Silicon Valley: A Laboratory of “Smart” Surveillance and Privatization

The scope of my research has expanded greatly since I began this journey five years ago. My starting point was standardized testing. At the time I was under the naive impression that withholding student test scores could in and of itself  forestall the closure or “turnaround” of neighborhood schools in Philadelphia. During the spring and summer of 2015, I realized “end of year testing” was merely a warm up for “all-the-time” online testing ushered in by ESSA. Valuable relationships came out of that movement; still, it was a blow. It took me half a year to regroup. I continued digging and slowly came to understand the vast reach of technology-enabled predatory social impact investing, grounded in Dr. Tim Scott’s foundational research, here, here and here.

The machine bearing down on us will use online interventions to manipulate student data in ways that redirect public funds into private hands under the guise of “evidence-based” “impact.” These systems are being deployed not only in charters, where they are field tested, but in neighborhood schools where blended “personalized learning” has taken hold. The incubation of Zuckerberg’s Summit Basecamp within Summit charter schools is but one example. Privatizers no longer need to close schools and replace them with charters to turn a profit. It is efficient, and often less rancorous, to negotiate agreements with outside management organizations that ostensibly keep schools “public” while setting children up for expanded data extraction. Once agreements are signed, administrators have free reign to impose data-driven initiatives that claim to “close gaps.” Flush districts (are there any left?) or those caught in the web of deep-pocketed donors may open “innovation” model schools to carry out this agenda. Technology-based instruction, whether implemented via laptops, tablets or Internet of Things tracking, sustains global markets in hardware, software, broadband and cloud computing, as well as “impact” investment markets linked to educational outcomes – DATA. The speculative nature of this enterprise centers “risk” analysis and profiling of students. It is incredibly dangerous.

By following the money, lots of it, I came to see how this system of converting human life to data for profit would not be limited to education, but extended into other social services: health care, counseling, workforce development, supportive housing, addiction treatment, prison re-entry. The goal is exhaustive data profiles collected on all children from pre-k through college, even extending to long range employment and health outcomes if they are able to successfully legislate it. Through continued austerity and reliance on outsourced services, including highly-anticipated “wrap around services,” education is systematically being woven into the nonprofit industrial complex, or as Sir Ronald Cohen father of British venture capital calls it, “The Social Sector.” Wherever the tech / telecommunication / impact investment sectors can take human services and put them online to leverage data-mining for profit, they will. Faux “tele-services” and apps are being pushed onto families and into schools using deceptive “community school” branding. These interventions, meta-data tagged bait and switches callously proffered in response to deep trauma and life and death need, will be weaponized against children and families, pushing the lives of the most vulnerable onto data dashboards for review by financiers.

Gambling on the life outcomes of those accessing public education and other services is a challenging endeavor requiring deft coordination of many moving parts. Those setting up these predatory public-private investment schemes must:

• establish easily measurable sectors for for “impact” interventions
• set agreed-upon terms of success
• develop technology that can cheaply and efficiently capture impact data
• fund research to establish credibility
• convince elected officials that outcomes-based contracts are a bipartisan “win”
• align government procurement systems to the new model
• maximize data interoperability across sectors
• coordinate public private partnerships with venture capitalists
• compel administrators (and their staff) and clients (including students) to comply

Despite the billions of dollars pouring into these ventures, financiers haven’t yet figured out how to bring it to scale, which is good news. There is still time to derail it, but we must get people to understand the danger to organize effectively. A lot of the most nefarious aspects of this plan are cloaked in progressive language, which makes it difficult to deconstruct, especially in such hyper-partisan times as we now face.

Global monopoly capital believed Social Impact Bond finance would be their tool to launch a new era of biocapitalism. Happily, SIBs have proven too cumbersome, which bought time. SIBs have now largely been supplanted by generic pay for success initiatives, which offer more flexibility in how deals can be structured. This past summer the branding was further tweaked as both sides of the aisle celebrated the Social Impact Partnership Pay for Results Act (SIPPRA). That language hit a lot of targets: social impact, partnerships, and results. Win, win, win! If you were to buy their fraudulent sales pitch, such P3 arrangements will bring “equity while minimizing public expense; it is already embedded in “what works” “moneyball for government” programs nationwide. So how to upend this evil construct, steeped in surveillance? Venture philanthropists always seem to be twenty steps ahead, establishing the narrative and determining the talking points. I’m committed to using this blog to disrupt as much as possible and hope you’ll digest the material and share it with others. At the end of a trying year, I’ll admit to being tired and discouraged. 

