers through our emphasis on testing, test prep, and data-driven instruction? Oh, we can fix that. We’ll just raise class sizes using a blended learning model where the kids are online most of the time and out in the community the rest of the time. We really don’t need so many teachers, and the ones we want around are the ones who can tolerate spending their days in front of data dashboards.

It was all so very clever, and it will be hard to tell folks the emperor has no clothes. People want to believe the community schools concept is a good one. They want that. Who wants to be against a cool community project? Right? No one wants to be the one saying, hey the logical conclusion if you put no limits on how many credits can be earned online (see Gates-funded Great Schools Partnership) and in the community leads to the eventual outcome that schools disappear entirely.

Before we move full steam ahead with Community Schools, could we take some time to seriously discuss full, fair funding of public education? We need real funding, sustainable funding, enough funding so that our schools can be safe and functional, and even joyous. If we have that, we would have staff to help families navigate community services that already exist in their neighborhoods. Hey, what an idea! But that would require reinstating jobs that come with benefits and pensions, jobs that strengthen labor’s position. My guess is that neoliberal interests are simply not going to let that happen.

I leave you with one observation. In all of these plans for “community schools” are the partners who will be providing the services and ELOs going to be big “C” community members or little “c” community members? I expect a majority will be the former, because they have the infrastructure to access the funding. Many of these initiatives seem to be linked to major players like the United Way and local universities and outposts of national non-profits and city agencies. I mean it’s not like your neighbors are actually going to be running the programs. If that is the case, why not just put the money directly back into the schools, so they can build the community there?

I’m worried about universal pre-k.

Let me repeat. I’m VERY worried about universal pre-k.

I worried when Michael Bloomberg and John Arnold supported it in Philadelphia.

I worried when I learned about social impact bonds and “pay for success” finance.

I worry few people know about these new methods of intrusive pre-k data collection:

vests holding digital recorders that count words spoken to babies;

play tables with video cameras to record and assess group play dynamics;

gamified education that tracks engagement with content;

apps to nudge proper parenting behaviors via text; and

playground equipment with QR codes for phone-based recreational learning

Today’s preschoolers will grow up in this new world order.

It is being built around them.

They’re the test cases for Global Education Futures’ dystopian 2035 agenda.

The econometricians have crunched the numbers.

The pathways are finalized.

The badge systems and learning lockers ready.

They’ve lined up early adopter states to promote the “Swiss Model.”

2/3 of students will be shunted into work-based education with “stackable credentials.”

They’ll curate a personal brand to compete in globalized digital labor markets.

A “knowledge” economy: STEM, STEAM, GRIT, RESILIENCE, OBEDIENCE

At each step, data will be vacuumed up.

Knowledge, mindset, and compliance captured digitally, indefinitely.

Predictive analytics and “risk scoring,” to evaluate human capital potential in real time.

Impact investors demand to know “what works” to net them the best rate of return.

Universal pre-k will push children into the “social impact investing” value chain.

Meanwhile, Lumina Foundation, chambers of commerce, venture philanthropists, tech, United Way, and their ilk await the legislation that will green-light this futures market.

Below is an infographic I developed to show how “re-designed” education, global digital labor markets and social impact investing intersect. This program of human systems engineering is framed as “lifelong learning.” You can also download a PDF here.

California Assemblyman Kevin McCarty, chair of the budget subcommittee on education finance, dropped a package of universal pre-k bills in December, ready for the state’s new governor. Gavin Newsom, a tech/venture philanthropy-supported candidate, has come out strongly in support of expanded early childhood education. Click here for interactive version of map below.

But outgoing Governor Jerry Brown offered words of caution in a recent interview with John Harris of Politico. Though as one California parent noted, it’s actually a case of too little, too late, since the infrastructure that will subordinate public education to workforce interests was installed on his watch. While he may have protected the teachers somewhat, children remain on the front lines.

Brown does not mention impact investing or the Heckman Equation, even though Heckman and Pritzker spent a lot of time courting community foundations in the state. The Silicon Valley Community Foundation’s “Choose Children” Campaign had done a full court press on the “early childhood education” investment vehicle “No Small Measure” that featured Robert Dugger and Heckman’s work last September. I’ll be writing a follow up on that next.

Check out the trailer and then read what Jerry Brown has to say about computers, control, measuring and ranking.

Former Governor Jerry Brown’s words of caution on Cal-PASS Pre-K to Workforce Pathways:

“Harris: What’s an example of that (totalitarianism) being pushed by the liberals?

