Opinion

Felix Salmon

Why charitable donations to public schools are OK

By Felix Salmon
September 6, 2013

Rob Reich is worried about school inequality. (Longer, more fun version here.) When it comes to education, as in so many other fields, the rich just get richer, leaving everybody else behind. His Exhibit A: the parents of wealthy Hillsborough, California, who between them donate some $2,300 per child per year — all of it fully tax-deductible — to supplement the money coming from the state. This, says Reich, is not what charitable deductions are for:

Wanting to support your own children’s education is understandable, but it also has unintended, pernicious effects… charity like this is not relief for the poor. It is, in fact, the opposite. Private giving to public schools widens the gap between rich and poor. It exacerbates inequalities in financing. It is philanthropy in the service of conferring advantage on the already well-off… Tax policy makes federal and state governments complicit in the deepening of existing inequalities that they are ostensibly responsible for diminishing in the first place.

On the one hand, I should really agree with Reich here. After all, I spent 1,500 words last year railing against the private-school equivalent of these donations: the charitable top-ups that parents get arm-twisted into paying to educate their own kids. But in fact, partly because of that post, I actually quite like what’s happening in California.

For one thing, we’re seeing some real community spirit here: the parents of Hillsborough are supporting the entire school district with their donations, rather than just their own kids’ specific schools. As a result, their donations are improving the lot of every child in their district. True, most of those kids, as Reich says, are “already well-off”. But the quality of education in aggregate is improved, and while inequality might be exacerbated between communities, it isn’t exacerbated within communities, which is what results when the richest members of society decide to take their kids out of the public school system entirely.

The parents of Hillsborough have come to a collective realization: if they club together to make their public schools excellent, then none of them need to think about sending their kids to private school. An annual donation of $2,300 is peanuts compared to even the cheapest private-school tuition — and can result in a better education, too. (I can tell you first-hand that Palo Alto’s public schools are better than a certain expensive private school in London.)

As Richard Reeves says, the job of redistribution rightly belongs to the government, not to individual charitable donors. The state of California should take some of the money currently being spent in Hillsborough, and spend it instead in East Palo Alto, where it’s needed much more urgently. At the margin, private cashflows in Hillsborough should just make such redistribution easier, rather than harder. California, even more than most states, is suffering from enormous budget cutbacks; if there are thousands of parents around the state who are willing and able to augment current education funding, that’s a gift horse which I don’t think needs a huge amount of dental examination.

As Reich himself says, “when it comes to addressing the root cause of inequality in public education in the United States, the solution will have little or nothing to do with philanthropy”. It stands to reason, then, that philanthropy is not the problem here either. I do worry about the rise of what I call “transactional philanthropy” — the quid-pro-quo model where you give money to a philanthropy just because you get something back in return. (A tote bag, your name on a building, a better education for your child.) But I’m also drawn to the deeper idea of what’s going on here.

We all pay for public education, because it’s a public good. Private education, meanwhile, is a private good, which is rightly paid for with after-tax income. California is now developing an intermediate model — what the Hillsborough Schools Foundation likes to call “a groundbreaking public-private partnership to support our schools”. I’d like to think that the the intermediate model, at the margin, might slowly replace the old binary model, and result in wealthy parents being more involved in their local public schools, and less likely to opt out entirely by sending their kids to private school. And that, in turn, would be good for everybody.

Comments
16 comments so far | RSS Comments RSS

Speaking of Palo Alto, how do you feel about programs like this at Palo Alto?

http://www.burbed.com/2010/02/07/how-muc h-would-you-pay-to-talk-to-the-superinte ndent/

>Give over $10,000 and you get all the above, and an “invitation to individual discussion with PAUSD superintendent.”

Posted by dtc | Report as abusive
 

It’s even worse than you think – a friend of mine moved to Hillsborough specifically for the schools and found out shortly there after that there is a subtle but effective enforcement system to compel everyone living in Hillsborough to donate. It’s effectively not a choice but an extra tax and $2300 is the minimum.