Fin-tech continues to tinker with the formula. The stakes are high as the bottom of the economic pyramid balloons. The oligarchs must figure out a way to extract profit from people with little money, and quickly. For capital to circulate on terms that further concentrate wealth in the hands of global investors, full-scale privatization of the social sector, including education, must advance rapidly.  And what better place to refine the mechanics than the Bay Area? As a playground for tech bros who who love nothing more than to move fast and break things where there is ready access to the Stanford Business School network and billions in untapped assets at the Silicon Valley Community Foundation, it should come as no surprise that the environs of San Francisco have seen a lot of technology-enabled, social impact, financial tinkering over the past five years.

In fact, a new social impact product was trialled this year at San Quentin prison. It is called an “impact security,” and the idea is that venture philanthropy will agree to pay back private investors when outcomes-based contracts hit their data targets. What is significant is that this iteration of “profiling for profit” doesn’t require ANY government participation. A non-profit can issue debt to provide a social service (market created courtesy of austerity budgeting), and that debt can be purchased directly by investors. It’s a P3 initiative where there is NO public oversight. The government is left out of the equation altogether. The concept was developed by NPX, and the test case called “The Last Mile” is funded by Omidyar Network, a major player in global impact investing. The terms of “success” involve hitting a set number of hours of prison labor logged by incarcerated people. In this case the labor is computer coding, which begs the question are we expected look the other way when state-sanctioned oppression involves STEM training?

The relationship map below depicts projects underway in the Silicon Valley.

Interactive version here.

Four of these are social impact initiatives: straight up impact investments (The Big Lift and Strong Start), a social impact bond (Welcome Home), and a pay for success program (Partners in Wellness). There is a test case for the collection of impact data around executive function, a known area of interest for impact investors. And a prototype interoperable data warehouse (Datazone), as well as a youth badging pilot program being deployed in San Jose. San Jose is of particular interest, because there are many parallels to Philadelphia. San Jose and Philadelphia are both Smart Cities seeing a lot of “what works” initiatives, “innovative” partnerships linking city government, technology interests and venture philanthropy. If you’re curious, see the links below:

Similarities between San Jose and Philadelphia.

Smart Cities: Philadelphia / San Jose

Comcast machineQ IoT Pilots: Philadelphia / San Jose

Knight Foundation IoT Grants: Philadelphia / San Jose

FUSE Corps Fellow Programs: Philadelphia / San Jose

Living Cities Members: Philadelphia / San Jose

Cities of LRNG (learning ecosystems): Philadelphia / San Jose

Digital Badge Pilots: Philadelphia / San Jose

Ideas42 Research Sites: Philadelphia / San Jose

Pre-K Initiatives: Philadelphia / San Jose

Charter School Lobbyists: Philadelphia / San Jose

Third Sector Capital Partners has had a role in all four Silicon Valley impact investing initiatives. George Overholser, formerly of Capital One and the NonProfit Finance Fund, founded the organization with Caroline Whistler, who had also worked for the NonProfit Finance Fund and before that at Ashoka. Third Sector has offices in Boston, San Francisco and Washington, DC. They were among those tapped to accelerate the growth of the nascent pay for success market in October 2014. That year Congress significantly increased the budget of the Social Innovation Fund, a program of the Corporation for National and Community Service. Third Sector received $1.9 million to provide technical assistance to spur development in the field. In the case study prepared for the ROCA SIB, George Overholser stated the mission of Third Sector Capital Partners is to “accelerate America’s transition to a performance-driven social sector.”

Timeline with milestone PFS projects for reference:

2012: New York City Riker’s Island SIB (incarcerated youth)

2012: Santa Clara, CA, Strong Start Pre-K Launched (impact investment)

2013: Salt Lake City, UT, Pre-K SIB

2013: San Mateo, CA, Big Lift (Early Literacy), (impact investment)

2013: Silicon Valley Regional Data Trust Grant (NSF)

2014: Commonwealth of MA, ROCA SIB (“at risk” youth)

2014: Chicago, IL, Pre-K/Early Literacy SIB

2014: Datazone Under Development (SCCOE Update)

2015: SVRDT Partners with Datazone, MOU

2015: Santa Clara County, CA, “Welcome Home” SIB

2015: San Jose Smart City Pilot, Press Release

2016: South Carolina, Nurse Family Partnership Home Visit PFS (Pay for Success)

2016: San Jose City of LRNG Launched

2016: Neuroscape Research Initiated in Select San Jose Schools, Gazzaley Lab Overview

2016: Santa Clara County, CA “Partners in Wellness” PFS (mental health)

2017: San Jose, Youth Badging Pilot, Video

Below are brief descriptions and relationship maps for these projects. I intend to go into greater detail on aspects of some of the maps later in the series.

