February 22 — 5:45 pm, 2012

Foundation to pay for District consultant

by Benjamin Herold
for the Notebook/WHYY’s NewsWorks 

The William Penn Foundation will be picking up the $1.4 million tab for the five-week contract for an outside management consultant approved last week by the School Reform Commission. 

"This is a defining moment for our schools," said WPF President Jeremy Nowak in a statement. "To close the achievement gap for Philadelphia’s students, we need to get as much of the District’s funds into the classroom as possible. Moreover, we must be able to trust the financial projections and long term operations of the system."

The money will be used to pay the Boston Consulting Group (BCG) to help the SRC and District leadership identify and implement millions of dollars in budget cuts this year, reorganize the District’s central office, and come up with a plan to decentralize some District functions and give individual schools more decision-making power. The goal is to stabilize a District that has been teetering on the edge of financial collapse.

"This is a genuine crisis moment," said Nowak. "Our foundation cares about closing the achievement gap for low income children. We cannot do that if we do not have a functioning district.”

He said that WPF decided to help because of the scope of the District’s need, the lack of viable alternatives, and to avoid a potential backlash over the possibility of the District shelling out millions in public dollars to pay for consultants while simultaneously cutting school nurses, police officers, and other school essentials.

"We don’t see money coming in from the public sector," said Nowak.

He described BCG as a "world-class" consulting firm with extensive experience working with troubled school systems. He said it will examine “every academic and non-academic practice and built an analysis of the current state and options (including cost-savings options) for the future."

"We have tough decisions to make in order to save the District," he said. "We don’t have much time."

In January, the SRC said that unless $61 million in cuts were identified by June, the District would not be able to meet payroll. Earlier this month, the District announced that the gap had actually risen to $71 million and that $39 million of those cuts remained to be identified.  

The District must also develop its budget for next year; the SRC is already projecting a shortfall of $269 million that will require further belt-tightening.

Nowak said that WPF will be helping the SRC to identify additional sources of funding, including other philanthropies, and that he intends to have some say in the organizational restructuring that BCG will be leading.

"I intend to stay actively involved to ensure that we get the value we are all paying for," said Nowak.

Mayor Nutter and SRC Chairman Pedro Ramos praised the move in a statement.

"The William Penn Foundation has always been here for the city of Philadelphia and its children; there is no stronger advocate for reform and transparency," said the mayor.

William Penn has historically funded a wide range of organizations involved in education reform in the region, including the Notebook. Most of these organizations work from the outside to improve schools and change the District.

The details of how the money will be transmitted to the District are still to be worked out. The United Way of Southeastern Pennsylvania is expected to be involved as a third-party to facilitate the transfer of funds.

Disclosure: The William Penn Foundation is a major funder of the Notebook.

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