Millot: RTTT, I3 Probably Won't Change School Reform's Supply Side

I am not an edwonk, although I play one on TWIE. I earn my living selling market information and advising on strategy. This month marks the seventh year I've been providing clients of K-12Leads and Youth Service Markets Report with grant and contract RFPs. Last week Alexander asked for my views on how the federal Race to the Top (RTTT) competitive grant program might affect the organizations providing products and services to improve public schools. I received a similar request from an education reporter, who also asked about Investing in Innovation (I3).

Behind each request lies the question "are you seeing anything new or, do you expect to?"  The answer is "probably, no." That would be fine if this administration had an "industrial policy" for the supply-side of school reform likely to bring "what works" to market. It doesn't now. RTTT and I3 will provide much-needed revenues to firms and nonprofits facing tight state and local education budgets. But the mix of products and services won't change much. There won't be any new entrants or vast changes in market share. The quality we will have when the grant programs are implemented looks to be the quality we have now. 

Federal RTTT funds will find their way to for- and nonprofit providers via the winning states' competitive bidding processes. I have heard that the new philanthropy's grantees have been trying to get written into states' RTTT applications. My view is that this would violate federal requirements on procurement via a bidding process, but its probably unattractive because it also ties the states' hands on their spending without adding much to an application' competitive weight. 

RTTT reinforces current spending patterns on school improvement.  Much of the money for assessments and data will end up with the firms already engaged by states and districts. Given budget pressures on state and local education agencies, I expect more teacher support money going to in-house agency staff than outside support; with just enough of a pass-through to universities for professional development (PD) content to satisfy the Feds. It will take a fair amount of marketing for for- or nonprofit PD providers to gain a significant share; I expect their emphasis will be on using RTTT to remain in place ("same monkeys, different (funding) trees").

In the turn-around arena, CMOs, EMOs, Comprehensive School Reform providers and targeted/individualized curricular programs may have a better shot at work under laws revised by the states to improve their application, but I don't see structural changes that make it much easier for states or districts to employ the option than in the past. New charter statutes and modifications of existing laws aimed at buying a few points from reviewers are likely to result in marginal market changes for similar reasons. The idea of working across education, youth and health agencies is great  - every application will say something positive, but I don't see a material change in spending on the relevant good and services. Yes, there will be some states and districts that do something innovative, creating real options for the future, but not the  extensive, deep and long-lived changes intended by the administration. RTTT is a typical federal educational grants program reflecting the fads that enthrall this new Administration.

I3 is confined to nonprofits and so it does fence off a defined segment of federal funding from for-profit competition. Access to these funds is probably the difference between the slow demise of new philanthropy investments - especially the charter management and teacher development organizations - and their survival. This matter turns on the extent to which evidence of efficacy must be based on criteria employed by the What Works Clearinghouse or something closer to the "based on" rules that guided Reading First. The former probably dooms the new philanthropy strategy. The latter gives it ten more years. My bet leans to a very lax approach to evidence - notwithstanding statutory language to the contrary. Aside from this problem, the key challenge here will be assuring that the "sustainability" aspect of grant decision making gets as much attention as "scale." (Financially unsustainable nonprofits simply perpetuate the tendency of school improvement towards trendy reforms over the hard slog of proving what works.) Still, sustainability will depend more on the real intent and capacity of applicants' management teams than on the ability of the grant reviewers to distinguish "sh-- from shinola."

My own view is that RTTT and I3 are poor "industrial policy" for the market in school improvement services. By establishing a system of state academic standards, progress requirements for schools and districts, consequences for failure, and a focus on improvement programs driven by research (albeit poorly defined), NCLB created a market driven by demand to improve student performance - with an emphasis on what works (albeit poorly implemented), to avoid a great deal of pain. By contrast, RTTT and I3 are based on an assumption that particular kinds of strategies will improve performance, and this administration has a predilection for certain program offerings backed by the new philanthropy. I trust the long-term output of markets over a never-ending cascade of new technocrats.

No doubt public education needs the money in RTTT and I3 for school improvement. No doubt school improvement providers need the revenues. This is just a top-down solution to a bottom-up problem. Districts need the outside support of research "proven" products and services. If they could develop these offerings themselves they would have by now.  So I have no problem fencing off federal funds that might otherwise go to local staff. But, I would have much preferred block grants that could only be spent on school improvement programs, and only on providers and offerings with some kind of a record of efficacy based on say, the What Works Clearinghouse. Given an extension of NCLB something like what we have now (a big if), this would let schools and districts decide what they need. To paraphrase the charter refrain, a federal block grant initiative would give public education the autonomy and funding that ought to go with NCLB's accountability for results. And it would be more likely to give us the school improvement industry we need than the one the Department has decided we should have.