William Penn Foundation donating $1.5 million for Phila. School District restructuring

The William Penn Foundation is donating $1.5 million to help restructure the Philadelphia School District, and officials said Wednesday they thought the move could bring more funds from the philanthropic and nonprofit sectors.

The money would go directly to pay for what is regarded as a much-needed management consultant, William Penn president Jeremy Nowak said Wednesday.

Nowak also said the foundation would help the School Reform Commission identify other private funders to help turn the district around.

School Reform Commission Chairman Pedro Ramos "and I are going on a fund-raising tour to see if we can be helpful," Nowak said in an interview. "I think this is a defining moment for the city of Philadelphia."

For William Penn, the $1.5 million appears to be just the start.

"We want to be part of the action. I think we're going to partner more," Nowak said. "It won't be operating money - we can't fill that public hole - but closing the achievement gap for low-income kids is going to be a major organizing principle of the foundation going forward."

Beyond the foundation's own contribution, the move is significant because Philadelphia's philanthropic community has traditionally been loath to donate on a large scale to the district, which was viewed by many as a bad risk, with management and finance problems and a lack of transparency in operations.

This year, William Penn itself pulled $1 million from the district because of concerns about financial management.

Before extending its new offer to the SRC - which has been almost completely reconstituted since September - the foundation "waited to see whether they were going to make moves that we thought were smart," Nowak said.

"We see that they are making moves that are smart, and so we're going to take that risk," he said. "This new SRC has shown us that they're serious about the future."

The district is in dire straits. Officials admit it is on the brink of insolvency, with a $38.8 million budget shortfall to bridge by June and a more-than-$269-million gap for fiscal 2013. But they say they can right the system, and want to use this opportunity to restructure how schools are run, with more autonomy for principals and less bureaucracy.

William Penn liked the SRC's hiring of Thomas Knudsen, the former Philadelphia Gas Works head, who was brought in as "chief recovery officer" on a short-term basis. It also liked the hiring of Boston Consulting Group Inc., Nowak said. The national management consulting firm has extensive experience working with troubled school systems.

The SRC last week approved the one-month Boston contract, which will pay for "professional managerial and financial consulting services and expenses." William Penn and the United Way of Southeastern Pennsylvania will work together with the SRC to "structure and manage" the Boston contract and work.

Nowak said that William Penn - and other potential funders - will have some say in the turnaround efforts.

"I'd like to have input, but I'm not mandating they go in this direction or that direction," he said.

The SRC has been clear that it means to "decentralize" its operations, ripping up a bureaucracy that's been in place for decades and giving schools much more say over how they are run.

And it has also said that it wants a new superintendent comfortable with managing a "portfolio" of schools - both traditional district schools and a network of charter schools.

School leaders have committed to continue to explore non-district school options with their participation in the "Great Schools Compact," which promises that Philadelphia will move to eliminate 50,000 seats in low-performing schools in five years.

Nowak has firsthand experience with charters. For seven years, he was president of Mastery Charter Schools' board of trustees. He was particularly impressed, he said, with Mastery's turnarounds - taking tough existing district schools and keeping their students, but hiring new staffs and putting new policies in place.

"What came out of that for me was a belief that it was possible to close the achievement gap and bring violence levels down in a few years in some of these schools," he said.

Nowak said he also supported expanding district schools that work and closing bad charters.

Even with what he believes is a strong SRC in place, William Penn is still taking a risk, Nowak acknowledged.

"The biggest risk is, will they will be able to come out with a plan, and will they be able to implement the plan that gets us to where we want to get to? And will they be able to implement it, given the complexity of the politics of education?" Nowak said.

But it's necessary, he said.

"I know the word turnaround is a loaded thing, but I think we're at a place where we can all agree we've hit rock bottom in terms of information, financial capacity, and, to some extent, faith in the future," Nowak said.

Mayor Nutter, in a statement, praised the foundation's involvement.

"Their leadership and partnership tells me that as a city, we are ready to take on the hard collective work of increasing high-performing options for our students and ensuring the School District is the most effective organization it can be," the mayor said.

Ramos, in the statement, agreed.

"We know the difficulties in front of us, and we are hopeful that with help from the private sector, philanthropy, and civil society, we can begin to see real progress," Ramos said.

Gerald Wright, a founder of Parents United for Public Education, said William Penn's involvement was "good news" in that the district will not have to cover the cost of the Boston contract.

But he has concerns about the speed with which the restructuring is happening.

"I don't think there's been enough public discussion," said Wright, who has two children in district schools. "Certainly, there hasn't been community discussion, parent discussion led by SRC members, where we really talk about where we want to go."