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Foundation still raising funds to keep BCG

by Dale Mezzacappa on Jun 06 2012 Posted in Latest news

The William Penn Foundation is trying to raise more money so the Boston Consulting Group can continue working with the School District on its budget and transformation blueprint. The foundation's leader said that the company’s expertise is essential – despite continued community hostility to the arrangement.

“I am still speaking to others about helping to keep [BCG] until we have more capacity within the District to run operations,” said William Penn president Jeremy Nowak.

So far, the foundation has raised $2.7 million for outside consulting for Chief Recovery Officer Thomas Knudsen and the School Reform Commission, almost all of which has gone to BCG. But that money is about to run out, Nowak said.

William Penn itself has been the largest donor at $1.45 million, which paid for five weeks of work. Nowak said he raised another $1.2 million from six organizations and individuals.

The United Way of Southeastern Pennsylvania, which serves as a fiscal conduit for donations to support BCG's work, disclosed the amounts of some of the contributions Tuesday, in response to an inquiry from the Notebook two weeks earlier:

PSP executive director Mark Gleason declined to identify the donor or donors who gave funds for the purpose of supporting BCG, but said that his organization may contribute more in the future.

“The board has authorized more if we feel the need is there and the conditions are right,” wrote Gleason in an email. “We are raising funds for this purpose, yes, but are not in a position to reveal the donors at this time.”

O’Neill, the largest identified individual donor to the effort, was one of the prime movers behind the formation of PSP and has been a generous donor to Catholic schools.

The total from Vanguard and the anonymous donor is $275,000; Vanguard’s company policy is not to disclose contribution amounts.

All of the $1.2 million is being directed to BCG through the United Way.

United Way president Jill Michal said the organization’s role is limited to being the “fiscal agent, ” noting that her organization agreed to play this role and contribute funds because it is important to help the District figure out its future direction.

“This is an organization in tremendous need of a real business plan and assistance in trying to develop a long-term strategy and get out of the flavor-of-the-month reform mode,” said Michal.

“In many organizations, sometimes you need outside eyes to help you do that, to step away from work you’re in and look at things that have worked or failed on a national level.”

But while the United Way is paying BCG, the company’s “scope of services” is being supervised through William Penn, said Michal.

Nowak has said that he is part of a steering committee advising Knudsen.

Donors are “happy with the quality of [BCG’s] work,” wrote Nowak in an email.

SRC chairman Pedro Ramos has credited BCG with bringing back the District, which needed to close a $700 million budget gap this year, “from the brink of insolvency.”

The SRC had a contract with BCG for the first five weeks, but there is nothing in writing regarding its continued work.

Ramos dismissed any concerns about that arrangement.

“What we're getting is support, which is not the same thing as control,” he said.

“We have lots of in-kind support all the time, we have pro bono help sometimes, we have people volunteering on all types of activity. This is something that's funded by philanthropy to support the District, and it's provided a capacity that the District wouldn't have otherwise had in the last six months.”

The blueprint unveiled by Knudsen, which would divide the District into “achievement networks” run by outside entities and close 64 schools over five years, has run into stiff opposition. Plans to pilot one of the networks next year have been postponed, and the District says it is seeking more public input before proceeding with that portion of its plan.

At last week’s contentious School Reform Commission meeting, Ramos responded to persistent questioning during public testimony by saying the District would release a “work product” from BCG in the next few weeks.

Most of BCG’s work to date, Ramos said, has been “supporting our CRO in stopping this School District from going insolvent because of the actions that were taken in the past by folks who wanted to give you what you wanted to hear instead of taking the actions they should have taken.”

Disclosures: The William Penn Foundation is a major funder of the Notebook. The Notebook is working with the Philadelphia School Partnership on a new initiative to provide more information to parents about city schools.

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Comments (26)

Submitted by Ken Derstine on Wed, 06/06/2012 - 19:11.

Why all the secrecy about who the donors are? Why must they hide? Are they still telling us we have a democracy?

Submitted by A Touch of Sense (not verified) on Wed, 06/06/2012 - 19:31.

This is a prime example of everything that is wrong with the privatization of our public schools. What is amazing is that these people are so audacious that they do not even see what is wrong with what they are doing.

You are intentionally and purposefully circumventing the democratic process of our public schools.

