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The Wal-Mart effect 

For good or for ill, it's safe to say that the educational landscape in Arkansas would be drastically different today if Sam Walton hadn't been born in Bentonville.

The Waltons, individually and through their various family foundations, are by a large margin the largest donors to conservative education reform causes in the country. They've donated hundreds and hundreds of millions of dollars to educational causes nationwide, including the start-up funding that allowed the national private-school voucher movement to get off the ground more than a decade ago.

But they haven't neglected their home state. The two Walton family philanthropies, the Walton Family Foundation and the Walton Charitable Support Foundation, gave at least $390 million to educational causes in Arkansas between 1998 and 2006, according to tax returns and the Walton Family Foundation's web site (2007 figures are not yet available publicly).

That doesn't count individual expenditures, such as the hundreds of thousands of dollars Jim Walton has spent to fund lobbying efforts on behalf of the conservative school reform causes originally championed by his late brother, John.

What's that much money bought? More charter schools, and a looser law to regulate them. Merit pay experiments in Little Rock. The University of Arkansas's Department of Education Reform and its nationally known chair, former Manhattan Institute scholar Jay Greene.

It's also gone toward a host of less controversial programs — most notably endowing the UA's undergraduate honors college, but also the state's Single Parent Scholarship Fund, major scholarship programs for international students at three private Arkansas colleges, and contributions to a number of the state's public school districts.

“They have given a great deal to the public schools in Arkansas, but they've also given a great deal more to anti-public school” causes, said Dan Marzoni, president of the Arkansas Education Association. “I'm kind of confused about what they're trying to accomplish.”

Jim Walton declined through a spokesman to be interviewed for this article, and Kathy Smith, the education program officer at the Walton Family Foundation, did not return several phone calls. However, there's plenty to be learned just by looking at the numbers, and talking to other education activists in the state who've worked with the Waltons or their representatives over the years.

Education has always been a priority for the Walton family. Wal-Mart founder Sam Walton, for instance, founded the Walton International Scholarship program, which pays for students from South American countries to attend one of several private universities in Arkansas and was set up with the goal of counteracting the spread of communism on that continent.

Before his death in 2005, John Walton, one of Sam's four children, was a major leader in the school choice movement — charter schools and private-school voucher programs, in other words — nationwide. He gave $50 million in 1998 to help found the Children's Scholarship Fund, which helps low-income families in a number of cities (but not in Arkansas) pay to send their children to private schools. He also contributed substantial amounts to campaigns around the country to establish publicly funded voucher programs, with limited success.

The family's charitable foundations have maintained those priorities. In 2006, the Walton Family Foundation spent more than $92 million on K-12 education reform initiatives, including $55 million on charter schools and $27 million on private school scholarship and voucher programs.

The family's historic rationale has been that public schools will benefit from competition if all students — not just those from affluent homes — have choices other than their neighborhood public school.

The more than $390 million the family has spent in Arkansas since 1998 has been spread around to a variety of programs.

The greatest single donation was a $300 million pledge from the Walton Family Charitable Support Foundation to the University of Arkansas in 2002 — a gift the university believes is still the largest ever to a college in the United States.

Two-thirds of that went to endow the undergraduate Honors College — paying for full-ride scholarship packages for 600 of the state's brightest students.

The remaining $100 million went to the graduate school: $64 million was used to provide or increase stipends for graduate students, $24 million went to endow eight new faculty positions, and the remainder went to library and research resources.

Walton money also paid for half the cost of establishing the UA's Department of Education Reform and hiring Greene. The Manhattan Institute, where he was a fellow, is a conservative think-tank and a strong supporter of “reform” measures like charter schools and vouchers.

The department conducts research on education reform projects — including initiatives also funded by the Walton Family Foundation, a situation that, the researchers' claims of objectivity notwithstanding, has raised questions with some critics in the state's education community.

For instance, the department has released two studies of pilot merit-pay programs in Little Rock, one of which was partly funded by the Walton Family Foundation. Both reports concluded that the programs were a modest success, despite the fact that several of the schools involved wound up on the state's school-improvement list for their low test scores.

Gary Ritter, a lead researcher in the department, is adamant that he and his colleagues are not pressured by the Waltons or the Walton Family Foundation to produce studies flattering to the programs they fund. He doesn't see a conflict of interest, he said, because the Walton Family Foundation only funds — but doesn't run — the programs it wants evaluated.

