University of Washington scholars Wayne Au and Joseph J. Ferrare have written an excellent analysis of the big money that flooded the state of Washington to pass charter legislation in 2012. Although defeated three times before by voters, this time the proposal passed by a tiny margin. Its major funders were Bill Gates, who has no children in public school, and Walmart heiress Alice Walton,who lives in Arkansas. Substantial help was provided by other members of the Billionaire Boys Club and their claque (such as Stand for Children).

The more than $10 million they amassed was sufficient to buy what they wanted.

The moral of the story: a small number of very wealthy individuals and organizations bought a policy of their choosing. This subverts democracy. It subverts the principle of one man, one vote.

These are not reformers. They are plutocrats who use their vast wealth to buy what they want.

Here are a few choice quotes:

“Conclusions/Recommendations: This study concludes that, compared to the average voter in Washington, an elite group of wealthy individuals, either directly through individual donations or indirectly through their affiliated philanthropic organizations, wielded disproportionate influence over the outcome of the charter school initiative in the state, thereby raising serious concerns about the democratic underpinnings of an education policy that impacts all of the children in Washington State. This study also concludes that elite individuals make use of local nonprofit organizations as a mechanism to advance their education policy agenda by funding those nonprofits through the philanthropic organizations affiliated with those same wealthy elites. In light of these conclusions, the authors recommend that a mechanism for more democratic accountability be developed relative to education policy campaigns, initiatives, and legislation.

“INTRODUCTION

“To paraphrase F. Scott Fitzgerald, today’s plutocrats are not like you and I; nor do they resemble the politicians we elect. Even when they assume the authority to set public policies, they are, I fear, not sackable. (Bosworth, 2011, p. 386)

“With the backing of both major political parties, billionaire philanthropists, venture capitalists, business leaders, and a growing network of nonprofit organizations and research centers, charter school policy has evolved into a major component of the current education reform movement in the United States (Fabricant & Fine, 2012; Rawls, 2013). As of 2012, all but nine U.S. states allowed charter schools (National Alliance for Public Charter Schools, 2013), and in one of those nine, Washington State, charter school legislation was passed by popular vote in November 2012 (Reed, 2012)…..”

And more:

In this section we present the findings of our network analysis in two phases. First, through two tables, we present data on cash and in-kind contributions to the Yes On 1240 campaign and funding relationships between campaign donors, affiliated philanthropies, and organizational campaign supporters (Tables 1 and 2). Second, we visualize these relationships through a simple directed graph that traces the flows of sponsorship (material and symbolic) among policy actors (Figure 1).

YES ON 1240 CAMPAIGN CONTRIBUTIONS

Several important findings arise when we analyze the contributions to the Yes On 1240 campaign.

Table 1: Yes On I-1240 Campaign Cash and In-kind Contributions of $50k and More

Yes On 1240 Donor

Donation Amount

1.

Bill Gates Jr. – Microsoft cofounder and current chairman

$3,053,000.00

2.

Alice Walton – heiress; daughter of Walmart founder, Sam Walton

$1,700,000.00

3.

Vulcan Inc. – founded by Paul Allen, Microsoft cofounder

$1,600,000.00

4.

Nicolas Hanauer – venture capitalist

$1,000,000.00

5.

Mike Bezos – father of Amazon.com founder Jeff Bezos

$500,000.00

6.

Jackie Bezos – mother of Amazon.com founder Jeff Bezos

$500,000.00

7.

Connie Ballmer – wife of Microsoft CEO Steve Ballmer

$500,000.00

8.

Anne Dinning – managing director D.E. Shaw Investments

$250,000.00

9.

Michael Wolf – Yahoo! Inc. board of directors

$250,000.00

10.

Katherine Binder – EMFCO Holdings chairwoman

$250,000.00

11.

Eli Broad – real estate mogul

$200,000.00

12.

Benjamin Slivka – formerly Microsoft; DreamBox Learning cofounder

$124,200.00

13.

