Charter Schools are drawing promoters from a place you might not think of: Walmart.
The Walton Family Foundation — the philanthropic group run by the Walmart family — sponsored a symposium at the Harvard Club for investors interested in the charter school sector, last week.
The event, hosted in Manhattan, was called “Bonds and Blackboards: Investing in Charter Schools,” and was cosponsored by the Bill & Melinda Gates Foundation.
With the explicit intent of helping investors “Learn and understand the value of investing in charter schools and best practices for assessing their credit,” the event featured experts on charter school investing from Standard & Poor’s, Piper Jaffray, Bank of America, and Wells Capital Management, among others.
Charter schools are gaining in popularity throughout the US amid claims that they outperform traditional public schools. They started in the 1990s as alternatives to traditional public schools and receive both public and private funding. However, they’re not governed by the same rules as public schools, especially with regard to state-mandated testing.
Hedge funds and other private businesses are particularly interested in the growth and success of charter schools. The growth of charter networks around the US offer new revenue streams for investing, and the sector is quickly growing. Funding for charter schools is further incentivized by generous tax credits for investments to charter schools in underserved areas.
“It’s a very stable business, very recession resistant, it’s a high demand product. There are 400,000 kids on waiting lists for charter schools … the industry is growing about 12-14% a year,” David Brain, former President and CEO at EPR Properties, told CNBC in 2012.
“It’s a public payer, the state is the payer on this category,” he added in support of the highly safe investing opportunities in charter schools.
Critics of hedge fund investment into charter schools voice concern over private money dictating educational policy. Opponents fear that businesses, only motivated by financial gain, will dictate the educational landscape — at the expense of children in public schools.
“New York State is plagued by legal corruption: campaign contributions and outside spending explicitly designed to buy policy outcomes,” Fordham university professor and ex-gubernatorial candidate Zephyr Teachout wrote in a paper in December. “In 2014, a tiny group of powerful hedge fund executives, representing an extreme version of this corruption, spent historic amounts of money in order to take over education policy.”
The Waltons in particular have arguably had an outsize impact on education policy. The Walton Family Foundation — with $US2.5 billion in assets — can, and has, thrown an enormous amount of muscle into the charter school movement.
Particularly in Washington, D.C., the Waltons’ support of charters can be seen where they have bankrolled numerous charter school endeavours.
“Walton has subsidized an entire charter school system in the nation’s capital,” The New York Times reported last year, “helping to fuel enrollment growth so that close to half of all public school students in the city now attend charters.”
We reached out to the Walton Family Foundation and the Bill and Melinda Gates Foundation and will update this post if we hear back.
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