“It only seems like common sense to me,” he said. “If I'm a foundation I'm answerable to the people who are giving me money, those people who are giving me money likely want to know it's spent effectively.”

Ritter pointed out that his department has also done studies with conclusions that weren't popular with business-oriented education activists like the Waltons — most notably the Arkansas School Performance Index, which rated schools statewide while taking into account characteristics like the percentage of low-income students and concluded that some “low-performing” schools were actually doing a better job than some that produced higher test scores.

“Some in the business community derided that report as giving excuses for poor performance,” Ritter said. “… But we received no phone call from the big mean funder that said ‘You shouldn't have done that.' ”

Still, there is plenty of suspicion about the department in some education circles.

“I have a great deal of concern about the Department of Education Reform,” said the AEA's Marzoni. “We don't feel that it's an honest research-based organization. We feel like it has an agenda and it's doing its research and it's leaning toward their already pre-conceived notions.”

In 2006, the Walton Family Foundation proposed a district-wide merit pay pilot program in Little Rock, which it would have both funded and paid to have evaluated by the Department of Education Reform. Little Rock teachers rejected the plan here; in Rogers, the school board ultimately rejected a different merit-pay proposal from the foundation that would have also included an evaluation by the education reform department.

While both those proposals were rejected, the Waltons had more success promoting merit pay at the state level.

Jim Walton is the primary funder of Arkansans for Education Reform and Arkansans for Better Schools, twin organizations whose sole employee is former State Board of Education member Luke Gordy and whose sole purpose is to lobby for causes like charter schools and merit pay at the state level.

In the 2007 legislative session, Gordy worked to get a bill passed that authorized school districts to use state tax money for merit-pay programs. The final bill was a hard-fought compromise that brought business interests together with the Arkansas Education Association to create rules that limited how the programs could work. Districts had to apply to the state Department of Education for approval; only one district and two individual schools had done so by the March 8 deadline.

Gordy has worked both in the legislature and in the business community to advance issues close to the Waltons' heart. In 2005, he spearheaded a successful effort to change the state's standardized testing system to what's called an augmented criterion-referenced test — basically, the state's existing Benchmark exams, which tests Arkansas's curriculum, “augmented” by questions from a national standardized test that will show how Arkansas students compare to students in other states. The change was put into place shortly after the Department of Education had fully implemented the un-augmented Benchmark exams, a still fairly new system. The first augmented Benchmark exams will be given in April 2009.

In 2007, charter schools were at the top of Gordy's agenda. He lobbied for a change in the state's charter school law to raise the number of charters allowed from 12 to 24, and to remove restrictions on how many charter schools could open in each congressional district.

One thing that's not on his agenda, Gordy said, is taxpayer-funded vouchers to send low-income students to private schools. It's been a major focus of Walton giving nationwide, but Gordy said he's had “zero” conversations with his bosses about vouchers in Arkansas, and doesn't think he will anytime soon.

“Anything's possible,” he said. “The conversation could be started, but it's going to be a long time before that gets any traction in Arkansas.”

It's hard to get a handle on just how much money the Waltons sprinkle around the legislature — campaign finance reports submitted to the Secretary of State's office aren't searchable by donor, and each legislator submits multiple reports during the course of each campaign.

One lawmaker who's benefited from Walton money, and who's been a reliable friend on their education priorities, is Steve Bryles, a Democrat from Blytheville.

Bryles got $4,000 from Walton enterprises during the 2007 campaign: $2,000 from Jim Walton, $1,000 from Arvest Bank's political action committee, and $1,000 from Wal-Mart. Bryles led the effort to loosen the charter school laws, and is supportive of other school choice issues, but said he'd feel the same with or without those donations.

“I look for allies — I don't care if they're left, right or in between,” he said. “If they can be supportive of what I've outlined to you, then I'm going to latch onto them.”

But state Sen. Jim Argue, outgoing chair of the Senate Education Committee, downplayed the Waltons' influence on education issues in the legislature — especially compared with the influence of the Supreme Court's Lake View decision on school financing.

“I don't think it was the Waltons,” he said. “We've had a tremendous six years in terms of school improvement, but it was all spawned by the court decision in 2002.”