Brown: An example would be measuring each individual child from preschool to beyond college, and keeping those as permanent records in the computer, that would measure discipline and mental attributes. Just the general centralization of information, which is being billed as the way to help the poor but which will enable an authoritarian to totally monopolize and control the society.

In fact, we have something called “Cal-PASS,” a state computer, which I kept in check. And I think now it’ll be full throttle to collect as much possible data and measure people in all sorts of ways. I think it’s dangerous. I don’t think it’s very useful, except for academics who have to write theses and do research. We had one on the teachers, which we stopped.

See, the trouble is the computer can collect a lot of information and regurgitate it in many different ways, and people are fascinated by that. Controlling and measuring everything. … We’re all ranked. And who’s it for? Now, if it’s for the academics, they’re relatively harmless. But then it’s going to ultimately be used, at some point, and it has kind of a smell of eugenics, that we want to purify this kind of motley race called human beings and if we can measure all the different attributes, we can then make normative the right path and the right way to be. I think that is the absence of diversity and the absence of freedom.

I would just say, spoken in a somewhat abstract level—it’s not just me who says that. I mean, there are political theorists who notice that the welfare state and the warfare state work hand in hand. They both want to see more power. They want more engineering of things. And, in many ways, that’s mass society, that’s an inevitable trend. But we do need to—we, the government—so that it can function is guard against that. And some of these big issues are not thought about.”

From Jerry Brown’s Midnight in America by John Harris for Politico

 

Silicon Valley Community Foundation, Part Five

Here for the introduction and parts one, two, three, and four.

Community foundations were established a century ago to aggregate assets from individuals, families and businesses and advance the activities of nonprofits operating in a particular geographic area, hence the “community” designation. The first example is generally considered to be The Cleveland Foundation, which was started in 1914. Today, some community foundations are revisiting long-held policies around local giving and transitioning to a globalized grant making program. Staff and leadership have dropped any pretense that community foundations exist to promote local wellbeing, instead fully embracing the structure as a tax shelter for the wealthy that gives them considerable influence over how social services are delivered worldwide. Community foundations are extensions of the social impact sector. Investors can more easily manufacture data-driven “impact” in the grinding poverty of the global south and among refugee populations. Perhaps that is why they are increasingly sending their philanthropic “patient” capital abroad.

As the Silicon Valley Community Foundation’s assets ballooned, donors, staff, and board members expanded the foundation’s reach far beyond the Bay Area. In a 2013 article, “Redefining Community Foundations,” former CEO Emmett Carson stated, “ To some donors, community means their own neighborhoods. To others it is the town where they grew up. Still others see themselves as global citizens. Silicon Valley Community Foundation will meet donor partners where they are and support their personal definitions of building community—locally, nationally, and around the globe.”

In 2014 the foundation created a database that allowed donors to easily direct grants to international organizations. By 2017, two-thirds of SVCF’s awards were directed outside the United States with remaining going primarily to California-based nonprofits. The foundation’s 2017 990 tax form, shows this clearly. The list of international activities begins on page 37 and continues through page 66. Referenced on page 38 is an unspecified $875 million investment made in “Central American And The Caribbean” nations. I’d love to know more.

That year SVCF’s international grants were directed to organizations pursuing projects in: education, human services, housing and transportation, youth development, workforce development, human services, environment, arts and culture, animal welfare, community development, civil participation, international development, sciences, health, general nonprofit support, food security, and religion.

Regional allocations were as follows:

$69 million: Europe, Iceland and Greenland

$12.9 million East Asia and Pacific

$4.4 million: North America (not US)

$2.9 million: Sub-Saharan Africa

$2.4 million: South Asia

$1.4 million: Middle East and North Africa

$1.2 million South America

$190,000: Russia and Neighboring States $190,000

$31,000: Central America and the Caribbean

Not all money channeled out of Silicon Valley went to such far-flung destinations. Some was simply directed across the country. An example of this is a series of grants, totaling tens of millions of dollars that flowed through SVCF to the New Jersey nonprofit Foundation for Newark’s Future starting in 2011. This money supported efforts by Mark Zuckerberg, one of the foundation’s largest donors, to turn the low-income school district into a laboratory to test “system transformation” and disruptive ed-reform policies.