Strong Start

Organized efforts promoting early childhood education began in 2010 with the creation of an early learning master plan targeting children ages 0 to 8 and their families in Santa Clara County, CA. A large coalition of corporate, philanthropic, governmental and nonprofit interests was brought together to advocate for expanded pre-k after Race to the Top funding was obtained by First Five Santa Clara in 2012. In 2016, the county received a US Department of Education pay for success grant to hire Third Sector to consult on the use of outcomes-based contracting as a means of increasing access. Sunnyvale School District was the test case. The process identified screening and assessment tools to advance this financial model. Datazone, which is under the purview of Marcy Lauck, Director of Data Governance for the Santa Clara County Office of Education, was part of this grant. SRI International and the Urban Institute advised on the project. The following year the Strong Start Coalition finalized an updated early childhood education plan with input from these working groups: Access; Articulation, Alignment and Data Systems; Facilities; Family Engagement; Planning; Program Quality; and Workforce Development.

Interactive map here.

The Big Lift

The goal of this program, backed by a coalition of over 200 partners, is to implement the Annie E. Casey Third Grade Reading Campaign framework to improve kindergarten “readiness” and third grade reading and math proficiency among low income students in San Mateo County, CA. Big Lift got its start in 2013 and moved to proof of concept stage in 2015. The plan is to expand the the program to 8,600 children by 2020 at an estimated annual cost of $30-40 million. It builds upon a county-wide “preschool for all” program piloted between 2005 and 2009. Major funding came from the CA preschool block grant program, the Silicon Valley Community Foundation, San Mateo County, and First Five San Mateo. Third Sector did not play a major role in this initiative, though they are listed as a partner.

Interactive list of funders here.

Interactive list of select program partners here.

Silicon Valley Regional Data Trust: Datazone

To maximize social impact profit, it is crucial that data across social sectors be compiled in one place. Ultimately, deal evaluators want to know everything about how a given intervention “impacted” a person’s life. Aggregating information that might otherwise be siloed compounds financial gains for investors. For that reason Datazone is the most significant project in this post. The origins of Datazone, and its companion effort the Silicon Valley Regional Data Trust (SVRDT), date back to 2001 when Marcy Lauck, current Director of Data Governance for the Santa Clara County Office of Education, was working as a consultant with Education for the Future, a research institute based at UC Chico. Her major accomplishment was to create a K12 data warehouse for the San Jose Unified School District. Lauck went on to join the National Laboratory for Education Transformation (NLET) where she and colleagues, many affiliated with UC Santa Cruz, secured an NSF grant in 2013 to develop a multi-county database linking health and human service data (child welfare, juvenile probation, and behavioral health) to education data. That effort evolved into the Silicon Valley Regional Data Trust.

Parallel with that work, the Santa Clara County Office of Education (SCCOE) launched a data initiative with Hoonuit. In 2015, the county signed a memorandum of understanding linking SVRDT with Datazone. The following year Lauck left NLET and joined SCCOE to become Director of Data Governance, overseeing Datazone, and point person for data on the Strong Start initiative. In 2017 with major support from the Chan Zuckerberg Initiative, SVRDT was officially launched. The program was a founding partner of the National Interoperability Collaborative (NIC), and Lauck has since made appearances around the country promoting Datazone/SVRDT as a national model for data interoperability with support from NIC’s initiators Stewards of Change and AcademyHealth. According to a feature article about the effort on the Hoonuit website, the warehouse holds data on 250,000+ students in 30 districts with over 90 dashboards and 350 “actionable” metrics.

Interactive map here.

