Growing Up Fast

Will Houston’s charter school expansion revolutionize urban education?

Original Source

by Jay Mathews

It all began with the waiting lists. At Harvard, Yale, and Princeton, long waiting lists are seen as evidence of high standards and prestige. But long waiting lists were the cause of headaches and heartburn at two of Houston’s most successful charter school networks, the Knowledge Is Power Program (KIPP) and the YES Prep Public Schools.

“We’re saying ‘No’ to a lot of kids to whom we should be saying ‘Yes,'” says KIPP co-founder Mike Feinberg. “That drives me crazy.”

Feinberg wasn’t alone. The waiting lists were driving lots of people crazy: parents, teachers, students. Eventually, those same waiting lists drove a group of bold, reform-minded philanthropists to take dramatic action. Over the last two years, those donors have given more than $90 million for a supercharged expansion of KIPP and YES in Houston.

Within a decade, the two programs expect to use that money to create a school district within the school district. By 2017, they intend to be serving a total of more than 30,000 students annually-roughly 15 percent of all public school students in the Houston Independent School District (HISD). It will require a massive expansion effort. In ten short years, KIPP and YES plan to build, staff, and launch a total of 55 new schools-42 KIPP schools, 13 YES schools-all without diminishing the quality of the education provided. It is a philanthropic initiative never before witnessed in the realm of charter schools, with implications for the growth of charter schools nationwide-and for large urban school districts everywhere.

A project of this scale has attracted Texas-sized contributions. So far, five donors have made eight-figure grants to the effort. Houston Endowment Inc. has given $20 million, split evenly between KIPP and YES. From Austin, the Michael and Susan Dell Foundation has donated a total of $10.9 million to the two charter school networks. Three more philanthropists have each given $10 million to KIPP. Two are prominent Houston couples: Jeff and Wendy Hines, as well as John and Laura Arnold. The third is the Seattle-based Bill and Melinda Gates Foundation.

In every case, the donors say they decided to make major gifts to KIPP and YES not only because of the schools’ success at raising the academic achievement of inner-city students, but also because the expansion plans present an opportunity to revolutionize urban public education. Donors hope that the KIPP-YES expansion will lead HISD schools to adopt KIPP’s and YES’s most effective methods, such as energetically recruiting and training teachers and principals, as well as lengthening both the school day and the school year.

“You will have many more students in a successful model that is working beside the public school system,” says Jeff Hines, whose $10 million grant to KIPP kicked off its fundraising surge. “Will that inspire the monopoly that has been in place to raise their game a bit?”

Growing pains

The fateful waiting list materialized two years ago. KIPP and YES Prep are public charter school networks: free, open-enrollment public school systems. They want to teach any student who wants to attend. But, in 2006, KIPP leaders discovered they had no space for some 2,500 applicants. Their four Houston schools-the KIPP Academy Middle School, the KIPP 3D Academy middle school, the KIPP SHINE Prep elementary school, and the KIPP Houston High School-were filled to capacity, with thousands of students waiting in line to get in.

KIPP was born in 1994, when Feinberg and his friend David Levin were twenty-something Teach For America corps members working in Houston. Together they persuaded the principal of Garcia Elementary School to let them create a special fifth grade program for about 50 students. They taught the large class as a team, using pedagogical techniques they had learned from veteran Houston teacher Harriett Ball, full of movement and music. Feinberg and Levin expanded the school day to 9_ hours, added Saturday classes, extended the school year into the summer months, and led a year-end field trip to Washington, D.C. They insisted on good behavior and required students to call them at home if they had any questions about their homework. Levin eventually moved back to his hometown, New York City, to start a KIPP school in the south Bronx, but Feinberg remained in Houston, securing a state charter for KIPP in 1998.

YES, meanwhile, owes its origins to Project YES-which stands for “Youth Engaged in Service”-a school program begun in 1995 by Teach For America corps member Christopher Barbic with 58 students at Houston’s Rusk Elementary School. His success persuaded him to expand the project. In 1998, he received a state charter for YES College Preparatory School; it was originally housed in trailers on an old horse farm in southeast Houston. Over the last decade, the network has evolved into a group of five academies serving the sixth through twelfth grades. Like KIPP, YES maintains high standards, keeps students for longer hours, and emphasizes community service and social justice projects. YES’s charter furthermore requires its high school seniors to be accepted into at least one four-year college before they receive a diploma. Since its first senior class graduated in 2001, YES students have been accepted into over 200 universities nationwide, including Yale, Stanford, Columbia, Brown, Rice, and the University of Texas, and have collectively earned over $17 million in scholarships and financial aid. Altogether, 88 percent of YES graduates are first-generation college-bound.