That said, it does work – I’m not sure if it’s the extra money, but Hillsborough apparently has one of the best student to teacher ratios anywhere, better than private schools (which charge something like $20k/yr) in the Bay Area and twice what public schools have.

The side effect of all this is that houses in Hillsborough start at around $2.5 million, so you have to be rich to even afford to live there.

Posted by ckm5 | Report as abusive
 

Felix,

I you want to opine on what charitable deductions are not for, please prepare a posting on contributions to museums. That’s where the real money (and the real stealing) is, after all.

Posted by roofers1 | Report as abusive
 

“We all pay for public education, because it’s a public good. Private education, meanwhile, is a private good, which is rightly paid for with after-tax income.”

I don’t think this is right, Felix. The “public good” argument for public education is that the general education level of society inures to the general benefit of us all. It is a positive consumption externality – educating Felix Salmon benefits me because your increased productivity and general erudition has an unpriced net benefit for me. Thus, societal education level has elements of non-excludability – the general level of education of any specific individual has positive spillover effects on others. Also, education level (as opposed to instruction services) is non-demand rival: someone being more educated or knowledgeable does not leave less available education or knowledge for the rest of us. Education, per se, is a public good, regardless of whether it is privately or publicly financed, or whether it is privately or publicly provided.

Posted by Sunset_Shazz | Report as abusive
 

One more point: one could argue that educating the most talented children results in the greatest public good / externality effect – the public schools that educated Richard Feynman or Norman Borlaug or Alan Turing have benefitted all of us, rich or poor, incalculably. Public policy should be obsessed with identifying these talents and showering them with subsidies (as the Macarthur foundation has attempted with adults).

Posted by Sunset_Shazz | Report as abusive
 

“We all pay for public education, because it’s a public good. Private education, meanwhile, is a private good,”

As with Shazz.

There are aspects of education itself being a public good but the distinction between public education being one and private not doesn’t work.

We get the same benefits of a bright person having been well educated whether they were educated publicly or privately. Indeed, we can argue that private education is more of a public good than public education. For if a bright person is well educated on private money then I still get those benefits of a well educated person doing stuff without having had to pay for it through my taxes.

Posted by TimWorstall | Report as abusive
 

My daughters highschool has a recording studio, 350 seat theater, and athletic facilities that would make most DIII colleges jealous. All of it paid for exclusively by the dreaded 1%. The plaques are everywhere, everything from the theater seats to the scoreboards are named in someones honor.

Our town is meaningfully below both the state and national averages for per capita income and everyone benefits from the giving of the well off. Our school system is a source of pride for the entire community. If you’re looking for a really cool place to relocate or retire put Brunswick, ME on your list of places to spend a weekend!

Posted by y2kurtus | Report as abusive
 

The Ravenswood City Elementary School District – which includes East Palo Alto – spends approximately $13k per student, which puts it in the top 25% of school districts in California. Test scores are in the lowest 25%.

http://schoolspending.apps.cironline.org  /county/san-mateo/district/ravenswood-c ity-elementary/

Hillsborough spends a bit more per student – $13.5k – and test scores are in the top 25% in the state.

http://schoolspending.apps.cironline.org  /county/san-mateo/district/hillsborough -city-elementary/

The broader question nationally is why we don’t get better value for school funding, which has skyrocketed over the last several decades – even when viewed on a per pupil, inflation-adjusted basis – http://nces.ed.gov/fastfacts/display.asp  ?id=66 . K – 12 public school spending on that basis has nearly doubled since 1980.

Posted by realist50 | Report as abusive
 

realist50 comment above completely misses the point of Felix’s post, or is unaware of how funding works in these schools.

The spending numbers cited are true.

But it ignores the impact of Parents Clubs. You see, in Hillsborough, Palo Alto, Cupertino, and other “top” Bay Area school districts, parents are expected to pay an mandatory donation for $2000.

