Association for Public Policy Analysis & Management

An empirical investigation of the relationship between philanthropic investments and student outcomes is a first step in providing vital information to policymakers and grantmakers about the overall quality of educational philanthropy and whether it incentivizes productive and efficient resource utilization. This paper examines the relationship between investments by large foundations and corporate entities on Texas charter school student accountability. Grantmakers are increasingly emphasizing investments in education, particularly in charter schools and charter management organizations, as a way to improve failing public schools in urban areas. These grantmakers frequently require organizations to provide evidence-based justification for the need for the intervention, the process of driving achievement, and the specific outcome measures they can report to determine the successes and challenges of a particular intervention. In addition, a new, more entrepreneurial form of grantmaking, venture philanthropy, focuses on targeted investments in effective interventions that organizations, mostly charter management organizations, can scale. The goal of these investments is that successful innovations will carry over into surrounding schools, including public schools, because students and parents will choose innovative charter schools over traditional educational entities. Furthermore, since many charter schools and charter management organizations rely on renewal of external funding to innovate and enhance programs, these schools have an incentive to measure effectively. Research suggests that realignment of incentives is necessary in education, since resources are currently utilized inefficiently.

To date there is one empirical investigation of philanthropy and student achievement. This look at California charter schools concludes there is effectively no correlation between philanthropy and student achievement after controlling for student demographics; however, the paper has several limitations, including methodology concerns and a narrow focus. This paper utilizes student achievement data from the Texas Education Agency and philanthropic data from the Foundation Center Foundation Maps tool. Results from this analysis indicate that philanthropy has a moderate relationship with increasing reading achievement and no significant effects on mathematics or comprehensive achievement, controlling for student demographics and school characteristics over a three year timeframe.