Newark offered valuable R&D opportunities as Facebook refined its digital education offerings, which include Summit Learning. Most considered Zuckerberg’s foray a failure, but that would presume his goal was to actually improve learning conditions for Newark’s students. If “success” instead meant having free reign to move fast, break things, and use information gleaned to tweak business models and communication strategies, I expect the social media mogul probably considers it money well spent.

Families in Newark, NJ need to be comparing notes with Bridge International Academies’ families in Kenya and Uganda.

 

 

 

Silicon Valley Community Foundation, Part Four

Click here for the introduction and parts one, two, three, and five.

In a 2013 interview for the Mission Investors Exchange publication, “Community Foundation Field Guide to Impact Investing,” Chief Giving Officer Ellen Clement Glass stated there had been talk of exploring impact investing as early as 2006, before the Silicon Valley Community Foundation had even been officially established. There was a pause following the foundation’s post-merger transition and the financial meltdown of 2008, but after a period of recovery, SVCF began to earnestly investigate “innovative finance” in 2012.

Glass went on to say  SVCF leveraged “the relationships we had with city government, local providers, donors, and related organizations to identify the needs and participate collectively in learning how these new types of experimental financial structures function.” They undertook a collaboration with Step Up Silicon Valley, the Health Trust, and Catholic Charities that resulted in the creation of “Welcome Home,” a social impact bond that became the first county-led pay for success program in the United States.

Interactive version of the map below here.

SVCF saw itself as a local expert positioned to convene stakeholders, identify champions, build capacity among government officials and local providers, and mitigate risks that might compromise the deal. The 2013 report “From Idea to Action: Pay for Success in Santa Clara County” prepared for The Health Trust provides important background on the process and identifies key supporters, including Dave Cortese a Santa Clara County Supervisor, and Gary Graves, the county’s Chief Operating Officer who served on the Advisory Board for Third Sector Capital Partners starting in 2016.

To set the stage for the social impact bond, which was approved in 2013 then funded and implemented in 2015, the Health Trust hosted an “innovation summit.” Harvard Business School professor Clayton Christensen facilitated the event, which was held in San Jose in January 2012. Christensen has built his academic and consulting reputation on disruption, particularly of the health and education sectors. Education activists may be familiar with his promotion of blended, “personalized” learning via the Clayton Christensen Center for Disruptive Innovation, which he co-founded with protégé Michael Horn. 100 attendees at that Health Trust event were invited to apply for grants to pursue their own “disruptive innovations.” Interactive map here.

Fred Ferrer was the Health Trust’s CEO at the time and also board chair of Rocketship Education a charter chain in San Jose, known for its extensive use of e-learning and classrooms that evoke cubicle-filled call centers.

Ferrer maintains close ties with the Santa Clara County Office of Education, home to Datazone and Strong Start, where he is an adjunct lecturer as well as with Santa Clara University. He is also the founder of Manzanita Solutions, a non-profit management consultancy specializing in health care and early childhood education. The interconnectedness of healthcare and education is a constant in impact investing; both lend themselves to datafication for the purposes of impact measurement.

Three months after Christensen’s kick-off, SVCF hosted a follow up event with Catholic Charities and Step Up Silicon Valley. They brought in Steve Rothschild from Minneapolis to present on Human Capital Performance Bonds. Rothschild, former vice president of General Mills, had just published “The Non Nonprofit: For-Proft Thinking For Nonprofit Success.” The book advanced the idea of creating “economic value” by implementing social programs in ways that are market driven and tied to success metrics. Bill Drayton, elder statesman of social entrepreneurship, as well as the president of Catholic CharitiesUSA and United Way Worldwide all gave the book their stamp of approval.

As it turns out, SVCF’s first executive director also hails from the Twin Cities. Before coming to Mountain View, Emmett Carson headed the Minneapolis Foundation. The Twin Cities is where Rothschild and Art Rolnick, former research economist with the Minneapolis Federal Reserve, helped refine the concept of outcomes-based government contracting.  Rolnick, as you may remember, is a close associate of human capital economist and early childhood education investment promoter James Heckman, more on that here. Carson was a vocal advocate for expanding early childhood education programs during his time in Minnesota. Rothschild has served on the Minneapolis Foundation board. Given their common interests, it seems highly likely Carson and Rothschild’s paths had crossed before.

Interactive version of the map below here.

While in Minneapolis, Carson’s wife, Jacqueline Copeland, worked as the vice president of philanthropic services for US Bancorp. Copeland, a social entrepreneur whose LinkedIn profile touts her work on a study for the Ford Foundation that turned into Obama’s “My Brother’s Keeper” initiative, joined Catholic Charities of Santa Clara County as COO in 2014 where she worked until 2018, the year Carson left SVCF. This is notable, because both SVCF and Catholic Charities were influential partners in the development of the Welcome Home SIB.