I kid you not – when I went to a financial advisor, I had to fill out questionnaire about my income and expenses. On the page for Children Related Expenses, right near “After School Programs” was “Mandatory Donations”. It’s a well known thing here.

So, parents give $2000 mandatory donations to the Parents’ Clubs that run the school. NOT PTA – those are regulated and have rules.

These Parents’ Clubs then go HIRE TEACHERS directly into the school. The district doesn’t have enough money for a Mandarin teacher? No problem – the parents hire one directly.

In short, there’s a set of “dark pools” of money that rich school districts have access to.

Posted by dtc | Report as abusive
 

ALSO, it’s worth pointing out that 96% of students in East Palo Alto are eligible to receive Free or Reduced Price Lunch. 96%!!

69% of students in Ravenswood District’s elementary and middle school students are English Language Learners (ELL).

realist50 asks “The broader question nationally is why we don’t get better value for school funding”

Hm… if I were a great teacher, would I rather be working in Hillsborough where parents are buying teachers for classrooms? Or do I want to work in Ravenswood where 2 out of 3 children are hungry and don’t speak English?

Vicious cycle for poor kids in East Palo Alto.

Posted by dtc | Report as abusive
 

“…2 out of 3 children are hungry and don’t speak English?”

Worse, if anybody were a teacher, would they want to work in class where 2 out of 3 children have PARENTS that are hungry and don’t speak English?! That kind of domestic environment probably negate any (if any) positive development brought by a good teacher.

Posted by winkyshark1932 | Report as abusive
 

That would be good for everyone if rich and poor families lived in the same school district. But do they? I am inclined to think not. Therefore, if rich families donate to their own school districts, their donations might not spill over to lower-income families.

Posted by weiwentg | Report as abusive
 

left unsaid in the the discussion between hillsborough and east palo alto is the level of parental involvement. if the parents are conscious enough (and well off enough) to pay the extra $2k then that by definition means that they are involved in other aspects of their children’s lives — be it shuttling them to various after school activities or hiring private tutors. Learning doesn’t just happen within the four walls of the school.

Posted by GregHao | Report as abusive
 

@Sunset_Shazz “One more point: one could argue that educating the most talented children results in the greatest public good / externality effect – the public schools that educated Richard Feynman or Norman Borlaug or Alan Turing have benefitted all of us, rich or poor, incalculably.”
Excellent point. However you mentioned this in reference to private education being a public good as much as public education. I wouldn’t say private education is a public good because it doesn’t necessarily encourage the best and brightest; merely those with the most money living in the best neighbourhoods.
You mention “someone being more educated or knowledgeable does not leave less available education or knowledge for the rest of us”
While true in theory, it’s not the education that’s in limited supply, but it’s more about the pot of money available for education. More funding to private schools and less to public (by virtue of private donations to private schools being made instead of private donations to public schools) would, in my opinion, have the opposite effect of increasing overall education and benefitting everyone. I imagine it to be sort of like an archaic aristocratic model, where the best and brightest can only get the education they need to get ahead if they happen to have come from the right background. All the Alan Turings and Richard Feynmans born in the inner city are unable to get the education they need to thrive, and so do not realise their potential which would otherwise help us all.

In my view you should have public schools set up for the sole purpose of encouraging the best and brightest, rather than relying on the private sector to do this.

Posted by K.MacKenzie | Report as abusive
 

>Therefore, if rich families donate to their own school districts, their donations might not spill over to lower-income families.<

In some of the districts here in Silicon Valley, the donations go directly to a school. (One of the key differences between a PTA and Parents’ Club). So even within a district, schools can have significantly different resources.

Posted by dtc | Report as abusive
 

>if the parents are conscious enough (and well off enough) to pay the extra $2k then that by definition means that they are involved in other aspects of their children’s lives <

Like feeding their children.

Like buying their children basic school supplies.

The situation is really sad.

Posted by dtc | Report as abusive
 

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