July 24 — 7:00 am, 2012

William Penn Foundation bankrolling $160,000 communications campaign for District

By Benjamin Herold for the Notebook/NewsWorks

The William Penn Foundation has paid more than  $160,000 for work being done by two private communications firms to support the School Reform Commission’s much-debated  “transformation blueprint.”

It’s just one of several efforts undertaken by the city’s civic leaders on behalf of the cash-strapped District that was revealed by a review of William Penn’s recent grants.

The organizations doing the communications work, Sage Communications and the Bravo Group, are being paid through William Penn funds that have been passed through the United Way of Southeastern Pennsylvania and the Greater Philadelphia Chamber of Commerce, respectively.  Each grant was for $82,500, the maximum allowable without the approval of William Penn’s board, which meets three times a year.

“We funded people to work with the District to tell their story,” said William Penn Foundation president Jeremy Nowak in an interview Thursday.

To date, said Nowak, the total paid by William Penn for communications efforts “would be in the hundred-and-sixty to hundred-and-eighty thousand dollar range.”

In a separate effort, the Bravo Group also worked under a direct contract with the Chamber to lobby state officials on issues of concern to the SRC — including help facilitating the massive borrowing the District plans in order to help close a $282 million budget gap for this fiscal year. 

"It was lobbying for the Chamber, which has an ongoing interest in our not going insolvent," stressed SRC Chairman Pedro Ramos.

And in a third instance of the complicated web of relationships between the District and the city’s civic sector, William Penn also gave the United Way a separate pot of $82,500 this spring.

That money, it turns out, was used to help staff a previously undisclosed “ethics task force” that is preparing recommendations for the SRC that are expected to be made public this fall.

It’s all part of the brave new world created by a struggling School District that must rely on outside help to navigate its seemingly endless financial crisis.

In April, the SRC unveiled a controversial proposal to overhaul the cash-strapped District by closing more than 60 schools and reorganizing those left into independent “achievement networks,” some of which would be privately managed. The “blueprint,” developed with heavy input from outside management consultants from the Boston Consulting Group (BCG), has generated fierce opposition from organized labor and some student, parent, and community groups.

William Penn directly contributed $1.5 million and helped raise at least $1.2 million more to support BCG’s work.  All that money was also passed through the United Way. A report summarizing the blue-chip consulting firm’s analyses and recommendations is expected to be made public later this week. 

Details of William Penn’s financial support for related communications support and other efforts had not been previously disclosed. Because the District is not a party in the contracts, the School Reform Commission did not have to publicly vote to approve the work.

Ramos defended the use of outside communications support, citing the sharply reduced capacity of the District’s internal communications office and the complexity of the District’s budget problems and restructuring proposals.

“The District [has been] in a crisis, trying to act with urgency to solve problems,” he said.

“In the process of acting with urgency, we were not effectively communicating how [the proposed reforms] are about getting resources to students.”

‘Not unusual at all’

The pass-through grant to the United Way for Sage Communications was made in early April of this year. Sage co-founder and partner Sharon Gallagher said her firm was nearing completion of a far-ranging scope of work.

“We’ll be wrapping up within the week,” Gallagher said.

Sage’s job, she said, was “pretty much to try to explain the role of BCG.”  It involved “a little bit of everything,” including strategic planning, writing press releases, communicating with City Council during budget hearings, and help with the release of the “transformation blueprint.”

Though William Penn was the original source of payment for Sage’s work, said Gallagher, the firm submitted its invoices to the United Way and was directed in its day-to-day work by District Chief of Communications Fernando Gallard, SRC Chief of Staff Loree Jones, and by Andrew Rachlin, chief of staff to District Chief Recovery Officer Thomas Knudsen.

Gallagher said the arrangement was “not unusual at all” for her firm, which works primarily with foundations and nonprofit organizations.

“Foundations always hire outside communications firms to work with [their] grantees,” Gallagher said.