Reed Hastings – Netflix cofounder and CEO

$100,000.00

14.

Microsoft Corporation

$100,000.00

15.

Gabe Newell – formerly Microsoft; Valve Corporation cofounder

$100,000.00

16.

Doris Fisher – Gap Inc. cofounder

$100,000.00

17.

Kemper Holdings LLC – local Puget Sound developer

$110,000.00

18.

CSG Channels

$60,000.00

19.

Education Reform Now

$50,000.00

20.

Bruce McCaw –McCaw Cellular founder

$50,000.00

21.

Jolene McCaw – spouse of Bruce McCaw

$50,000.00

Source: Washington State Public Disclosure Commission (2012a)

Table 1 highlights that $10.65 million in total, or almost 98% of the $10.9 million raised for the Yes On 1240 campaign, was funded by 21 individuals and organizations who each donated more than $50,000 to the campaign (Washington State Public Disclosure Commission, 2012a).

Notably, Bill Gates Jr. is the biggest contributor ($3M) to the campaign, nearly doubling the next biggest contributions coming from Walmart heiress Alice Walton ($1.7M) and Vulcan Inc. ($1.6M),2 Microsoft cofounder Paul Allen’s company. As a more general finding, these amounts indicate that a number of select wealthy individuals with no immediate connection to Washington State (e.g., Eli Broad and Alice Walton) demonstrated a vested interest in charter school policy in the state. Another finding that emerges from the data is that wealthy individuals who are connected to the technology sector also demonstrated a vested interest in promoting charter school policy in Washington State (12 of the top 21 contributors to Yes On 1240 are strongly connected to the technology sector). Additionally, as might be expected given the interconnectedness of any sector of industry, several of these individuals have historical and industry-related connections to Microsoft Inc. and Microsoft Inc. cofounder and chairman, Bill Gates Jr.

It is also of value to highlight the $50,000.00 donation to the Yes On 1240 campaign from Education Reform Now Advocacy Committee because it illustrates the tightly woven interconnectedness of organizations and funding structures associated with education policy reform advocacy. New York State tax records from 2006 explicitly indicate that Education Reform Now, Inc., Education Reform Now Advocacy Committee, and DFER all share officers, personnel, office space, and paymasters (Libby, 2012). Tax records from 2007 further indicate that Education Reform Now Inc. and Education Reform Now Advocacy Committee share these same resources (New York State Office of the Attorney General, 2013). Thus, it is difficult to determine where DFER, Education Reform Now Inc., and Education Reform Now Advocacy Committee begin and end individually because, in essence, they represent a financially intertwined cluster of three organizations that seem to operate as a single organization with overlapping staff and resources. Consequently, even though tax records do not allow us to fully understand the exact relationship, the $50,000.00 donation to the Yes On 1240 campaign from Education Reform Now Advocacy Committee is functionally also a donation from Education Reform Now Inc. and DFER.

YES ON 1240 CONNECTED ORGANIZATIONS

As discussed above, four organizations, LEV, DFER, Stand for Children, and Partnership for Learning, publicly claimed credit for leading and coordinating the Yes On 1240 WA Coalition for Public Charter Schools (Yes On 1240, 2012a). An analysis of the in-kind donations to the Yes On 1240 campaign (that is, donations of labor or other services that are given cash value and added to the campaign donation total) supports this claim: Those four organizations predominate the in-kind donations database and are the only organizations listing “staff time” as donated in kind to the campaign (Washington State Public Disclosure Commission, 2012c). Further, as a university-based research center, they cannot be listed as having provided in-kind donations (or any donations) directly to a political campaign in the state. Because of their active role in providing direct, nonmonetary support for the Yes On 1240 campaign vis-à-vis being highlighted prominently in a campaign video (Yes On 1240, 2012b) and authoring a research report explicitly in support of I-1240 (Lake et al., 2012), we have included the CRPE here as a “connected organization” for their symbolic contribution to the campaign through the lending of their expertise.