Besides lobbying for friendlier charter school laws, the Waltons have provided crucial financial support through the Walton Family Foundation to charter schools in Arkansas. It provided about two-thirds of the initial $800,000 three-year pledge to start the Arkansas Charter School Resource Center, whose director, Caroline Proctor, helps would-be charter school administrators design their schools, put together their applications, and progress through the sometimes lengthy approval process before the state Board of Education. After the resource center opened, charter school applications jumped from one or two a year to more than a dozen.

The foundation also provides $10,000 planning grants to charter school applicants, and another $10,000 in start-up money to schools that are approved. Once they're up and running, schools can also apply for much larger grants. LISA Academy, for instance, has received more than $150,000 from the Walton Family Foundation; the Arkansas Virtual School, the Benton County School of the Arts and Haas Hall, a Farmington charter school that's faced serious financial problems, have all gotten $250,000. The foundation is also supporting the e-STEM charter schools, set to open in July in downtown Little Rock, although the amount hasn't been made public.

In all, the Walton Family Foundation gave about $1.7 million to proposed and existing charter schools between 1998 and 2006.

Proctor said the money is vital for charter schools — giving them necessary start-up funds, but not enough to operate without other outside support.

“The amount is just perfect,” she said. “No school is going to survive forever on it but it's enough to get somebody started.”

It's impossible to talk about the issue of charter schools in Arkansas without mentioning the state Board of Education service of Naccaman Williams, who works for the Walton Family Foundation on projects it supports in the Arkansas Delta region.

Williams, a former public school teacher, insists that the Walton Family Foundation's education agenda has no influence on his decisions on the school board. He has voted to approve some charter school applications, and to deny others, but is generally among the more supportive members of the board on charter school issues.

“The thing to do would be to take a look at my record,” he said. “I'm a former public school teacher. I support the public schools. Period. Charter schools are public schools.

“… As issues come before the board I review the issues based upon their merits,” he said. “The key piece for me will this be good for the kids of the state of Arkansas. No more, no less.”

Traditional public schools have also benefited from Walton Family Foundation money, particularly districts in Northwest Arkansas. From 1998 through 2006 the foundation gave at least $9.8 million to a couple dozen school districts, either directly or channeled through private education foundations affiliated with the districts (which has the effect of shielding the details from the public). A $50,000 gift to the Little Rock Public Education Foundation several years ago went to fund a pilot merit-pay program at a district elementary school. Other gifts have been used to fund grants to individual teachers, and to implement an assessment program that tests students periodically throughout the school year. The foundation's biggest gifts have been to the Bentonville, Rogers and Fayetteville school districts or their foundations.

At the college level, the Walton Family Foundation gave at least $65 million to both public and private schools statewide between 1998 and 2006, in addition to the $300 million pledge to the UA. The foundation has supported the UA's Chancellor's Scholarship program, and Harding University, John Brown University and the University of the Ozarks all received between $11 million and $21 million for their Walton International Scholarship programs.

Another $4 million went to Single Parent Scholarship Funds in Pulaski, Benton, Washington and Conway counties, as well as the statewide fund. That program was recently lauded by Gov. Mike Beebe as instrumental in raising the income level of the single parents who earned college degrees with the help of the fund.

The Walton Family Foundation has been the least generous with private schools, giving less than $200,000 between 1998 and 2006.

Although the majority of Walton giving in Arkansas has gone to public schools or universities, that's not reflective of their priorities nationwide, where the bulk of donations have gone to organizations that support alternatives to traditional public schools — charter schools and private school vouchers.

But the Waltons' support of traditional public schools is evidence of a vital difference between the Walton Family Foundation and other major conservative foundations, said Rick Cohen, national correspondent for Non-Profit Quarterly magazine and the former director of the Committee for Responsive Philanthropy.

Other conservative funders “seem to believe that the public school system is to be avoided at all costs, that it is in some way so toxic that it can not be worked with,” Cohen said. “What the Waltons are saying is the public system is a reality for the majority of kids — that no matter what amount of money you put into private schools and vouchers, the vast majority of kids are going to go to public schools for the foreseeable future. To try to create an alternative that bypasses the public system is an exercise in futility.”

Finally, it's tempting to say that what the Waltons do with their own money is their business. But Cohen offers a compelling argument that that's not the case.

“What you have in philanthropy … is people dealing with tax exempt money,” he said. “It would otherwise be public money, but we've entrusted it to them to use in the public interest. The public ought to take a good hard look at how philanthropic money is being used, and what the results are.”
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