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“Another market on the edge of change.” – Gabrieli

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Flashback to my August 19 post connecting the dots of Gabrieli’s investments in Advantage Schools, and the Lexington Institute quote:

While still a long way from achieving profitability, leading charter school companies have attracted investors who see the potential for lucrative, long-term returns, the social value of increased educational options for urban children, and usually both. Many are drawn by the dynamics of a sector Christopher Gabrieli of Bessemer Venture Partners describes as typifying “markets on the edge of change.”

The pattern is clear.

1.  Invest in a company that breaks new ground in public school privatization.

2.  Push for “reforms” or new programs that will pump money into these new ventures.

3.  Extract profits from children.

Children as new opportunities for profit in “markets on the edge of change.”  An investor who would get to set public policy as governor.  Sounds like bad new for public schools.

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  1. I looked up this company and its history. Acelero, the Head Start provider Ironwood invested in, was founded by Aaron Lieberman, the founder of Jumpstart, a nonprofit that is one of the most successful ventures in early education in the last two decades. He is no profiteer, but someone who came to believe, after much success running nonprofit Head Starts, that a management model from the profit sector might be able to coordinate multiple Head Start programs efficiently, thereby maximizing services provided. The Head Starts Acelero took over had had their grants revoked from the nonprofits previously running them, because they were failing. The decision to cut busing that the Globe article focuses on was part of a plan to make it possible to open several new facilities and increase enrollment, something that was welcomed by the communities served.

    • But you miss the point.  Gabrieli is an advocate for charters, preschool, and other programs outside of the public schools.  He invests heavily in these for-profit businesses that stand to make big money, but only if someone in the government directs public policy in their direction.

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      I don’t want a governor with a three step education policy of:
      1. Invest – get in on the ground floor
      2. Advocate – change public policy to give your corporate intetests a clear shot at big bucks.
      3. Profit – make the big bucks because you aligned public policy to your corporate interests.

      • Being open to public-private partnerships in education does not imply exploitation, let alone the outright corruption you are claiming (which, btw, completely shreds your credibility). No one in good faith could believe that, even if they opposed all profit in education. Someone who is “an advocate for … programs outside of the public schools” can also be a strong advocate of public schools.

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        By the way, these investments in education come from specialty “do-gooder” funds, which specifically focus on innovation for the public good, not primarily for profit.

        • I’m sorry.  I don’t see any public-private partnerships.  I see hostile takeovers. 

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          By the way, state aid to public school districts is not some sort of specialty “do-gooder” fund.  Federal and state funding for head start is taxpayer money for a public purpose, not some specialty “do gooder” fund.

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          And yes, I will call the invest-legislate-profit cycle of conduct to be blatantly corrupt.  Gabrieli’s business dealings with charter schools and now this for-profit head start program is no different than a city councillor who buys property, works the system to rezone it, then makes a killing because of the new zoning bylaw.

        • Pablo, I’m referring to the funds Ironwood invested in Acelero, not the government contracts Acelero won.

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          Michael, Chris referred to these funds at an event last night, so I’m going on his word, but it’s not a controversial point. Venture capital firms don’t make all their investments from one big pool, but have different funds targeted for different purposes, including the kind that seek to promote public goods, not unlike a green mutual fund. Their aim is to put the incentives of investment return to work for social causes, both in the actual programs funded and in the innovations they come up with that can benefit the whole field. Chris Gabrieli is a national leader in this kind of investment strategy and it’s one of the reasons I’m supporting him. I think he’s incomparably prepared to manage the relationship between government and the private sector (nonprofit and profit alike) in precisely the fields that matter the most to the state’s economic future: education, energy, high tech, biotech.

          • Seems like spin to me.

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            This is not a fund donating to a worthy nonprofit.  This is an investment in a for-profit corporation.  There’s a big difference.

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            The other disturbing thing is the secretive nature of these investments.  Another venture capital firm containing Gabrieli money, another for-profit education company.

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            How many more Gabrieli entities are investing in private corporations that stand to make a profit from public sector decisions?

    • Canonero said

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      The decision to cut busing that the Globe article focuses on was part of a plan to make it possible to open several new facilities and increase enrollment, something that was welcomed by the communities served.

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      Sounds like they abandoned children who needed a bus in order to expand market share.  If they can fill seats with kids who don’t need buses, they can reduce costs for the benefit of the corporation.