PHILANTHROPIC CONNECTIONS TO THE YES ON 1240 CAMPAIGN

Cross referencing information gathered from the Google search engine, philanthropy websites, and available tax records (Foundation Center, 2013) produced the following 11 foundations directly connected to major donors to the Yes On 1240 campaign (in alphabetical order): Apex Foundation (formerly the Bruce & Jolene McCaw Foundation), Bezos Family Foundation, Bill & Melinda Gates Foundation, Corabelle Lumps Foundation (formerly the Anne Dinning and Michael Wolf Foundation), the Doris & Donald Fisher Fund, The Eli and Edythe Broad Foundation, the Goldman Sachs Philanthropy Fund (connected through the Connie and Steve Ballmer advised Biel Fund),3 Lochland Foundation (Katherine Binder, cofounder, officer, and contributor), The Walton Family Foundation, and Wissner-Slivka Foundation. Using foundation databases, foundation reports, available tax records, organizational websites, and institutional reports, we then looked for whether or not these foundations provided funding to the Yes On 1240 campaign-related organizations.

Table 2: Philanthropic Support for Yes On 1240 Connected Organizations

Organization

Amount

Foundation

Center on Reinventing Public Education

$8,578,000

Bill & Melinda Gates Foundation

$701,000

The Walton Family Foundation

$512,813

The Eli and Edythe Broad Foundation

Education Reform Now (Democrats for Education Reform)

$2,925,000

The Walton Family Foundation

$2,481,716

The Eli and Edythe Broad Foundation

$600,000

Doris & Donald Fisher Fund

$500,000

Corabelle Lumps Foundation

$15,000

Bezos Family Foundation

League of Education Voters

$4,790,000

Bill & Melinda Gates Foundation

$257,000

Lochland Foundation

$160,139

Bezos Family Foundation

$1,000

Apex Foundation

Partnership for Learning

$4,700,000

Bill & Melinda Gates Foundation

Stand for Children™

$9,000,000

Bill & Melinda Gates Foundation

$2,857,945

The Walton Family Foundation

$350,000

Goldman Sachs Philanthropy Fund

$120,304

Bezos Family Foundation

$55,000

Wissner-Slivka Foundation

$25,000

Lochland Foundation

$1,000

Apex Foundation

(Sources: Bill & Melinda Gates Foundation, 2013; Foundation Center, 2013; Libby, 2012; New York State Office of the Attorney General, 2013; Stand for Children, 2013; University of Washington Bothell Office of Research, 2013; University of Washington Bothell Office of Sponsored Programs, 2013)

“As Table 2 indicates, the philanthropic foundations connected to major contributors to the Yes On 1240 campaign provided a range of support directly to three of the four campaign-coordinating organizations and the CRPE: the Apex Foundation’s $1,000.00 contributions to each LEV and Stand for Children were the smallest, and the Bill & Melinda Gates Foundation’s total contribution of $9,000,000.00 to Stand for Children was the largest. Further, while DFER received no direct philanthropic support, its sister organization Education Reform Now received ample support from campaign-connected philanthropies, and, as detailed above, the overlap of resources between the cluster of Education Reform Now Inc., Education Reform Now Advocacy, and DFER, is very fluid. The Bill & Melinda Gates Foundation is the most prominent here, haven given over $27 million total to Yes On 1240 campaign-connected organizations across multiple years, grants, and contracts. The Walton Foundation is second-most prominent, having contributed $6.48 million to campaign-connected organizations, followed by the Broad Foundation at $2.99 million in support for campaign-connected organizations. There is a precipitous drop in total support after these three, potentially indicating smaller amounts of financial support originating from smaller foundations (e.g., Lochland Foundation or the Bezos Family Foundation). Regardless of the amount, foundation support of the organizations directly involved in the Yes On 1240 campaign is indicative of ideological alignment around specific education reforms (in this case, charter schools) between funders and grantees/contractors.”