Step Up Silicon Valley (SUSV) and Catholic Charities received $150,000 from the Health Trust’s disruption grant program for development of the pay for success model. SVCF and Santa Clara County each contributed an additional $75,000. Step Up Silicon Valley was created by Catholic Charities as a “poverty lab” to catalyze systems change in the social service sector of Silicon Valley. Its “1,000 Out of Poverty” effort became a testbed to refine elements of the program, including the “Self-Sufficiency Measure,” a “scorecard” tracking the “progress” of low-income clients in the areas of food, housing, healthcare, education and income. Such systems of consolidated data-tracking are a prerequisite for outcomes-based contracting to scale. SUSV worked with Community Technology Alliance (CTA), a non-profit set up to harness technology to create data-driven solutions to poverty. Together they customized the tool, which is based on one created in Arizona. CTA’s board members are embedded in the tech community and certainly have a financial stake in the transition of the nonprofit social sector to a data-driven, market-based model. Below is a short video describing CTA’s approach to real-time, human service data collection.

Step Up Silicon Valley drew upon the principles embedded “National Opportunity for Community Renewal Act” or NOCRA, draft legislation that had been developed with input from Catholic CharitiesUSA. That legislation was introduced in 2010 and again 2011 by Pennsylvania senator Robert Casey and Massachusetts congressman James McGovern, both Democrats. NOCRA’s lobbying efforts were national in scope with  700 delegates brought to the capital to advocate on behalf of the bill in September 2010. Still, the legislation did not pass. Nevertheless supporters continued to push the program’s recommendations. Step Up Silicon Valley was later designated one of six NOCRA Laboratory Projects that would be used to pilot “results-based,” “market-driven,” “systems-changing” solutions to poverty even without the benefit of federal legislation in place. A timeline on page 28 of the report “10 Years In The Making,” specifically states “SUSV used the NOCRA principles to launch pay for success.”

The role Catholic Charities played advancing Santa Clara County’s social impact initiatives is significant. “Welcome Home” was not simply a local pilot project, but a prototype whose success or failure had implications for a much larger investment program. The Vatican held global impact investing conferences in 2014, 2016 and 2018. You can be sure many are keeping a close eye on how Santa Clara County’s projects develop. Poverty “impact investments” in the United States can be testing grounds for similar global development aid programs and vice versa. Social Impact Bonds (SIBs), one mechanism for Pay for success implementation, has a counterpart in Development Investment Bonds (DIBs). What happens with digital education of the type Ferrer, Zuckerberg, Gates, Omidyar, et al promote in the Bay Area does carry over to ICT education deployment abroad, see Bridge International Academies and the Educate Girls DIB. They inform one another. The cloud has made the world an increasingly small place for those operating in fin-tech. Globalization is embedded into everything.

Sir Ronald Cohen, father of the Social Impact Bond concept, and Matthew Bannick, of Omidyar Network, presented at all three Vatican’s impact investing conferences. In addition to religious officials, representatives from global aid, venture capital, and private foundation groups were all in attendance. Omidyar Network, whose program areas include global impact investing, digital identity, emerging tech, finclusion and education, was a sponsor of the 2018 gathering. The conference agenda notes they even hosted a special dinner for attendees at Ristorante Arturo on the second evening. Makes you wonder if the diners had any moral twinges as they ate given the day’s discussions on deploying capital to the bottom of the economic pyramid and refugee management.

Two of the 2018 speakers, Radha Basu and James Kohler, had local ties being associated with Santa Clara University, a Jesuit school that partnered on the Step Up Silicon Valley effort. The university had representatives on SUSV’s Outcomes Leadership Council, assisted with implementing the program’s poverty simulations, led its Income Working Group, and sponsored a “Learning and Development Series.” The university also happens to be the alma mater of Fred Ferrer. Ferrer still coordinates a public health leadership program there and was awarded an honorary doctorate of public service in 2014.

Basu and Kohler both worked as corporate executives for Hewlett Packard early in their careers, went on to pursue technology-based social entrepreneurship ventures, and maintain ties with Santa Clara University. Basu founded and directs the Frugal Innovation Lab that matches engineering students with NGOs seeking technology solutions. She and her husband also created several businesses to train low-income people in India as IT call center and AI data analysis workers. Kohler heads the Miller Center for Social Entrepreneurship and spent 25 years managing RedLeaf Venture Capital in the Bay Area.