At least Edison had the integrity to write a report of their findings, recommendations and rationale for their recommendations. If I may repeat what the good Pastor said the other night. "We do not trust you."

You are trying to ram through your privatization agenda which has worked nowhere in America.

There is only one reason for secrecy -- wrongdoing.

What you guys are showing is your leadership incompetence. And you want to run our school system?

Submitted by Anonymous (not verified) on Thu, 06/07/2012 - 19:39.

They SEE it. They just don't care.

Submitted by Ken Derstine on Wed, 06/06/2012 - 19:33.

Quote: "Most of BCG’s work to date, said Ramos, has been “supporting our CRO in stopping this School District from going insolvent because of the actions that were taken in the past by folks who wanted to give you what you wanted to hear instead of taking the actions they should have taken.”

Ramos said the same thing at the SRC meeting last week and the audience erupted in outrage. We did NOT ask the previous SRC to spend the stimulus money on Promise Academies, Renaissance Schools, and charter schools! We did NOT tell the previous SRC to make no bid contracts with friends of members of the SRC. We did NOT tell the previous SRC to give Universal two schools rent free! We did NOT tell the current SRC to give Universal three schools at $500,000 next year when the bill is almost $2 million. We did NOT tell the current SRC to buy out Ackerman's contract for $1 million. I could go on!

We are also aware that Corbett, who Ramos has made it very clear he works for, cut this year's budget for PSD by $300 million and at the same time allocated $700 million for prisons including three new for profit (i.e. slave labor) privately owned prisons. We are also aware that Corbett has made an agreement to give Royal Dutch Shell (who made $31 billion in profits last year) $1.7 billion in tax breaks over the next 25 years to extract profit from Pennsylvania's natural gas.

So whose actions are making us insolvent again?

Submitted by A Touch of Sense (not verified) on Wed, 06/06/2012 - 19:50.

Extra! Extra! Read all about it! School District for sale in Philadelphia.

Highest bid in a darkened room gets the prize -- unlimited profits.

Everybody with power and influence and money gets to play! Money for all who play the game!

Go to Philadelphia from places afar. Tell them you know what is best for their children. Tell them you care so much -- and take your cut. It is so easy.

Let the children bring their own crayons....

Extra! Extra! Read all about it.

Submitted by Education Grad Student (not verified) on Wed, 06/06/2012 - 20:15.

My issue with Boston Consulting Group is that it doesn't even state education as being one of its areas of expertise (See They have public sector on there, but the public sector is very diverse. BCG describes itself as "a global management consulting firm and the world's leading advisor on business strategy" (See

There's nothing wrong with applying business principles to make the public sector more efficient and cost-effective. What is problematic is allowing the private sector to run public education as though public education is a business. Public education is NOT a business! When private operators or public entities run public education as a business or in accordance with markets (such as the SRC and SDP seem very happy to do), these market incentives can butt heads with legal obligations. I made a comment about this relating to the situation of students with disabilities in New Orleans, based on a case study which I read. I included excerpts from this case study article. (My comment is here, comment date 5/27/2012:

Here's a relevant excerpt (verbatim) from the case study as well as the case study's citation:

"In addition to the requirement of positive academic outcomes, charter schools were also motivated to provide education economically. As noted by Carr in January 2008,
Part of the issue comes down to money. Providing strong special education services is not always financially advantageous—or even feasible—for charter schools. While a typical urban school system might have a special education administrator who oversees services for 6,000 students, for instance, a typical charter school might have 60 special education students, but would still need an administrator who knows the technicalities of complicated special education laws. Schools that are individually run can’t take advantage of the economies of scale present in larger school systems. (p. 1)
Functionally, the charter system has been disincentivized to include difficult and costly students. These schools are driven by market forces to reduce overhead (Berger, 2007; Simon, 2007). Understandably, charters were not anxious to hire special education staff who were not yet needed. However, a condition of their chartering agreement was the commitment to provide appropriate services to any child accepted and enrolled. Once again, the issue of IDEA knowledge was visible. When schools consider students with special education needs financial liabilities, a moral as well as legal issue arises. An administrator from RSD commented, “For a small charter, two kids with significant disabilities could sink them financially. . . . It would be the perfect storm.”
Considering the academic and financial contingencies charter schools faced, it was understandable that they would be apprehensive to welcome students who were not achieving academically who might require costly support services. Of course, these contingencies are in direct conflict with the legal rights of students. Where does this leave charter schools? They seem to be caught on a precarious point of economic constraints and legal requirements. These complex issues needed to have been considered prior to the wholesale spread of charters in New Orleans" (p. 388).

