In mid-May, Jeremy Nowak joined School Reform Commission chairman Pedro Ramos and pro-charter-school activists at a long meeting to discuss a big problem: They were losing the media war to opponents of the plan, released three weeks earlier, to dismantle the Philadelphia School District and potentially put public schools under private management. Nowak, who took over as chief executive of the William Penn Foundation in June 2011, was very much invested in the plan’s success. The foundation had given $1.45 million directly — and helped obtain at least $1.2 million more — to pay the Boston Consulting Group to develop a so-called “Blueprint” for restructuring the troubled district.
But while the SRC, Republican Gov. Tom Corbett and Boston Consulting were all targets of protesters’ ire, Nowak’s role was discussed by just a few. And then only in whispers.
“I think he’s taking an activist approach to being president of the foundation, and he has an agenda,” says one observer of city schools who, like many interviewed for this story, spoke only on condition of anonymity. “It is a shadow school district that’s being bankrolled by people who don’t even live in the city.”
Conversations with sources, along with documents obtained by City Paper, portray an expanding network of pro-charter-school organizations close to, and in many cases funded by, William Penn, coordinating with the state-controlled School District to map out the future of Philly public education. It is now clear that Nowak, a major charter-school supporter and longtime force in Philadelphia, had taken the city’s most powerful foundation in an aggressively political direction.
Nowak didn’t stop at shepherding funds toward the creation of the Blueprint. He also became a staunch supporter of it — making it, if nothing else, perhaps the best-funded public-relations disaster in Philly history.
The May working-group meeting indicates the scope of his involvement, according to one account: Nowak was frustrated that charter-school parents weren’t speaking out in favor, while Ramos complained of a guerrilla dissident movement inside School District headquarters. By this time, William Penn had turned to Sage Communications to prepare a public-relations campaign. Sage’s Sharon Gallagher worked with the pro-charter Philadelphia School Partnership (PSP) on the media training of Ramos, PSD chief recovery officer Thomas Knudsen and SRC member Feather Houstoun (who, as it happens, is Nowak’s more mild-mannered predecessor at William Penn). For this meeting, Nowak also called in Tierney Communications chief executive Mary Stengel Austen, a “crisis specialist,” according to her website.
The group that gathered in May identified two key opponents: Labor unions and the black middle class, the latter led by the Rev. Alyn E. Waller of Germantown’s Enon Tabernacle Baptist Church. The unionized teachers were a particularly formidable — and expected — source of opposition. Ramos planned to reopen the Philadelphia Federation of Teachers (PFT) contract after the July 1 budget deadline, and the group discussed a multifaceted plan to defeat them. While Ramos had asked the Chamber of Commerce to bankroll a lobbying campaign, Nowak felt the chamber was not pulling its weight and wanted it to pay for public relations. But the lobbying, whoever ultimately paid for it, fell apart once infuriated Philadelphia Democrats discovered that Ramos had bypassed them and directly appealed to Republicans for new union-busting powers.
The public-relations objectives outlined at the May meeting were not all achieved — yet the Blueprint proposal lives on. Critically, perhaps the most important player didn’t come from within the district administration, city government or the state. Rather, Nowak — from his 11th-floor office in Logan Square, at the helm of a $1.9 billion foundation increasingly shaped in his image — has been in many ways charting the course.
Behind the scenes, he has had a hand in not only the Blueprint, but the recent superintendent search, dealings with unions and the advancement of a pro-charter, even pro-voucher, agenda. And that’s just the schools. Long before Nowak’s arrival, William Penn had funded urban planning, news media and environmental and community-organizing groups in the city. Now, via the checks he writes — and the apparent political calculus behind them — Nowak has become one of the most influential Philadelphians most Philadelphians don’t know.
Jeremy Nowak is a big guy with a bulldog’s bearing. Profoundly unruffled, he tilts his smooth, shiny head back as he ponders his vast new realm. It stretches from William Penn’s Center City office out through the Delaware and Susquehanna watersheds.
“Those two watersheds together,” he explains, “feed water for 20 to 25 million people.”
Watersheds, along with education and culture, are William Penn’s three new grant-making areas. Concerns range from the renewal of the federal Clean Water Act to natural-gas drilling. Closer to home, the foundation has funded the creation of an expanding regional trail system along the Schuylkill, Delaware and Cooper rivers and Pennypack and Wissahickon creeks.
For these investments, Nowak is demanding results that match William Penn’s growing stature in the universe of Philly philanthropy. Communications mogul Gerry Lenfest (whose foundation gave $250,000 for the Boston contract) is spending down his enormous wealth, and the Pew and Annenberg foundations have moved their attention and even their offices out of town.
