This is an excellent report on how hedge fund managers have been behind the charter school movement since the very beginning. Now they are buying school board seats by overwhelming cities with campaign donations that competitors who oppose charter schools can’t begin to match. From the very beginning, the hedge fund managers have seen Barack Obama has an ally. He has definitely confirmed their faith in him.
The hedge fund industry and the charter movement are almost inextricably entangled. Executives see charter-school expansion as vital to the future of public education, relying on a model of competition. They see testing as essential to accountability. And they often look at teacher unions with unvarnished distaste. Several hedge fund managers have launched their own charter-school chains. You’d be hard-pressed to find a hedge fund guy who doesn’t sit on a charter-school board.
Consider Whitney Tilson. Straight out of Harvard, Tilson deferred a consulting job in Boston to become one of Teach For America’s first employees in 1989. Ten years later, he started his own hedge fund in New York. Soon after that, Teach For America founder Wendy Kopp took him on a visit to a charter school in the South Bronx. It was an electrifying experience for him. “It was so clearly different and so impactful,” Tilson says. “Such a place of joy, but also rigor.”
The school was one of two original Knowledge Is Power Program schools—better known as KIPP—which has since grown into a prominent charter network with nearly 200 schools in 20 states plus the District of Columbia, serving almost 70,000 students, predominately low-income and of color.
But back then, charter schools were still a rather unfamiliar novelty to most people. Tilson, however, was convinced that they were the future of education. He started dragging all his friends, most of whom were hedge fund investors, from Wall Street up to the South Bronx to see the KIPP school. “KIPP was used as a converter for hedge fund guys,” Tilson says. “It went viral.”
Many critics of the corporate education-reform movement are quick to accuse proponents of seeking to cash in on the privatization of one of the United States’ last public goods. And while there certainly are those in ed-reform circles who stand to benefit from a windfall of new education technology, testing, and curriculum services, hedge funders by and large do not fit that stereotype. Theirs is more of an ideological and philanthropic crusade, rather than a crude profit-seeking venture.
As Tilson explains it, hedge fund managers almost exclusively come from well-off backgrounds and got the best educations in the world. “I personally never knew what the situation was like for families forced to attend their local school in the South Bronx, or Brooklyn,” Tilson says. “I didn’t know of anyone who dropped out of high school or college—much less that there were high schools where half the students dropped off.”
And of course rather than blame poverty, he blamed unions, which the charter school movement has declared war upon.