Welcome Home

The number of unhoused people in the United States generally, and the Bay Area in particular, is growing exponentially. Gentrification, displacement, lack of affordable housing and housing insecurity brought about by health circumstances or unlivable wages for gig economy work leave many in dire need of shelter. But if housing, particularly supportive housing, becomes a social impact market, people needing shelter will be integrated into a massive data collection system. Being out of the elements will not be seen a human right. Rather, the data of unhhoused people will become raw material to expand the impact investment machine. The Welcome Home social impact bond was launched by Santa Clara County in 2015 in consultation with Third Sector Capital Partners. The program, which offers “evidence-based” housing-first services was jump-started with a “disruptive innovation” grant from The Health Trust, whose former CEO Fred Ferrer does outcomes-based consulting and serves on the board of Rocketship Academy Charter Schools, to Step Up Silicon Valley, a program of Catholic Charities of Santa Clara. The deal evaluator for the project is Palantir, a company that offers its software pro bono under a “Philanthropy Engineering,” arrangement. The trade-off? Well, they’re taking “free” services from a company that does a lot of business with the Department Homeland Security and sells predictive policing software.

Interactive map here.

Interactive map of funders here.

San Jose Smart City Program

City of LRNG Digital Badging

As I noted previously, Philadelphia and San Jose have a lot in common in that both are Smart Cities and Cities of LRNG, a program of Collective Shift funded through the MacArthur Foundation that promotes early stage learning ecosystems following “the city as your classroom” concept where students demonstrate competencies and earn digital credentials aligned to workforce pathways through digitally-mediated “playlist” experiences. San Jose appears to be advancing more rapidly than Philadelphia with the rollout of 5g and facial recognition cameras. In San Jose, FUSE Corps has deployed numerous individuals within the city government to promote adoption of “innovative,” technology-friendly policies. I don’t have the space here to go into detail, but hope to explore this in a future post. This map includes key elements of the smart city program, work histories of individuals associated with San Jose’s implementation, and FUSE Corps fellows. For additional information on LRNG and badge programs as they relate to out of school time learning and impact investing see posts here, here, here, here, and here.

Interactive map here.

EdNeuro Research Project

The National Science Foundation awarded Dr. Adam Gazzaley of Neuroscape, a research institute based out of UCSF, $750,000 in 2015 to assess how precision video games could be used to map and engineer the executive function of students. In 2016, Melina Uncapher, a research scientist affiliated with Neuroscape and Stanford, introduced a “mobile cognitive health assessment battery,” acronym ACE (Adaptive Cognitive Evaluation), to select classrooms in Santa Clara County schools. I wrote a longer post about Uncapher and learning engineering here. The tool Neuroscape used was developed in partnership with mobile gaming company Zynga, Facebook’s app developer. In addition to running Neuroscape, Gazzaley is co-founder of Jazz Ventures, a venture capital firm that invests in technologies to enhance human performance, and Akili Interactive, a Boston-based company that develops digital therapies. In 2017, Akili successfully completed clinical trials for a pediatric prescription ADHD video game treatment, AKL-TO1. Numerous global pharmaceutical companies have invested in the company, whose website proclaims “It’s time to play your medicine.” Akili also has digital treatments in development for depression and MS.

Interactive map here.

Partners in Wellness

This is the first pay for success project in the nation with a focus on mental health. Third Sector consulted on it after working on the Welcome Home social impact bond. The goal for the program is to reduce inpatient treatment for 250 Santa Clara County residents diagnosed with severe mental illness. As with Welcome Home, Palantir is providing the software. However the deal evaluator in this case is Dr. Keith Humphreys, professor of psychiatry affiliated with Stanford Medical School. Funding was provided through the Social Innovation Fund and the Nonprofit Finance Fund, the organization Overholser founded.  Paul Brest, professor of social impact at the Stanford Graduate School of Business and co-director of the Stanford Center on Philanthropy and Civil Society, wrote a case study about it in 2016. Brest served as president of the William and Flora Hewlett Foundation between 2000 and 2012 during which time the foundation provided seed funding that helped to launch Third Sector.

Interactive map here.

After reviewing these maps it should be clear that social impact investors plan to exert control over every aspect of the lives of society’s most vulnerable, including students in our public schools, for private gain. There is a sickening presumption that those with power and financial resources should be entitled to engineer the lives of others. In future posts I plan to lay out the details of how pay for success arrived in Silicon Valley, discuss the Silicon Valley Community Foundation’s role in the PFS landscape, and explore conflicts of interest embedded in the relationship maps above. Stay tuned!