Jeremy Nowak, the president of the William Penn Foundation, has been a key player in the District's plan for dealing with its budget crisis and reorganizing its operations. The William Penn Foundation paid for the Boston Consulting Group's initial $1.4 million contract and Nowak raised additional money to keep BCG on past its five-week commitment. The Notebook asked Nowak to answer a series of questions about the plan, especially in light of the controversy it has generated. (Disclosure: The William Penn Foundation is a major funder of the Notebook.)
Notebook: Why has the William Penn Foundation decided to do this – to give money so District leadership could hire a consultant to advise it on reorganization?
Nowak: The District faced a perfect storm of crisis-level problems: a superintendent who departed under difficult circumstances, huge budget deficits, declining confidence, and decreased public resources. The new SRC chairman, Pedro Ramos, and the chief recovery officer, Tom Knudsen, realized there was an emergency and the remaining staff did not have the capacity to stop the bleeding. It was – and still is – a dire situation.
There was no other choice than to bring in a firm like Boston Consulting Group that had the expertise needed to help reduce the current year deficit as well as frame out a five-year plan that could move the District into fiscal balance.
The plan has two organizing principles: 1) a sustainable public education structure that operates inside a real budget and 2) increasing the supply of high-quality, safe schools for all students.
Notebook: What is your assessment of the plan rolled out by Tom Knudsen with BCG’s help?
Nowak: The plan is a dynamic framework with new concepts, big ideas, and core principles. It also includes a rationale and data to support a new way of delivering high-quality public education to all students. From a foundation perspective, we received a quick return on our grant investment. It brought the conversation out of the drift of financial crisis and into a much-improved vision of what is possible. We like the idea of using data to scale up the best District or charter programs, or to close down those that consistently fail.
Notebook: How involved were you personally in helping to shape it?
Nowak: It is not a completed process. I am still involved, as well as others at the William Penn Foundation. We’re invested in a big way. Closing the achievement gap for low-income children is a high priority for the foundation. I represent the foundation on the chief recovery officer’s steering committee. We meet regularly to provide input at various stages and we ask tough questions. I am not helping to develop the framework – I don’t have the specialized skills that the BCG consultants bring to this overhaul. But we are working hard to bring other investors to fund the transformation needed. We also have to answer their questions and raise their concerns.
Notebook: Which of all of the other cities that have been cited – New Orleans, Detroit, Memphis, NYC – do you see this plan being most akin to? Where do you think this kind of breakup/reorganization has worked best?
Nowak: There is not another city that has implemented a similar plan. There are concepts from other cities that have helped to inform this proposal. The School Reform Commission and the School District are looking at lessons learned and making decisions on financial data and real performance numbers. This is a unique situation that calls for a tailored structure that can work in Philadelphia.
Notebook: Do you agree with people who say that this plan means the dissolution of the School District as we know it? Is this the goal?
Nowak: No, I don’t agree with people who say that. SRC and District leaders are looking at what works well in many high-performing schools – District-run and charter-operated – and determining the most effective and efficient way to offer those options to more students. How the District does that is still being constructed. Moreover, the District has very real financial problems, many of them based on years of refusing to make tough decisions. If there are alternatives to closing a projected (cumulative) budget deficit over the next five years of more than $1 billion, then we need to hear them.
Notebook:. What do you and the others who have contributed to the reorganization planning hope the school system – the system of schools – looks like after this process?
Nowak: I may be repeating myself, but the goal is simply stated: more students in Philadelphia attending schools – District-run or charter-operated – that provide high-quality education in a safe environment. We have great expectations for what can happen if we all get involved and realize it’s a problem we all must help solve. I think we also hope that the bureaucratic inflexibilities that made it so hard to get things done are slowly eliminated. We want fiscal certainty so we do not move from crisis to crisis every few months. And we want to push as much money as possible into the classrooms in support of great teachers.
Notebook: Education cuts have been deep and broad in Pennsylvania, affecting more districts than Philadelphia. Do you think there is any role for people like yourself or the SRC to attempt to influence Gov. Corbett on the depth of education cuts?
Nowak: Our foundation does not lobby. But we certainly do fund research that provides data that can help make decisions at both a state and local level. Research that our foundation and others support clearly shows what happens to children when they are poorly served by the education system, and what happens to a state that lacks a labor force that is prepared for the future. In the past we supported some of the most important groups in the state who sought (and sometimes won) a fairer formula for the allocation of education resources. These are issues we will continue to support in the future. But we need not only money but performance and accountability.
Notebook: The budget cutting and reorganization plan inspired immediate blowback. To what and to whom do you attribute that?
Nowak: On the one hand, it is based on the fact that there is a lot of bad news here that we are all dealing with because of budget deficits. That is the truth and it is painful and blowback is natural and real. But there is another factor; the plan calls for dramatic changes in the way we organize the system, so you’d expect some resistance on that count also. Frankly, Philadelphia is not always great at dealing with change. Dramatic change must happen, though, given the demanding circumstances the District faces. To close the achievement gap for Philadelphia students, we need to get as much of the District’s funds into the classrooms as possible. Why would anyone be happy with the status quo?
Notebook: Do you think the critics have made any valid points?
Nowak: There are no easy solutions to ensure that every child gets a high-quality education. But nothing is more important to the city’s future than improving the quality of K-12 public education. We welcome the debate as long as we all offer new ideas and realistic solutions. The District is broke and broken. The system is not educating our children at the level we need it to; that’s why change must happen. After all, we are building a school district for the sake of the children, not adult interest groups.
Notebook: If BCG had been hired with public money, the contract would have been subject to right-to-know provisions. What do you say to critics who complain there isn’t enough transparency about this contract? What have you disclosed about this contract and what are you willing to disclose?
Nowak: We have been open about what we are doing. We announced our support for the BCG contract and explained that the goal was to create a more fiscally responsible way to operate the School District, one that will help close the achievement gap and result in more resources at the school level. In our initial announcement, we said we would look for additional resources. I think I was quoted as saying that “Pedro Ramos and I would go on a fundraising tour.” We also talked exclusively with the Notebook about the second phase of work with BCG and listed some of the investors, when you requested it. We understand the need for openness.
Notebook: Some of the private donors supporting the planning support charter expansion. Is it a legitimate or misplaced concern that the BCG report would reflect the interests of these donors?
Nowak: BCG is developing a number of operations, financial, facilities master planning, management structure, and human capital strategies and proposals. At the end of the day, it is up to the SRC to accept or reject any particular path they suggest. Donors that offer a few million dollars for consultation at the request of the SRC are not calling the shots at a $2.6 billion agency. Neither is the consulting firm. This is a public agency with shared governance between the mayor’s and governor’s office.
BCG’s performance should be judged—and will be judged—on the merits. They are a significant management consultant with offices all over the world. The investors in the future of our city’s public education system come to this project with various viewpoints and ideas. All of them are interested in developing credible, realistic solutions that benefit children. We take the same position with poorly performing charters as poorly performing district schools: Fix them or close them.