The once-avowedly liberal and soft-spoken William Penn Foundation, long in the shadows of Pew and Annenberg, is now Philadelphia’s largest locally focused foundation. “Annenberg moved to the other coast,” says Nowak. “Pew … they’re much more national, and even global. And so it’s really great for us to stay here, as local. I’m a Philly guy. So I’m really happy about that.”
Founded in 1945 as the Phoebe Waterman Foundation, William Penn was, like other major 20th-century foundations, made by industrial wealth. Otto and Phoebe Haas made a fortune from Rohm & Haas Company, the Philadelphia chemical giant that in 2009 merged with Dow.
Nowak, who indeed pronounces “woodershed” like a true Philadelphian, says that he will soon launch a program to encourage a new generation of Philadelphia wealth — accrued in financial services, real estate and technology — to start spending that money here.
“There’s family money out there,” he says, and “it’s new money.”
William Penn “may have been fourth or fifth on the list 10 or 12 years ago. We’re now first on the list. We don’t want to be first on the list. We want five other guys our size.”
That new money, generated in the service economy from Silicon Valley to Wall Street, has already funded a sea change in national philanthropy. And three major new-money foundations — Bill and Melinda Gates, Eli and Edythe Broad and the Walton Family foundations — have, like Nowak, focused their largesse on remaking American public education. Over the past decade, the big three have established themselves as the nation’s most important education funders, and they’ve become among its most powerful policy makers, too. They set an agenda: in support of charter schools and high-stakes standardized tests.
“They are imposing all of these steps to supposedly hold teachers accountable, but in the meantime the people who are coming up with the metrics and the management techniques have no public accountability whatsoever,” says Alice O’Connor, a professor at University of California Santa Barbara who studies philanthropy and public education. “And that’s really, really scary.”
So how deep does the influence of these foundations run in our public education systems? It’s almost too far to plumb. Considered alongside the network of well-funded conservative organizations that openly seek to privatize public-education, it could be overwhelming.
Locally, the Nowak- and Ramos-led working group discussed the two final superintendent candidates — weeks before they were announced to the public. Both would have seemed to be politically suitable, being graduates of the Broad Foundation’s pro-corporate-reform Superintendents Academy. Ramos assured Nowak that a promising black candidate was a finalist. That candidate might have been William R. Hite Jr., whose hiring was announced last Friday.
At the heart of all this is a seemingly well-intentioned but secretively coordinated call for “quality education” — a phrase that seems, increasingly, to be code for corporate school reform. “Those stuck in the charter v.-district debate,” says Nowak, “are stuck in a past that simply doesn’t meet our students’ needs.”
One group that may benefit from this evolution: The Philadelphia School Partnership (PSP), a two-year-old pro-charter organization that is expected to receive a $15 million William Penn grant. PSP has become a chief William Penn lieutenant in a pro-school-privatization network that reaches across, and channels money through, the city, state and nation.
PSP also has a number of wealthy board members with pro-voucher leanings who contributed to the Boston contract. To that end, real estate developer Michael O’Neill contributed $100,000, according to the Philadelphia Public School Notebook. And an undisclosed amount was donated by Janine Yass, wife of conservative Bala Cynwyd hedge-fund manager Jeffrey Yass, among the state’s most high-profile voucher supporters. That money and more was funneled through the United Way of Southeastern Pennsylvania, which has been a major recipient of William Penn largesse and had the ideal apolitical reputation to serve as a conduit.
Yet despite millions of dollars in funding and United Way cover, the working group felt under siege. Ramos, participants in the May meeting lamented, was the SRC’s lone effective messenger; Wendell Pritchett was disengaged, while Lorene Carey appeared hesitant. Joseph Dworetzky, who had voted against a slew of charter renewals at the previous week’s SRC meeting (and continues to do so), was of particular concern. The District’s executive staff were doing a bad job convincing the public: Knudsen failed when it came to public relations.