Kohler also serves on the Catholic Relief Services (CRS) Advisory Committee on Impact Investing which aims to test and evaluate various proofs of concept for impact investing. He is co-chair of its education working group, which is charged with creating a “Learning Institute” to teach people, in Catholic charity groups but also others,  about impact investing and to identify financial advisors who can help with investments. Clearly CRS is developing capacity to scale the model. Its 2017 financial statement indicates CRS held $174 million in investment assets, though it remains unclear how much of it might be directed into impact investment programs.

I hope to do further research into the intersection of the tech sector and Catholic charity. What is happening in Santa Clara County is not a one-off. Last April, Total Impact in partnership with ImpactPHL (additional information here) brought 300 social entrepreneurs to the Cira Center to discuss “good capital.”

Total Impact Philadelphia from Good Capital Project on Vimeo.

Many of the key players who participated in the Social Impact Partnerships Pay for Success Act celebration (described here) were in the room, including Jim Sorenson and Andrea Phillips. One of the keynote speakers was Sister Mary Scullion of Project Home, a prominent Catholic advocate for homeless services in Philadelphia.

In the spring of 2017 Project Home received a portion of a $1.1 million award from the Nonprofit Finance Fund (NFF) to provide housing for those needing substance use and mental health treatment under a Pay for Success arrangement. In a press release, NFF CEO Anthony Bugg-Levine was quoted “Pay for Success is an early proving ground in the movement toward outcomes-based approaches to social services, where payment is based on results achieved instead of services delivered.”

It is imperative that we recognize such a model is designed to function in tandem with technological surveillance systems coming out of Silicon Valley. Phones, tablets, sensors, biometric wearables will be foisted on the global poor, whether they be refugees or single moms living out of cars. This digital divide must be crossed in order to gather “proof” of “what works” and justify predatory profit-taking by the Vatican, Omidyar, Gates, and all the rest. The price the poor will be forced to pay is their personal agency, autonomy, and basic humanity. If we were decent people, we would not require digital identity systems in order to provide shelter and care. It is because we are allowing systems of care to be transformed into investment markets that Internet of Things trackers and data dashboards of “self-sufficiency measures” are required.

Clearly there is tremendous money pushing Rothschild’s “non-nonprofit” model that will track the poor as they are “managed” by initiatives that ultimately serve the data overlords.  As I said previously, “To Serve Man” is not a good intention, but rather a venture capital cookbook for profitable poverty management.

 

Silicon Valley Community Foundation, Part Three

Here for introduction and parts one, two, four, and five.

Last year, the 800+ community foundations in the United States held a combined total of over $91 billion in assets and awarded $8.3 billion in grants. As non-profits are incorporated into the “evidence-based” impact agenda, it is important to keep in mind $8 billion+ buys a lot of influence. All you need to do is spend a few hours scanning the grant lists included in the 990 tax forms of Silicon Valley Community Foundation (SVCF) or the Tides Foundation. It doesn’t take much, often less than $50,000 in unrestricted giving to bring an organization into the fold.

Most non-profits are desperately seeking general operating funds to carry out their “good work.” When they get it, they’re unlikely to turn it down, even if it comes with problematic strings attached…even when those strings involve intrusive data collection and reporting requirements that may ultimately harm clients (students)…even when the strings restrict the methods by which services can be delivered.

The influence of community foundations like SVCF is not limited to grants however. Even more important are decisions made about where they invest endowment and donor advised funds. Foundations execute PRIs (program related investments) and MRIs (mission related investments). PRIs are “below market rate” investments made in non-profits, start-ups, or publicly traded companies that advance an organization’s charitable purpose and are not intended to produce significant income or capital appreciation. According to a 2011 brief prepared by Mission Investors Exchange, a foundation can make PRIs in for-profit, non-charitable, non-exempt organizations if the purpose of the investment is deemed to be charitable.

PRIs, like non-recoverable grants, can be counted towards the IRS’s 5% annual distribution, though no distribution is required of community foundations. While the regulatory framework for PRIs dates to the 1969 US Tax Reform Act, foundations have only recently begun to deploy this investment strategy in a serious way. Not surprisingly, the Gates Foundation is a leader in this area. Starting at $400 million in 2009, the foundation’s PRI allocation has grown to $1.5 billion. According to Paul Brest’s 2016 article “Investing for Impact with Program Related Investments,” Gates’ focus is global poverty with investments made primarily in biotech and mobile payment systems; though surely ed-tech investments can’t be far behind.