When KIPP and YES were conceived in the 1990s, the national charter school movement was just beginning. Today, the movement has grown to include over 4,000 schools, and KIPP and YES are often mentioned as among its stars. KIPP, with 57 schools in 17 states and the District of Columbia, has produced the greatest achievement gains ever seen in so large a network of inner-city and rural campuses. More than 80 percent of its students are low-income, and 95 percent are black or Hispanic. YES students share the same ethnic background, economic profile-and success stories. YES Prep made Newsweek’s list of the nation’s 100 most challenging public high schools, the only public high school in Houston to do so. If all of its current students maintain the record of 100 percent of graduates accepted at four-year colleges, YES will produce as many low-income college-bound students as HISD as a whole.

“Like winning the lottery”

Feinberg and Barbic are friends-indeed, they’re former roommates. Both are still in their 30s and both favor the modern shaved-head look. More importantly, both recognized that their charter school networks needed to grow. Before they began their rapid expansion campaigns, KIPP and YES were raising money to add a school in Houston every year or two. Both knew that wasn’t enough.

(While YES has always centered in Houston, KIPP has expanded nationwide and at an explosive pace, thanks to a scattershot-pattern growth strategy. The KIPP network’s main funders, GAP co-founders Donald and Doris Fisher, have supported Feinberg and Levin’s creation of a one-year training program for KIPP principals. The program draws in young people who share the founders’ passion, and in its first years would allow them to decide where they would establish their new KIPP schools. As a result, the network’s schools are scattered all over the country.)

Shawn Hurwitz, a friend of Feinberg’s, proposed an alternate idea. Hurwitz, the president of Maxxam, a real estate development company, thought it would make sense to focus much of KIPP’s growth in one place-and Houston presented an attractive opportunity. HISD is the largest public school system in Texas, and the seventh-largest in the country, with bellwether demographics that make it a leading indicator for national trends 20 years from now. Moreover, the city has long been friendly to reform. Before he was named Secretary of Education, Rod Paige was superintendent of HISD; the current superintendent, Abelardo Saavedra, was a fellow at the Broad Superintendents Academy.

Still, the challenges were formidable. Neither KIPP nor YES nor any other charter school organization has ever tried to recruit enough people to staff dozens of new schools in one city in just ten years. KIPP has very high standards for its principals, rejecting more than 90 percent of those who apply. Teachers also must perform at a high level, and it is not uncommon for a new teacher who is not doing well-and not responding to KIPP efforts to help them improve-to be fired before the December holidays. YES is every bit as selective.

There was another factor. Every student who wanted to go to KIPP or YES but couldn’t was losing out on a million dollar deal-literally. “We did this analysis,” says Leo Linbeck III, a prominent Houston businessman who has become an indispensable advisor to the expansion effort (see sidebar). “We took KIPP’s educational performance, how many kids graduated from high school, how many are projected to graduate from college, and we took census data. We took outcomes from HISD and outcomes from KIPP, and we applied those on a percentage basis to figure out the value added.”

Based on his analysis, Linbeck concluded that the loss to those students who applied to KIPP but could not get off the waiting list was enormous. On average, a student who went through the KIPP program was going to have lifetime earnings $900,000 greater than the average student who remained in a regular Houston public school. The same calculations applied to YES graduates. “It was like winning the lottery,” Linbeck says.

Blueprint for growth

Given the nearly $1 million boost to a student’s lifetime earnings, the leaders of KIPP and YES realized that adding a school or two here and there just wasn’t enough. “I come from an environment where you grow to meet demand, and it wasn’t obvious to me why they weren’t doing that,” Linbeck recalls. “You might have 500 entry slots and 2,000 kids on the waiting list.”
KIPP:Houston decided that if it could grow its network to at least 21,000 students, it would represent ten percent of the Houston school district’s total enrollment-big enough to be noticed, big enough to have an impact throughout the city. But it also meant that 42 KIPP elementary, middle, and high schools would have to come online by 2017.
Linbeck, Hurwitz, and Feinberg took their findings to the KIPP:Houston board. They all agreed. Expansion was necessary. The board members began to think seriously about how to expand the charter network. Once again, they relied on the advice of Leo Linbeck.

