In L.A., an Example of Government Abdicating Duty to Philanthropy

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October 29, 2012; Source: Los Angeles Times

It’s not big news to find teachers unions and local school districts at loggerheads over applications for Race to the Top grants. But this brief piece about the aborted effort of the Los Angeles Unified School District (LAUSD) to submit an application for $43 million contains an interesting nuance: LAUSD Superintendent of Schools John Deasy said that any extra costs in the LAUSD’s Race to the Top program beyond what would be covered by the federal grant would be handled by private donations.

Race to the Top applications require the sign-off of the local teachers’ union, according to federal rules. The president of United Teachers Los Angeles, Warren Fletcher, said that the LAUSD Race to the Top application would have committed the district to a program costing more than what the federal grant would have paid for, with a result that might have entailed cutbacks in classroom teachers and services to students. “There was greater risk than likely reward,” Fletcher said. Meanwhile, the union and the school district are in mediated negotiations about the use of students’ test scores for teacher evaluations based on federal requirements that test scores be a “significant factor” in teacher evaluations by 2014, but Fletcher said that wasn’t the make-or-break issue.

For Deasy to look to private donations to cover Race to the Top costs beyond what the grant would provide for is an example of a dynamic that we have seen in several other dimensions of modern governmental practice. Through its research with the Urban Institute, the National Council of Nonprofits has documented the increasing practice of governmental entities requiring nonprofits to pay for part of the costs of the services that government is ostensibly contracting with them to deliver. We have documented many federal programs, such as the Social Innovation Fund, which require nonprofits to come to the table with private dollars to pledge as matching funds just to be considered for funding. We have warned that this could result in agencies at many levels of government writing structural funding deficits into legislation, calling for private contributions from foundations and individual donors to make up the difference.

Let’s make the distinction plain. It’s one thing for government programs to ask for matching funds to show an applicant’s commitment. It’s “skin in the game,” so to speak. It’s something entirely different to create programs that are structurally underfunded and presume that philanthropic and charitable funding will make them whole.

It’s unfair to create programs that require applicants to ante up big philanthropic dollars to get a seat at the table. That obviously favors large, connected organizations and discriminates—whether intentionally or not—against smaller nonprofits or organizations in regions that are philanthropically undercapitalized. It’s doubly unfair when government builds in structural deficits to programs that can only be addressed by foundations, typically, committing to fill the financial gaps. This is no longer a pattern of foundations supplementing government, but philanthropy taking the place of what should be governmental funding commitments. It looks like a path fraught with peril for government, nonprofits, and foundations.—Rick Cohen