MRIs differ from PRIs in that they prioritize financial return, but still take social benefit into account. Unlike PRIs, MRIs cannot be counted towards the 5% IRS distribution. In 2015, the IRS clarified its guidelines stating trustees of foundations could pursue MRIs offering below market rate returns as long as the charitable purpose of the foundation was not jeopardized. This clarification gave foundations a green light to expand MRI activities in social impact investment markets. In May 2017, the Ford Foundation announced their intention to put $1 billion of their $12 billion endowment into MRIs. Side note: the Ford Foundation is an institutional supporter of the Kairos Center, which houses the “Poor People’s Campaign.” Larry Cox, who served as senior program officer for human rights at the Ford Foundation between 1995 and 2005, coordinates that campaign.

SVCF pitches impact portfolios as an option for its donors. The foundation offers a range of services from placing assets in the “social impact pool” to “customized philanthropy.”

Source here.

Among the “customized philanthropy services” offered is guidance on PRI and MRI investments in Donor Advised Funds (DAFs). In 2017, MIT’s Sloan School of Business issued a brief, “Donor Advised Funds: an underutilized philanthropic vehicle to support science and engineering.” The document makes a case for expanding use of DAFs as a form “patient capital” to sustain the development of “tough technologies” that are innovative, but not yet attractive for venture capital investment. The idea is to use DAF funds to “de-risk” cutting edge technologies in the bio-tech, energy, and education sectors, enabling them to survive the “valley of death.” The infographic below, from page 12 of the report, suggests four ways funds can be moved from DAFs into “for-profit charitable organizations.”

Donor advised funds (DAFs) make up significant holdings in most community foundations. DAFs enjoy privileges not available to private foundations. While donors get an immediate tax benefit when making gifts of appreciated assets, they are under no obligation to make charitable payouts from the fund. In contrast, private foundations must disburse 5% of their endowment annually in order to comply with IRS regulations. DAFs also provide anonymity since awards come from the sponsoring organization without referencing a specific donor.

The map below shows billionaires holding donor advised funds at SVCF; five of them have ties to Facebook. In 2015, more than a quarter of the foundation’s assets were comprised of one corporate stock, presumably Facebook. Mark Zuckerberg directed 18 million shares, valued at over a billion dollars, to SVCF in 2013 and gave an additional $214 million in Facebook stock in November 2018 after Nicole Taylor was announced as the organization’s new CEO.

Reed Hastings, of Netflix, a Facebook board member and long time supporter of and investor in digital learning, established a $100 million fund with the foundation 2016. In a 2014 keynote to the California Charter Schools Association Hastings drew criticism saying he’d like to make elected school boards obsolete, favoring instead the “more stable governance” provided by charter school companies. Hastings also serves on the board of KIPP charter schools, an SVCF beneficiary. According to SVCF’s 2016 990 tax form, KIPP received $2.5 million for its national operations and an additional $12 million directed specifically to KIPP schools in the Bay Area.

Billionaires with DAFs at SVCF here.

With this in mind, consider how education, and the social sector more broadly, is being set up for hostile takeover via impact investments underwritten by PRIs and MRIs. We have achievement gaps to be closed and “opportunity youth” pushed out of educational systems waiting to be connected to workforce pathways. We have deep trauma and a profound a lack of equity in resource allocation. You can be sure SVCF’s donors are readying their data-driven “solutions.”

Will PRIs, MRIs, and DAFs be tapped to pay legions of coders to create the dashboards, digital identities, and next-gen surveillance systems that will be forced into education and therapeutic settings in the name of “charity?” Perhaps the coders themselves will be incorporated into the “impact” value chain as is already happening with incarcerated people roped into “The Last Mile” computer training intervention at San Quentin.

The need for these technological “fixes” stems from purposeful decisions made by those in power to break and starve public infrastructure, to destroy the commons. Support systems that should be accountable to the people are being replaced by outsourced “solutions” that will be accountable only to investors. Community foundations have been tapped to sustain the development of predatory technologies that will control this new structure. Even though these technologies are not yet economically viable, philanthropic injections of capital will keep them on life support until sufficiently stable markets have been created. All that is required is for-profit initiatives be designated as having “charitable” intent; not a difficult task in  a world where the rich and powerful are more than willing to define data-mining the poor and vulnerable as “charity.”

