Two months ago, Bill Gates told the Wall Street Journal that private money—including upwards of $5 billion in Gates foundation funding—"didn't move the needle much," in terms of substantial, measurable improvements in student achievement and graduation outcomes.

"It's hard to improve public education—that's clear," Gates said. "If you're picking stocks, you wouldn't pick this one."

Today Melinda Gates and Mr. and Mrs. Warren Buffett are talking education reform with NBC's Education Nation. With Gates' WSJ comments in mind, City Limits asked foundations and groups they fund: Do private dollars make a difference in public education?

The answer: Mixed.

We approached top education-reform funders like Gates, Ford, Carnegie and the Broad Foundation. We reached out to New Visions—a veteran school-management organization that's been part of developing scores of New York City schools—and to the Wallace Foundation, as well as the Annenberg Institute for School Reform.

Some foundations chose not to talk with City Limits; representatives of the Carnegie Foundation, for example, said that a conversation wasn't in the foundation's best interests— a no-comment that pinpoints the public-private conflict: Private foundations must protect themselves, despite their mandate to do public good. But those who spoke on the record told of reform efforts that signal potential success but face considerable challenges in scale, design and execution.

Individual successes in a big universe

It's hardly news that some of the country's wealthiest individuals and foundations have taken up education reform as a funding project: Corporate heavyweights like Goldman Sachs are backing new efforts by the Harlem Children's Zone. Current and former hedge funders like Whitney Tilson (T2 Partners), Paul Tudor Jones II (founder of the Robin Hood Foundation) and Julian Robertson (founder of the charter-supporting Tiger Foundation) are passionately active in education reform circles. A generation of prominent, generous education reformers, also described as "venture philanthropists", have remade the education reform landscape here in New York City.

Across the board, foundations and their recipients, like the Annenberg Institute for School Reform and the New York City Department of Education, say that individual successes deserve recognition.

"We are tremendously grateful for the philanthropic support and commitment from the Gates Foundation to improving student achievement and graduation outcomes in New York City,” said Department of Education spokesperson Deidrea Miller. DOE declined to respond to specific questions about where private moneys are best invested or the effect of private investment on public policy and public education. (A staffer there told City Limits, "We don't really have opinions on things. Things are what they are.”)

But those who do elaborate say that systemic change has been harder to attain than good results in a given school.

"We have had more success on the individual-school-innovation side,” Walter Simmons, executive director of the Annenberg Institute, said, citing a handful of New York City schools that blend academic and social/emotional support to keep students engaged, connected and motivated to learn. "But we haven't had that kind of success on the organizational learning and improvement side, on the systems or districts—we haven't learned from successful schools. That's the biggest challenge.”

"We've been frustrated in our inability to fund and redesign systems rather than individual schools,” Simmons added.

The price of money

Scaling up individual successes to systemic solutions has been reform's biggest challenge.

One obvious issue is the amount of money involved. Lucas Held of the Wallace Foundation echoed Gates' observation that private money is a tiny drop in the public-education bucket: "Contributions to public education are less than 1 percent of the annual spend,” Held said, referring to the $600 billion the U.S. spends every year on education. (For context, NYC's Department of Education 2011 budget was nearly $23 billion.) The Wallace Foundation targets "overlooked issues, the issues people agree are important but too costly for a single district to figure out a solution,” issues like strengthening school leadership and extending summer learning to shore up student achievement, Held said.

And the amount of money dictates how it is used. Annenberg's Simmons said that less than 2 percent of the $600 billion education pot goes to promoting innovation—compared with about 10 percent innovation-investment in corporations. The resulting thin, shallow investments mean that "school systems focus on outcomes. They under-invest in understanding who students are and the communities they come from. They don't focus on their students' unique set of experiences and aspirations,” or build the kind of community and mentoring partnerships that give high-need urban kids the active support to stay engaged in school. "Pockets of excellence don't scale up," he added.

A game with different rules

Both Wallace and Annenberg look to "scale up" successful reform from the individual-school level to entire districts and school systems. The Broad (rhymes with 'road') Foundation takes a systems approach: They aim to seed school districts nationwide with graduates of Broad's Principals Academy, and they reward urban districts that make outstanding progress with annual, million-dollar prizes to showcase and promote "best practices," according to Broad spokesperson Erica Lippert.

There's no denying the appeal of school reform to funders: "Giving back to the country, leaving an indelible imprint on society and the nation—you can have an imprint on the health of the world,” Lippert said.

But while the interest in school reform is a descendent of earlier waves of philanthropy that, say, built hospitals, a critical difference separates medical research, another Broad funding area, and education reform: "The medical field uses very high, rigorous standards,” Lippert said. "The National Institutes of Health sets standards, everyone's on the same page about what works. You don't have the equivalent of that in the education space. There's such a debate of what's working and what's not, it's difficult to make way through that morass.”

Partners, and problems

Supporters and critics debate the virtues and weaknesses of individual efforts, but no one denies that there's a healthy cross-pollination occurring across foundation and nonprofit funders and the public entities they seek to support—a feedback loop among education reform, edu-philanthropy and elected and school-district leaders that shapes the national debate on what's best for public schools.

But the economic tango between private givers and public school systems can be challenging.

Disparate resources among city schools—a product of philanthropic funding structures that favor high-poverty schools, high-need students, schools in transition, or those with robust corporate support or deep-pocketed parents to draw from—undermines the ideal of equity for all, Simmons said. "If we're expecting to close the achievement gap across the system, across the board, someone has to be thinking of equal distribution of resources with equal intensity as they apply to innovation in school reform.”

Policy, practice and funding are inevitably related, says the Wallace Foundation's Held—a practical truth that's even more critical in an economically strapped time, when funds applied must be made to work. "It's certainly the case that foundations are generally looking for organizations or districts that are already moving in the direction that the [foundation] grant supports,” Held said "There's a pragmatic reason for that—the grant is more likely to succeed if it's not some peripheral add-on –and it's also more likely to be sustained.”

But in seeking the biggest bang for their buck by backing programs or bolstering ideas that already have currency, foundations often attend carefully to the work other funders support. Broad, for instance, is echoing Gates' lead into the area of teacher support (although Broad has its own to-do list). And it's no coincidence that the bloom of the small-schools movement in New York City prospered with infusions of Gates money, earlier in the Bloomberg administration, and has tapered as Gates redirected its funding streams to other areas, like teacher evaluation and developing schools for older, under-achieving students.

Edward Pauly, who directs research and evaluation at Wallace, said, "Nobody
elected foundations to make policy or allocate public dollars.” In a pure research environment, political concerns wouldn't shadow economic investments—but in the real world of education reform, they do.

Lippert acknowledges the bottom-line truth of Gates' assertion, that private money is relatively puny compared to public education funding, but says "it's the most worthwhile category of investment that exists, because the future health of our economy, our democracy, and our citizenry depend largely on whether our public schools succeed.”