In contrast to Sage, the Bravo Group works with a wide range of clients, including large corporations. The firm also engages in lobbying and government relations work, helping businesses and organizations to “establish ties to – and deal effectively with – policymakers at all levels of government,” according to the group’s website.

Whereas Sage primarily provided “day-to-day help,” said Ramos, the Bravo Group will serve as a “resource for advice and strategy.”

The Bravo Group’s William Penn-funded work has been to "support the communications effort for the District," said Chris Bravacos, the firm’s president and CEO.

But the Bravo Group also worked during May and June of this year to lobby "on behalf of issues the Chamber cared about for the SRC and the School District," he said.

That included help with the state building authority, from whom the District hopes to borrow over $200 million dollars this year so it can balance its budget. It also worked with state legislators around a provision of then-pending charter school legislation that would have "wreaked havoc" on the District’s finances, said Ramos.

A spokesman for William Penn stressed that the foundation is not supporting any lobbying efforts, which are specifically forbidden in its grants. 

Bravacos is a board member of the Philadelphia School Partnership, which recently received a $15 million grant from William Penn.  A prominent political lobbyist and fundraiser, he formerly served as the executive director of the Republican State Committee of Pennsylvania and as deputy secretary for legislative affairs under former Gov. Tom Ridge.

The pass-through grant to the Greater Philadelphia Chamber of Commerce Regional Foundation for the Bravo Group was made at the end of June. 

William Penn’s Nowak stressed that he is not overseeing the communications work for which his foundation is paying.

“I make sure it’s accountable the way that somebody that oversees a contract would because it’s our money there.  But we do not direct the work,” said Nowak. 

In a cover story earlier this month, the Philadelphia City Paper portrayed Nowak as the driving force in a coordinated effort to dismantle the District, citing a May meeting involving Nowak, Ramos, Gallagher of Sage Communications, and unnamed “pro-charter-school activists” to discuss a media plan in support of the District’s “transformation blueprint.”

In interviews for this story, Nowak, Ramos and Gallagher all confirmed their participation in a meeting like the one described in City Paper. Nowak said he could not recall everyone who was in attendance, while Ramos would say only that he “didn’t necessarily know everyone who was going to be there in advance.”

Ramos, Nowak and Gallagher all disputed City Paper’s characterization of the meeting as part of an orchestrated behind-the-scenes campaign.

“It’s a fantasy,” said Ramos.

“The reality is [we’re] managing a crisis.  You’re asking for help and collaboration and trying to get any support you can when you need it, and that’s what gets lost here.”

A new ethics task force

In addition to receiving communications support from outside firms, the District has also been the indirect beneficiary of a third grant made by William Penn in recent months. 

At the end of June, the foundation gave the United Way $82,500 to support the work of United Way associate vice president for education Diane Castelbuono. A former state deputy secretary for elementary and secondary education and the former associate superintendent in charge of the District’s charter and turnaround schools, Castelbuono has been staffing a previously undisclosed “ethics task force” working on behalf of the District and SRC.

“It’s looking at all of the [ethics-related] policies, processes and procedures” in the District, said United Way of Southeastern Pennsylvania president and CEO Jill Michal.

The nine-person task force, which is being chaired by Philadelphia Court of Common Pleas Judge Ida K. Chen, was initiated in response to a request from SRC Chairman Ramos.

“I thought it should be an independent effort,” said Ramos, who stressed that the task force is not setting policy.

“They’ll come, present findings and proposals, and it becomes a [public] policy process from there,” he said.

The group’s report is expected to be made public in September or October.

The William Penn grant to the United Way for Castelbuono’s time is also retroactively paying for her work to coordinate the community engagement effort surrounding the SRC’s recently completed search for a new superintendent.

Despite concerns from some that the flurry of outside support is giving third parties undue influence over the future of the District, Ramos said he would remain committed to re-engaging leaders from Philadelphia’s philanthropic, business and civic communities who have been turned off by the District’s recent woes.

“I’m going to do everything I can to rebuild those relationships on behalf of the School District,” said Ramos, “and I’m not going to apologize for it.”

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

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