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The Broad Way

Billionaire Eli Broad shares his take on schools in America.

In the world of corporate philanthropy, there are those who give to educational causes. And then there is Eli Broad.

He is in a category unto himself not only because of the amount of money he has given-more than $280 million since 1999 - but also for his unique educational philosophy. Broad approaches his philanthropy with the same business mentality he used to start two Fortune 500 companies: Kaufman & Broad (now KB Home) and SunAmerica.

"We want a return on our investment. The return we want is greater student achievement," he says of the Broad Foundation, which he founded and runs from Los Angeles, where he lives. The grant-making Broad Foundation's mission is to dramatically improve K12 urban public education through better governance, management and labor relations.

Broad, 74, is not a philanthropist who just cuts checks. He not only wants to support public education but to transform it - to bring into the world of urban public education the best practices of management and governance used in business.

Broad (which rhymes with "load") says the current urban public education system is failing inner-city kids due to short-sighted school board members, ill-prepared superintendents, and a lack of knowledge of sound business practices. "Top-down decision-making," which is emphasized in corporate structures, is part of the solution to the country's educational woes, he says.

When the Broad Foundation began, "no one was looking from the top down," Broad says. "Everyone was looking at what's happening in the classroom - which is very important - to try to find the silver bullet to change things," he says. "I say let's look at governance."

In the Beginning

After studying school boards and superintendents across America, Broad says he and his team of experts were "rather disappointed." Most superintendents start as teachers or coaches and, by exercising their political skills, rise to the top without studying the business areas modern CEOs need to master to succeed, such as human resources, communications, finance, and labor relations, he says.

"They have got to have all those skills that I mentioned to succeed in some of these school districts that are far larger than Fortune 500 companies," he says. "And you would think that they would go out and find people that have expertise in these areas, but more often they will appoint people that they grew up with in education that don't have the background in those areas, either."

To remedy that, the foundation started the Broad Superintendents Academy, a 10-month executive management program designed to recruit and prepare CEOs and senior executives from business, nonprofit, military, government and education to lead urban school systems.

The Broad Residency in Education places graduates from top-ranked business, law and public policy schools into two-year district positions in which they work with superintendents and other administrators to get first-hand experience. The participants often get high-level administrative jobs at those districts. The aim is to recruit people not only for superintendent positions but also for high-level jobs in district departments that have counterparts in corporations, such as human resources.

Some people might think that high-level administrators who interface with instruction, such as superintendents, must have classroom teaching experience. Broad disagrees.

He thinks nontraditional superintendents - those from business, military or nonprofits - should find and rely on team members with experience and knowledge in instruction. "You do need people to have classroom experience," he says. "But if you look at what's happened in American public education classrooms, you would rarely feel that these people with all that experience have succeeded."

Flawed School Boards

Broad, whose foundation staff members regularly attend school board meetings upon invitation, is not impressed with most elected school boards either, saying they are usually filled with "political wannabes," "well-meaning parents" and members of adult organizations such as teachers' unions that have vested interests in the status quo.

Meetings often are spent on "minutiae" and "micromanaging" everyday matters, rather than discussing student achievement and goals, Broad says.

In 2002, the Los Angeles-based foundation started The Broad Institute for School Boards, which holds annual six-day seminars where new school board members from the nation's largest urban districts examine case studies of urban educational governance and reform. Case studies are modeled after business case models used at Harvard Business School, with a focus on urban politics and reform strategies.

Although training new board members is important, Broad thinks he has a more far-reaching solution: transferring control of districts from school boards to strong mayors, such as Chicago's Richard M. Daley, who assumed control of the city's schools in 1995.

"Elected school boards are often [composed of] people who want to go on to become city councilmen, assemblymen, whatever," Broad says. "They are influenced by all the adult interests. They don't want to upset anybody, so they go along with the status quo. ... Mayors, if they are strong mayors, or governors-they know that the future of their city and state depends on how they are educating kids."

Set Goals and Measure

Broad says district leaders should direct as many resources to the classroom as possible by using cost-saving business practices to streamline and improve central office operations. Such reforms could include "zero based budgeting," which requires programs be justified each year rather than basing decisions on the previous year's funding.

Broad adds that leaders must set goals and measure progress, they must learn to communicate well with the public and employees, and they must recruit the best principals, who through good leadership can reduce teacher turnover and foster a cooperative school atmosphere.

The foundation is perhaps best known for its annual Broad Prize for Urban Education, given to large urban public school districts that show the greatest overall performance and improvement in student achievement while reducing achievement gaps among ethnic groups and between high- and low-income students.

The awards are given based in part on test scores, demographic data and site visits by teams of educational researchers and practitioners who work with the foundation. The most recent winner was the New York City Department of Education, which received $500,000 in scholarship money. (Long Beach [Calif.] Unified School District won in 2003 and was a finalist last year. Go to p. 42 for a feature on Superintendent Christopher Steinhauser.)

Although some criticize excessive standardized testing, Broad says districts, like businesses, need to measure performance. "If people have a better way of having objective measurement than tests alone, we welcome all of that," he says.

Broad says he is disturbed when he visits countries such as China where people value education "much more than we do." "If we don't turn public education around and do a better job, I think our nation's economic security is at risk," Broad warns.

With his unique brand of charity-his effort to educate school board members and district leaders in modern business practices and mentalities-Broad hopes to do exactly that.