Linbeck is an impressive figure. Tall and bearded, Linbeck holds two undergraduate degrees from Notre Dame, a master’s degree in structural engineering from the University of Texas, and an MBA from Stanford. Today, Linbeck is the CEO of Aquinas Companies, LLC, the parent company of eight values-driven enterprises; under his leadership, the family-owned business grew from annual revenues of $40 million in 1994 to $550 million in 2007. Linbeck also teaches in the business schools at Rice and Stanford. His specialty: managing rapid growth in small businesses.

Linbeck first met Feinberg and Hurwitz when they asked him to build an elementary school for $5.5 million. He told them he didn’t think they needed one. “You’re building this elementary school, but you have no idea what goes into an elementary school because you haven’t run one yet,” Linbeck told them. “And yet you have this middle school and its doing great, but it’s in trailers. Why don’t we build you a middle school, and put the elementary school in trailers until you’ve figured out exactly what you want?” What they really needed, Linbeck concluded, was to build a middle school for $2.5 million.

Start with what you know, Linbeck explained. That way, the elementary school could experiment with different class sizes, different schedules, and different teaching styles, just as they had done with the middle school. Linbeck encouraged them to take advantage of their flexibility before locking themselves into an expensive building that would limit further experiments. Feinberg and Hurwitz thought about it, and agreed that Linbeck’s idea made a lot of sense.
Ultimately, they did exactly as Linbeck advised-not least because, as Linbeck later discovered, “they didn’t have $5.5 million.” KIPP would start with what it knew (middle schools), and then, as KIPP gained experience, build up (high schools) and build down (elementary schools).
Barbic was likewise impressed with Linbeck, and asked him to begin building schools for YES as well.
Funding for the future

Expansion plans of this scale require a massive capital infusion. Although KIPP and YES are running separate fundraising campaigns, they both knew they would have to raise enormous sums of money-and fast. Their success to date is a far cry from their first attempts to get money for their schools.

In 1994, Feinberg was a 25-year-old teacher who knew nothing about fundraising. A friend told him to try contacting big corporations, so he went through the telephone book and wrote down the names and numbers of the biggest Houston companies he could find. He called every single one to get the names of the directors of community relations. He then wrote letters to them, explaining KIPP and asking for an appointment to discuss the program further.

Out of more than 100 letters, only about a third responded. Most said, in polite corporate language, that they had never heard of KIPP and didn’t like the sound of it. None promised money. Feinberg finally gave up and confined his fundraising to friends and family, eventually reaching his goal of $2,000. The only businessman that either he or Levin persuaded to support them was Jim McIngvale, better known around Houston as “Mattress Mack.” Something about McIngvale’s raucous commercials-in which he sometimes threw money at the TV screen, yelling his trademark “Save you money!”-led the two young teachers to think he would donate. They drove to McIngvale’s warehouse-sized store and personally convinced him to cut a check. Years later, McIngvale remains a supporter of KIPP, and has contributed $1 million to the expansion effort.

Feinberg admits that, since then, he has learned to be more patient, to make friends who are interested in education, to hire the best possible teachers and school leaders-and to let the results speak for themselves.

The Turbo Project

Feinberg is leading KIPP:Houston’s fundraising efforts, which Linbeck has dubbed the “Turbo Project”-a massive financing effort that would kick KIPP’s growth into overdrive. “My experience is you put the same amount of effort into selling something big as selling something small,” Linbeck says. “And so if we were really going to go try to make an impact, and had a plan that was workable, we ought to go for a really big amount of money.”

John Arnold and Jeff Hines, both of whom serve on the KIPP:Houston board, were among the first to respond. And respond they did. Both Arnold and Hines wrote eight-figure checks; each gave $10 million to the expansion effort.

At age 33, John Arnold was the youngest member of the Forbes 400 in 2007. Formerly an oil trader at Enron, he now runs the hedge fund Centaurus Energy; with this grant, he and his wife Laura are entering K-12 education philanthropy in a big way. “This is our first significant investment in education reform,” Laura Arnold says. They view their $10 million investment in KIPP as a way “to express our commitment to the mission, our belief in its critical importance to Houston and beyond, and our confidence that this endeavor will be successful.” The Arnolds have been impressed by the organization and its leaders. “I don’t think the KIPP movement would be what it is without Mike,” she says. “Leo has a tremendous mind for making the logistics work.”