So while Ramos lobbied Republican legislators for new union-busting powers, the PSP was talking to Craig Wallace, state director of Students First, a national “school choice” organization. Taking the lead in William Penn’s campaign to promote “school choice” in Philadelphia, PSP was also working to expand a formidable statewide network. On May 7, it assisted in the launch of PennCAN, the state affiliate of the national reform group 50CAN. PennCAN embraces privatization more explicitly than PSP does, supporting an expansion of the state’s Educational Improvement Tax Credit (EITC), a voucher-like program that pays corporations back via tax credits for private-school-tuition donations. But the organizations work hand-in-glove: PennCAN executive director Jonathan Cetel works out of PSP’s Philadelphia office. And that office is a hive of pro-charter activity, where PSP worked with the KIPP charter-school network to mobilize charter parents to support Mayor Michael Nutter’s ultimately failed effort to secure $94 million in additional school funding. PSP also contracted Bellevue Communications to place an Inquirer op-ed for executive director Mark Gleason. The op-ed, “A Silent Majority for Philadelphia School Choice,” controversially imagined what one mother he observed on the subway, presumably low income and black, might be thinking about school choice.
PSP’s board of directors, representing a who’s who of local nonprofit and corporate elites, is a potent force. It’s also a source of vast funds to be channeled toward education policy. For example, one board member is communications executive Chris Bravacos, who leads the pro-voucher REACH Alliance and Bravo Foundation. The latter is a conduit for corporate donations to EITC; a recent New York Times investigation found evidence that middlemen like Bravo coordinate private-school donations with politicians whom they also lobby.
As William Penn funds an emerging corporate education-reform network, it may soon cut funding to activist organizations critical of privatization. Philadelphia Student Union, Youth United for Change and the Education Law Center’s Cross City Campaign “were told that the type of work we have funded them to do in the past was not likely to be a focus under our new strategic plan,” William Penn spokesman Brent Thompson confirms.
Action United has already been told that it will likely not have funding renewed for its parent-organizing work in Philadelphia and schools-focused organizing in Chester.
Activists grew more alarmed in March, when Candace Bell, William Penn’s education program officer and a major player in building Philly’s community-education-organizing network, departed. “When you take the amount of money that William Penn was investing in parent and student organizing, and you take that out of the equation at a time when there is huge upheaval and change being proposed for the public schools — that is really scary,” says Action United executive director Craig Robbins. “What [Nowak’s] done is said, ‘We’re just not going to fund community organizing; we’re going to fund a consulting group.’ That’s a huge change in how you’re going to prioritize where your money goes.” Activists still hope to meet the foundation’s strategic plan’s emphasis on “closing the achievement gap for low-income children in Philadelphia.”
But “closing the achievement gap” is a nebulous term that, in corporate education-reform circles, often serves as a euphemism for expanding private management and boosting high-stakes testing. William Penn’s previous “Children, Youth and Families” grant-making area included supporting “more effective and equitable education policies.” That funding area has apparently been cut.
At a 2008 conference at the Federal Reserve Bank of Philadelphia, where Nowak chairs the board, he complained that “conventional philanthropy has been slow to respond” by getting involved in overhauling school management. That will likely not be the case at William Penn. Nowak hired Boston Consultant Group from the corporate world, instead of education researchers, because he believes that education, more than anything, needs a management fix. “It is an operations problem,” he tells CP, “more than an education problem from some perspective.”
Nowak has long had this perspective. The Reinvestment Fund (TRF), the community investment giant that Nowak co-founded in 1985, has made more than $235 million in loans to charters. Nowak served as the first board chairman at Mastery Charter Schools, whichwas involved in the Blueprint’s rollout and is poised to expand its influence over Philly schools.
The model that Nowak pioneered at TRF is now, at William Penn, set to use old money to fund a new philanthropy: a combination of the liberal foundation era’s insistence on appealing to non-ideological pragmatism to shape government policy and the conservative foundations’ skepticism of (though not outright hostility to) government in favor of the free market.
Venture capitalism has now spawned venture philanthropy — and so accountability, according to Nowak, is about measuring how grantees provide returns on the foundation’s goals instead of how they meet their own. In Philly education, that new philanthropy now has two central components: the William Penn-funded Blueprint and the Great Schools Compact, a Gates-funded program to “expand the availability and types of high-quality options and to dramatically reduce the number of chronically underperforming schools.”
An application authored by PSP, dated May 1, requested $7 million from Gates to fund the Compact and lauded William Penn’s support for what it called a “dramatic bid to increase the number of high-performing schools in the city.” Gates has so far provided $100,000 to the Compact. The initially innocuous program has since become a lightning rod for criticism. Philadelphia Federation of Teachers president Jerry Jordan calls the Compact’s “good seats” versus “bad seats” rhetoric mere subterfuge to expand the number of charters and close district schools.