Silicon Valley Community Foundation, Part Two

 Here for the introduction and parts one, three, four, and five.

Not only is the Silicon Valley Community Foundation (SVCF) among the largest foundations in the country, it is also situated in the belly of the beast. The Bay Area is where vast amounts of venture capital have combined with public and privately funded research to propel advances in Artificial Intelligence (AI), machine learning, robotics, Internet of Things (IoT), bioinformatics, digital identity, Blockchain, and advanced manufacturing that are catalyzing the Fourth Industrial Revolution. The funds held by SVCF derive from these industries. It is a symbiotic relationship; the fate of the foundation is inextricably linked with the economic fate of the donors that feed it.

We are crossing the threshold to an era where data-driven finance of social programs will be enmeshed with ubiquitous computing made possible by IoT sensors and ICT (information and communications technology) devices. Sensors will feed data to digital identity and payment systems that reside on smart phones, tracking how a person accesses services and generating predictive profiles of users. Being poor will increasingly mean constant digital surveillance, a person’s “risk” calibrated in real time to ascertain “impact” and establish returns on social impact investments.

Given how rapidly these developments are unfolding, it is imperative we stop to consider how power concentrated in ostensibly charitable, but unaccountable, institutions like SVCF is being deployed in ways that reinforce structural racism and oppression of vulnerable communities. We must recognize that no true solution to poverty will come from the top of the economic pyramid; the power imbalance is simply too great. The impact-investing machine, the brainchild of billionaires, will never prioritize the needs of the global poor. It’s like the Twilight Zone episode where aliens (venture capitalists) ask humans to trust them, and as the unsuspecting victims (global poor) board the spaceship, a translator runs up shouting “wait, To Serve Man is actually a cookbook!”

In spite of the strategic branding, we must recognize that social impact investing isn’t a charitable endeavor. The intent isn’t “to serve man,” at least not the poor man. What is being sold as the solution to economic inequality is a cookbook; a technologically-mediated, poverty-management cookbook put together by oligarchs to disempower the poor and turn their lives into data for the purpose of legalized gambling.

No investment market is designed to eliminate the source of its profit. Logic dictates data-driven, market based “social solutions” can never put an end to poverty. Rather, investors will manage services in ways that maximize returns while reducing the likelihood those trapped within the system will become sufficiently organized to overthrow it. Knowing that, I’d love to hear ideas about next steps. Not sure how long we have before the spaceship is set to launch, but the clock is definitely ticking.

Silicon Valley Community Foundation, Part One

Here for the introduction and parts two, three, four and five.

Feature image is from this New York Times article.

The Silicon Valley Community Foundation (SVCF) has been a key player in outcomes-based contracting test cases emerging in the Bay Area over the past five years (here for more information). It is the largest community foundation in the United States with assets currently topping $13.5 billion, much of it derived from donations of stock made by tech, finance and real estate executives. The size of SVCF’s endowment has skyrocketed, up 65% since 2016, which some speculate is due to appreciation of crypto-assets held in donor advised funds. Its size far exceeds that of its closest peer; the Tulsa Community Foundation, ranked second, holds a mere $4.4 billion in assets.

SVCF’s board is heavily weighted with representatives from venture capital and finance, augmented by individuals from tech and manufacturing and a few others representing community and government interests. Among the latter is Greta Hansen. Hansen, Chief Assistant County Counsel for Santa Clara County, had direct involvement with the county’s pay for success initiatives and joined the board in early 2018.

Interactive SVCF board map here.

The Silicon Valley Community Foundation was created in 2007 through the merger of the Peninsula Community Foundation and the Community Foundation of Silicon Valley. McKinsey & Company handled the merger, an effort that was financially supported by the William and Flora Hewlett , Skoll, James Irvine, and David and Lucille Packard Foundations and the Omidyar Network. I wrote about the William and Flora Hewlett Foundation’s efforts to remake philanthropy as a data-driven, technology-centered enterprise here. Omidyar Network has been working at the intersection of emerging tech, impact investing and digital identity. Most recently the organization backed a prototype “impact security,” the Last Mile, which is being piloted at San Quentin Prison in the Bay Area.