      • Sounds like … you’re just making stuff up. According to an article in the Asbury Park Press, July 15, posted at Acelero’s web site:

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        Since taking over the county’s Head Start, a preschool program for children living at or below federal poverty guidelines, Acelero has increased enrollment and has added a summer school program at all six centers. The company expects to have 506 students enrolled by the fall.

        Acelero also recently announced that it entered into a lease for three additional classrooms at the Freehold Head Start Center. Several children from Freehold were bused to the Head Start Center in Howell because the Freehold site had a waiting list.

        Acelero said at the time that it could not afford the high cost of busing while meeting its goal to improve the program and enroll more students.

        The new classroom space will allow Acelero to double its capacity in Freehold to about 120 students, said Monmouth County Head Start Director Kara A. Schultheis. The additional space should alleviate the need for busing, Lieberman said.

        “Our goal is to locate the centers where the families live,” Lieberman said. “We would rather spend money on teachers and other services than busing.”

        The decision to add classroom space in Freehold was hailed by the community.

        “It is going to be great for the families because there are a lot of families in need,” said Cecilia Reynolds, publisher of Nosotros, a local Spanish-language newspaper, and an advocate of Freehold’s Latino community.

        Acelero also is providing a summer school program for Monmouth County Head Start students for the first time in three years, Schultheis said.

        • The for-profit corporation discards high cost customers (kids who need a bus) in favor of expanding market share – to attract more customers who can generate higher profits.

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          The corporation’s goal is expansion of market share.  Under this model, school districts would eliminate special needs students, students who need buses, and second language students in favor of low cost regular-ed kids from out of town whose parents would drive them to school.

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          Oh, wait.  I’ve seen that model already.  Commonwealth Charter Schools.

  2. I think that Mr. Gabrieli has taken some bold steps in announcing his plans to keep kids off the street from 2:00 pm – 5:00 pm. His after school program has helped the city of Boston and many parent’s who can’t be home until dinner time. These days the house is empty during the day. leaving the door open for all kinds of trouble. This is a good idea.

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    Investing money in alternative school systems is also a good idea. I’m tired of paying 70% of my property taxes for schools that have more administrative personel than classroom teachers. I do not see anybody else tackling this issue. Mr. Gabrieli has been working on a 21st century education model for the United States so our children can be competitive in the world market. I call him a philanthropist not an oppourtunist.

    • Can you show me a public school with more administrative personnel than classroom teachers?

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      If you don’t like paying to support ONE public school system, how much do you think it costs to maintain publicly funded alternative school systems?  Instead of just one central office, you get a bunch of little one school districts with their own director, principal, business manager, et al.

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      Philanthropists donate to non-profits.
      Mr. Gabrieli invested for-profit corporations.
      Don’t you see the difference?

    • I’m tired of paying 70% of my property taxes for schools that have more administrative personel than classroom teachers.

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      This statement is patently ridiculous, so I’m thinking you don’t know a whole lot about the structure of school administration.  Show me a school with more administrators than classroom teachers.  In my public high school, for example, we have two–count ’em two–actual administrators, a principal and a vice-principal, and five secretaries for a student body of 650 and roughly 65 faculty. 

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      Gimme a break.

    • Investing money in alternative school systems is also a good idea. I’m tired of paying 70% of my property taxes for schools that have more administrative personel than classroom teachers.

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      Folks grab the low-hanging fruit to criticize your entire post.  Of course administrative personnel doesn’t exceed the number of classroom teachers.  Public schools are no different from any public institution–they grow without contraint.  That applies to admin and teachers and costs that those individuals approve.

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      Certainly, the admin doesn’t exceed teachers, but without knowing the district, I’d wager that the non-teacher headcount for the district is no less than 40% of the total.  And, I’ll further wager that the percent has increased over the last decade.

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      Public schools do a great job, but such institutions as they grow, deliver more and more of a ‘general’ product–one size fits all, and demand more and more resources.

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      The answer is school choice, whether it’s vouchers, private, charter, homeschool. It’s the only means to curtail the institutional growth endemic school and the NEA.

      • Given the different funding streams:

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        – public schools funded under Proposition 2.5 and massive local aid cuts when Romney took office
        – Commonwealth charter schools funded as an entitlement, with garnishments from a sending town’s local aid allocation

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        the only place where I would see top-heavy administration is in the Comm charters.  In fact, I know where you can find a charter school budget, approved by the state Department of Education, that allocated $436,500 for full time teachers and $393,750 (plus benefits) for administrators.  I’ll bet there isn’t a town meeting in the state that would tolerate that budget!

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