Wolf, N. L. (2011). A Case Study Comparison of Charter and Traditional Schools in New Orleans Recovery School District: Selection Criteria and Service Provision for Students With Disabilities. Remedial and Special Education 32(5), 382–392. (Nikki L. Wolf, the author, is a professor at the University of Kansas.)

Submitted by Education Grad Student (not verified) on Wed, 06/06/2012 - 20:18.

Also, here's one of my comments on Helen Gym's piece "Commentary: Put the Boston Consulting Group where it belongs - before the public," from the Notebook ( This comment applies to the present article as well:

Helen is 100% correct in her criticism of the privatization of the school transformation plan. Like the recent facilities plan to close schools, the process needs for transforming the District needs to be PUBLIC! These are publicly-funded schools, for the most part. An organization with the best interest of the children and families which the District serves in mind would OPEN the plan up for public comment. Why? Because public comment and the involvement of parents, students, and school personnel who know the issues at each school will allow for the fine-tuning and improvement of the plan.

The William Penn Foundation has an obligation to the public to make the process more transparent because transparency promotes the common good for everyone involved with the District. In addition, transparency creates more "buy-in" from families and employees in the District because they feel that they have a voice. Creating the new transformation in private makes people feel disempowered and, as a result, will be more resistant and hostile to the new plan. We are supposed to live in a DEMOCRACY! One purpose of public schools is to model the democratic process for our youngest citizens. This newest transformation plan is fundamentally undemocratic because people with power and money determine the process instead of members of the public. This kind of process has no place in our public schools, especially for a transformation plan with so many implications for so many people.

Submitted by Anonymous (not verified) on Wed, 06/06/2012 - 20:55.

I hate to hurt your feelings but they don't give a rat's ass about the kids, the parents, the teachers and democracy no matter how large you write it. They care about how much money they can make off the backs of the kids, first, last and only. They are so bold to show their corruption-----Gamble getting 2 million freebies----without even an ounce of embarrassment. They just don't care and of course, Corbett and here it comes, Obama, are letting them do it.

Submitted by Education Grad Student (not verified) on Tue, 06/12/2012 - 12:25.

You're not hurting my feelings at all. And I realize that some of them don't care. If all they care about is money, they shouldn't be in education.

Submitted by Mark (not verified) on Tue, 06/12/2012 - 13:12.

Not one of them runs a charter school in the traditional and genesis sense of the words, Charter School. They ALL run their schools as a business model, making as much money as they can without having to pay overhead or staff. Is it any surprise that they're anti union. Their workers have no rights at all--ZERO. Charters are killers for Middle Class people who have the audacity to expect, respect and a certain measure of tenure. This is dangerous stuff all the way around and all clear thinking people need to be VERY careful or the clocks will be soon turned back 125 years. DON"T say, it can't happen !!!! The corporations would do it in a heartbeat if they could.

Submitted by Anonymous (not verified) on Wed, 06/06/2012 - 20:56.

First William Penn, and now the United Way--silly me for having faith in either of these organizations. Nowack's quote says it all Donors are “happy with the quality of [BCG’s] work,” wrote Nowak in an email. WHO CARES IF THE DONORS ARE HAPPY. Where is the public in this process, I've paid taxes for 10 years, and I haven't been happy but as a taxpayer I believe it's out obligation to hold organizations accountable. The William Penn foundation and the United Way should be funding pilots to better understand how we can transparently bring private dollars into public institutions. William Penn nor United Way are living up to their missions. One person, in charge the purse strings, and therefore our public system is a disaster waiting to happen. I won't even begin to comment on Jill's remarks that the United Way is not supervising...they donated 75k along with the cesspool of rich and naive donors over at Philadelphia Schools Partnership. Guess who won't be getting my donations this year?

Submitted by Anonymous (not verified) on Wed, 06/06/2012 - 20:57.

Shame on the United Way and the William Penn Foundation. Where is their board of directors to come in and reclaim the name these organizations have worked for.

Submitted by Anonymous (not verified) on Wed, 06/06/2012 - 21:02.