In her report, “Tying the Knot: The Founding of the Silicon Valley Community Foundation,” Janet Rae-Dupree characterized the merger as process fraught with tension that saw considerable pushback from board, staff, and community members at various times. The two organizations had very different cultures that were hard to reconcile. Peninsula’s assets of $612 million were primarily unrestricted funds from estates managed by staff, while the Community Foundation of Silicon Valley’s $919 million in assets were mostly restricted corporate or donor advised funds managed with an entrepreneurial outlook. The latter came to dominate.

Tension continued after the merger. A controversy that has drawn considerable attention over the past year centered on Mari Ellen Loijens, SVCF’s former Chief Business, Development and Brand Officer, who originally came over from the Community Foundation of Silicon Valley. Loijens, recognized for her skill with donors and hostility towards staff, was identified as the source of an extremely toxic workplace culture at SVCF. High levels of turnover and complaints of berating and bullying behavior as well as inappropriate racial and sexual remarks, documented in an investigative report by BSF consultants, led to her resignation followed by that of CEO Emmett Carson in June 2018.

Origins of the Silicon Valley Community Foundation map here.

Over the past decade, SVCF has been a conduit for hundreds of millions of dollars used to advance the privatization of public education in the Bay Area and beyond through the expansion of charter schools and device-based education. Such arrangements boost the bottom line of many of SVCF’s donors whose profits derive from online learning products embraced by operators of charters and alternative education providers.

The maps below show how some SVCF’s funds flow through two intermediary organizations, the New Schools Venture Fund and the Charter Growth Fund.

SVCF grants to the New Schools Venture Fund here.

SVCF grants to Charter Growth Fund here.

According to a 2017 audit, SVCF awarded $1.8 billion in grants last year. The most current 990 tax form online is for 2016, available here. It lists hundreds and hundreds of grants, from which I have pulled a sample that reflects the foundation’s involvement in ed reform and impact investing:

Selected SVCF grants from 2016:

$68 million: New Schools Venture Fund (re-imagining education for entrepreneurs)

$26 million: Charter School Growth Fund (promotes expansion of charter schools)

$24 million: Goldman Sachs Philanthropy Fund (donor advised fund)

$24 million: Startup Education (predecessor to Chan Zuckerberg Initiative)

$20 million: Summit Public Schools (blended learning model funded by Facebook)

$10 million: Rockefeller Philanthropy Advisors (philanthropy consulting)

$9 million: StudentsFirst (school choice organization founded by Michelle Rhee)

$9 million: The Primary School (Priscilla Chan’s lab school for low income families)

$7.1 million: California Charter Schools Association (charter advocacy group)

$5 million: Pacific Charter School Development (charter facility real estate)

$4 million: Education Superhighway (classroom broadband)

$3.4 million: Teach for All (global network of TFA)

$2.3 million: Pahara Institute (leadership training advancing education redesign)

$2.2 million: Aspire Public Schools (California charter school chain)

$2 million: Teach for America (alternative teaching program)

$1.6 million: Innovate Public Schools (San Jose, CA based charter chain)

$1.6 million: Acumen Fund (patient capital for global poverty “impact”)

$1.4 million: Common Sense Media (gatekeeper for quality online content)

$1.3 million: Relay Graduate School (alternative teacher certification)

$1 million: Tipping Point Community (Robin Hood Foundation inspired poverty reduction program in the Bay Area)

$1 million: Power My Learning (mastery-based online playlist education)

$740,000: WestEd (San Francisco based education research group)

$600,000: Stand for Children (ed reform lobbying group)

$500,000: National Council on Teacher Quality

$500,000: Chiefs for Change (lobbying group pushing education transformation)

$500,000: Big Picture Learning (competency education based school model)

$151,000 Parent Revolution (promoter of school choice and charter schools)

This is in addition to donations made to twenty-five chapters of the United Way and United Way Worldwide.

Increasingly people are acknowledging the toxic nature of SVCF’s activities. Donations, such as those listed above, are strategically deployed to influence public policy and advance the interests of the foundation’s corporate donors. Pouring millions into tech-centric charter schools while starving neighborhood schools of funding destabilizes vulnerable communities. It isn’t charitable. A May 2018 article from The Atlantic described SVCF as “The ‘Black Hole’ That Sucks Up Silicon Valley’s Money.” Local organizations that once enjoyed direct access to donors are seeing contributions dry up, and since the fees foundations charge increase as assets under management grow, there is a real disincentive for entities SVCF to fully disburse funds back into the community. They aren’t required to do so by the IRS. There is a lot money flowing, but little gets to the people who most need it, and certainly none of it is provided on terms that truly serve the interests of the poor.