Is Universal Pre-K Legislation A Set Up For “Lifelong Learning?”

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.

gef poster

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.

Human Value Chain Infographic

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.

lifelong learning biocapitalism-2

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.

kevin mccarty ece ca

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.

choose children tour

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

 

When “Community Foundations” Go Global (Or Coastal)

Silicon Valley Community Foundation, Part Five

Here for the introduction and parts onetwo, 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.

SVCF Investment South America 2017.jpg

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.

 

 

 

Charter, Public Health, and Catholic Charity Interests Help Launch “Disruptive” Pay for Success Program

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.

Welcome Home

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.

origins of santa clara pay for success

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.

rocketship academy

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.

Emmett Carson SVCF

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.

Omidyar Vatican

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.

radhabasu

Kohler Santa Clara Vatican

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.

John Kohler CRS Impact Committee.jpg

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.

scullion project home

Scullion total impact

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.

austin blockchain identity

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.

 

Philanthropy’s lesser known weapons: PRIs, MRIs and DAFs

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.”

SVCF Finance Options

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.”

DAF MIT

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.

SVCF Donor Advised Funds 2

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.”

To Serve Man: It’s A Cookbook!

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’s Social Impact Deal Maker

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.

SVCF Board

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.

HP SVCF Grant

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.

SVCF Origins 2

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 New Schools Venture Fund

SVCF grants to Charter Growth Fund here.

SVCF Charter Schools Growth Fund

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.

Toxic Philanthropy Part Three: The Silicon Valley Community Foundation

I spent quite a few hours over winter break exploring various aspects of the Silicon Valley Community Foundation’s (SVCF) operations and have prepared a series of posts documenting what I have found thus far. This series is intended to provide context for my previous research on Pay for Success pilot programs being rolled out in Santa Clara County, CA, the heart of Silicon Valley (more here). SVCF has played a role in many of these efforts and is a prominent institution in philanthropy whose influence is felt not just in that region, but globally.

It is an overwhelming amount of material, and I struggled with how best to organize it. I have five posts prepared now and expect it may end up double that.  This is the third chunk of research I have done on what I am calling the “toxic philanthropy” of Silicon Valley. My first post was on Salesforce and Amazon (here) followed by another on the William and Flora Hewlett Foundation’s efforts to re-engineer philanthropy as a data-driven, tech-mediated enterprise (here).

Before I jump into the thick of it, I wanted to present an overview of ten things to keep in mind as you make your way through this series:

Pay for success impact investing is in the midst of a period of experimentation as venture capital interests attempt to identify the most efficient financial structure they can use to scale this new market sector.

Pay for success runs on massive amounts of personal data. That is the “impact” tracked in outcomes-based contracts. Attempts will be made to convince people that their data is “private.” Even so, it will be used to profile them and make predictions about future behaviors that inform if and how they are able to access services, including education.

The Bay Area is the logical place for such a system to be refined, because it sits at the juncture of venture capital and emerging technologies. It is the entrepreneurs of Silicon Valley who are developing the digital systems that will track people and monitor payments related to social service access and finance. Reducing social care to data that must be tracked on a dashboard is fundamentally dehumanizing for all involved-those receiving services and those providing them.

SVCF is far and away the largest community foundation in the United States and is one of the largest foundations in the country. Its assets have grown enormously in recent years as tech billionaires have funneled donations of appreciated stock and crypto-currency into donor-advised funds. A substantial percentage of its assets are in Facebook stock.

Since its creation in 2007, SVCF has directed hundreds of millions of dollars to organizations that seek to privatize public education, including charter schools and educational technology ventures.

Its influence lies not only in the grants it awards, but how it invests the $13.5 billion in assets it manages. Increasingly, these assets are being directed into social impact investing.

Globally, community foundations are being integrated into the social impact investment program. They leverage knowledge of local operating environments to advance unproven financial strategies that would be deemed too risky if proposed by organizations with less established reputations. They are the deal makers. That is the role SVCF has played with Pay for Success in Santa Clara County.

Community foundations enjoy special benefits under IRS law. They are not required to disburse funds annually, which means they can hold onto assets until favorable conditions arise. They are also able to obscure the specific source of donations, since grants from DAF funds list the sponsoring organization as the donor, not the owner of the fund itself.

SVCF is an example of a foundation that is sending a significant portion of its grant awards outside the region and even outside the United States. It may be doing this to secure investment opportunities that yield “impact” more readily than projects closer to home.

This form of philanthropy is neither humane, nor charitable. It deploys patient capital to prop up markets for predatory ventures that are intended to derive profit from the poor. Historically oppressed communities of black, brown and indigenous people will experience significant harm as they are subjected to digital surveillance and dispossession imposed under the banner of “charity.” Many of these “charitable” ventures in Silicon Valley have ties to the Catholic Church and even the Vatican. In this 400th year since enslaved Africans were brutally taken from their homelands by settler colonists and sold into bondage in Jamestown, it merits considering if we are seeing the  “Doctrine of Discovery” play out once again as we cross into a new age of digital empire.

Part One: Silicon Valley’s Social Impact Deal Maker

Part Two: To Serve Man: It’s A Cook Book!

Part Three: Philanthropy’s Lesser Known Weapons: PRIs, MRIs and DAFs

Part Four: Charter, Public Health and Catholic Charity Interests Help Launch “Disruptive” Pay for Success Program

Part Five: When Community Foundations Go Global (Or Coastal)