Glad to know democracy works. What is Jill talking about..this model is not based off of any research anywhere and it won't save any money.
Shame on the United Way.

Submitted by Anonymous (not verified) on Wed, 06/06/2012 - 21:04.

Dear Ramos, In kind donations for projects etc. is not the same as an in-kind donation to break up the entire school district. Maybe you should shut up about this so called pro bono work and head to Harrisburg to talk to your boss---oh wait. . .

Submitted by Anonymous (not verified) on Wed, 06/06/2012 - 21:15.

The Lenfests need to go back to the telecom industry and leave educating to educators.

And when will the state be held accountable for the disaster they caused? It's not like the SRC was forced upon us to prevent fiscal problems, right?

Submitted by Anonymous (not verified) on Thu, 06/07/2012 - 12:05.

Michael O'Neill is co-founder of the Philadelphia School Partnership and is on the board of directors, in addition he sits on the Board of Mastery Charter Schools and is Chairman of their High Tech High Foundation (What Mastery Lenfest was formally named). Between the Philadelphia School Partnership, Michael O'Neill and the Lenfest Foundation, Mastery is responsible for 750,000. Wow, couldn't possibly be any hidden agenda there.

Submitted by Anonymous (not verified) on Sun, 06/10/2012 - 09:38.

Take a look at the management team for Mike O'Neill's company. Where are the women? Where are the African Americans?

Submitted by anon (not verified) on Thu, 06/07/2012 - 16:35.

gee jill michal. thanks for being so helpful & concerned, “This is an organization in tremendous need of a real business plan and assistance in trying to develop a long-term strategy and get out of the flavor-of-the-month reform mode,” said Michal.
“In many organizations, sometimes you need outside eyes to help you do that, to step away from work you’re in and look at things that have worked or failed on a national level.”

better stick to your knitting (fundraising) & stay out of the politics end of privatizing education. you're swimming with the sharks.

Submitted by anon (not verified) on Thu, 06/07/2012 - 16:40.

Nowak has said that he is part of a steering committee advising Knudsen.
Donors are “happy with the quality of [BCG’s] work,” wrote Nowak in an email.

now isn't that special.
it just tugs at the heartstrings the way these people want to help our urban kids. and here we thought they didn't care.

Submitted by Anonymous (not verified) on Thu, 06/07/2012 - 19:38.

Yes, it's enough to make a cat laugh. Worst part is the condescending way, Knudsen speaks as if we're all dumb as dirt. What a con man he is and not enough good at it. Makes me want to throw shoes at him.

Submitted by Joseph.P on Fri, 06/08/2012 - 07:41.

It sounds like there is some positive news happening here for the future. That is really a lot of money but yet at the same time there is still so much more that needs to be raised.


    Learning how to signup for schools through the United Way is not as easy as what some people would think it could be since they are such a big name.

Submitted by Bekim (not verified) on Fri, 06/08/2012 - 19:26.

Please help support our sdp run School, and sign our petition, Thanks.

Submitted by Anonymous (not verified) on Mon, 06/11/2012 - 20:25.

At the same time some people still say that this SRC is transparent and listening to the people of this community, all of the evidence says otherwise.

Imagine the amount of secrecy which will become the norm in the district should Knudsen and BCG have their way. With the "lean central office" Knudsen recommends, who will ever know what is going on in a decentralized district?

Submitted by Mark (not verified) on Tue, 06/12/2012 - 13:19.

Knudsen behaves like a bully and we all know what bullies need in a big way. Corbett forced this draconian budget on us and the SRC should ALL be screaming about it, NOT trying to end unions and foist Charters everywhere. If they had any credibility, they would all resign in protest to Corbett. Instead, they skulk around like snakes trying to sell us out. Pedro has been disgraceful but not nearly so disgusting as Obama.

Submitted by Ken Derstine on Tue, 06/12/2012 - 13:45.

Three of the SRC members were appointed by the Governor, two by the Mayor. Ramos said right out last week at the meeting with State Representatives from Philadelphia, "I work for the Governor." Whatever happened to public servants working for the people?

Submitted by Anonymous (not verified) on Tue, 06/12/2012 - 14:56.

Pedro is beyond despicable and I posted that Houston was here as a mouthpiece for Corbett. I was told to give her a chance. Chance, my ass !!

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