Indeed, PSP’s grant application expresses a desire to give charter advocates direct control over School District operations, requesting $800,000 to fund a more charter-friendly District Charter Office. The grant says nothing about holding city charters, many of which have been under investigation for corruption and fiscal malfeasance, accountable. Notably, the grant says the Blueprint “calls for,” and not just projects, “increasing charters’ share of public-school enrollment to 40 percent by 2017.”
Philadelphia, by many accounts, desperately needs a shake-up — and some say Nowak is the one to do it. “He’s a huge personality,” says one knowledgeable source. “It’s nice, in a way, because Philadelphia lacks those people who are willing to have a fight.” Nowak is consistently described as “brilliant” and “data-driven” by Philadelphians working in journalism, government and nonprofits. He is also described as opinionated and blunt. “A straight talker,” says Congreso de Latinos Unidos chief executive Cynthia Figueroa, who spoke favorably of Nowak. “No nonsense.”
And if one measure of a man’s power is the number of people who are afraid to speak about him on the record, Nowak, in this reporter’s experience, is one of this city’s most powerful individuals.
Yet Nowak’s role could become more visible. “I think Jeremy really wants to reshape the role and the image of the organization,” says one observer. “It’s going to be a more aggressive and activist organization.” The Haas family, this observer says, is on board. “The real test over the long term is whether they’ll stay on board with what will essentially be a more in-your-face set of activities. … Up until now, the family has been viewed as being on the careful side.”
Nowak, according to sources, has a deep skepticism of government — somewhat understandable in a city and state whose lawmakers are regularly sent off to prison for corruption and where citizens suffer daily abuses of a groaning and increasingly defunded bureaucracy. And as government spending dwindles, foundations like William Penn are asked to make up the shortfall. But the dependence on foundation dollars raises difficult questions about the implications of unelected entities funding and setting priorities for core democratic institutions like education — and, crucially, for the reporters charged with holding the powerful accountable. William Penn, as most reporters but few citizens know, already funds most corners of Philly journalism.
“It’s a brave new world for journalism,” says Inquirer architecture and planning critic Inga Saffron. “It’s great that these organizations are generous, but at the same time we have to be alert to their agenda.”
David Haas, still on the William Penn board but no longer its chair, has a particular enthusiasm for journalism. Pre-Nowak, William Penn spent $2.4 million to create the Philadelphia Public Interest Information Network at Temple University, a still-in-development project that has elicited both excitement and confusion among local reporters.
Nowak, for his part, says that he puts an emphasis on game-changing investigative reporting.
Along with funding a new plan for the Delaware River waterfront, the foundation has heavily funded PlanPhilly, a journalism outfit that covered that plan, and other development and public-space issues. And it has funded — and will now defund — It’s Our Money, a joint project by WHYY and the Daily News focusing on government matters.
WHYY, which has received $1.24 million from William Penn since 2006, is an object lesson on how donors can appear to influence journalism. The Scattergood Foundation funds a beat at WHYY covering behavioral health. Three of 11 total reporters are dedicated to health and sciences, more than to state or local government; and WHYY’s Health and Science Advisory Committee includes many donors and underwriters.
Yet aside from a few shining examples — the multi-station collaboration StateImpact covering natural-gas drilling and the soon-to-be-cut It’s Our Money — WHYY does not pursue much in the way of investigative journalism. Nowak says he’s told WHYY brass that “we, meaning the foundation, like and care about deep, high-quality content.” So it’s possible that William Penn could drive WHYY to dedicate more staffers to investigative reporting.
But foundations, from William Penn in Philly to Gates on the national level, are themselves subject to little critical media coverage. A study by the conservative American Enterprise Institute, found “13 positive articles” on education-funding foundations “for every critical account.”
And Nowak’s commitment to investigative journalism has been tested when it comes to continuing support for the Notebook. At times, Nowak has criticized the paper. “I have pushed them on what I think sometimes is a lack of, you know, that they need to give multiple sides,” he says. But he insists he is not looking to shut down a critical outlet. “They’ve been something that the foundation has supported, something that the foundation is proud of. … You don’t have to agree with everything somebody does.”
Indeed, Nowak gave a long and candid interview with the education-reporting outfit the Notebook on the Boston Consulting funding and has “advocated for the Notebook with other funders,” including major national grant-makers.
The advertising revenue that was long the lifeblood of newspapers has evaporated, and government funding for core public goods like education has suffered for decades. Foundations like William Penn, to the relief of many, are stepping into this void. But Jeremy Nowak, like many Philadelphians, has an agenda — and unlike most Philadelphians, he has an enormous sum of money at his disposal with which to pursue it.
Photos by Mark Stehle