“What makes KIPP so special,” says Jeff Hines, “is the organizational culture they have created in their schools.” Hines, a Houston-based real estate developer, tries to instill a similar institutional culture in his own business, and was impressed when he found it in KIPP. “Teachers go way beyond the call of duty. They put in extra class time after school and over the summer. They have such a dedicated group of people. It is one of the best organizational cultures I have ever seen.”

KIPP:Houston has also secured commitments of $10 million from both Houston Endowment and the Gates Foundation. George Grainger, a senior grant officer at Houston Endowment, points out that while the Endowment has been funding K-12 projects for many years, it has only recently come to see that it needed to reconsider its education funding strategy. Its new approach involves investing in a small number of large-scale efforts. Only then, Grainger believes, will the Endowment significantly increase the number of low-income and minority students from Houston who go on to college.

Steve Seleznow, program director of education for the Gates Foundation, is of much the same mind. “KIPP has proven that all students can and will achieve no matter what their background or family income,” says Seleznow. “This unprecedented local commitment will provide thousands of additional children in Houston the opportunity of a KIPP education and the promise of a brighter future.”

“We are amazed at how generous the Houston community has been,” Feinberg says. Houston-based KIPP funders include Jan and Dan Duncan ($4 million), the Brown Foundation ($2 million), Tony Annunziato ($2 million), the Fondren Foundation ($1 million), Jim (“Mattress Mack”) McIngvale ($1 million), the Rockwell Fund ($500,000), the City of Houston ($500,000), real estate entrepreneur David Weekley ($440,000), Ann and Johnny Johnson ($250,000), and the M.D. Anderson Foundation ($250,000).

But KIPP’s ambitious expansion plans have also attracted major support from around the country. From San Francisco, Doris and Donald Fisher pledged $5.3 million to support leadership training for the new KIPP:Houston schools. From New York City, the Amy and Larry Robbins Foundation contributed $2 million towards the cost of building a new campus for SHINE, KIPP’s first elementary school. From Bentonville, Arkansas, the Walton Family Foundation will give through the national KIPP Foundation $400,000 in start-up costs for every KIPP school that successfully opens in Houston.

To KIPP’s leaders and their advisors, successful fundraising was a predictable consequence of hard work and friendly outreach. It was perfectly in keeping with one of KIPP’s mottos for its students: Work Hard. Be Nice.

Getting to YES

Houston Endowment has also promised $10 million to YES. “We told them we liked very much what they were doing,” says Grainger. “We were not particularly interested in funding their core day-to-day activities, but if they developed a strategy to expand greatly what they were doing, we asked them to keep us in the loop.” Ramping up the number of university-bound high school students is important to Houston Endowment. “If KIPP and YES can sustain quality and reach the scale they desire,” Grainger continues, “they will produce three times the annual flow of college degrees from low-income students that HISD is currently producing, and that is with one-sixth to one-seventh of the school district’s enrollment. It’s an experiment to see if they can do that, and we will know the answer in about 15 years.”

David Weekley, a real estate and construction entrepreneur, is another major donor to YES, and has been ever since Barbic first told Weekley what he and Feinberg were up to. In 1992, Weekley decided to regularly give away half of his income and resources. He especially liked that whatever funds he provided would be leveraged by YES’s and KIPP’s access to state funds, dispensed to each charter on a per-pupil funding formula. As a result, he has donated $600,000 to YES.

“What I saw in these two schools was the ability to get state funding, and the reality that they were open enrollment. They weren’t just creaming off the top of the underclass population. Anyone who had a desire could go,” Weekley says. “As an entrepreneur and businessman, I also appreciated the fact that there were contracts and agreements between both the parents and the kids and the school, and the recognition that to achieve educational excellence they all had to put in the extra work.”

Other major donors to YES have included the Brown Foundation ($3 million), the Charter School Growth Fund ($1.5 million), the George Foundation ($1 million), the Rockwell Fund ($1 million), the Fondren Foundation ($750,000), and Spindletop Charities ($500,000).

Building up both

Some donors, like David Weekley and Houston Endowment, have supported the fundraising campaigns of both KIPP:Houston and YES. Others, like John and Laura Arnold, expect to have funded both initiatives in the near future.

The Michael and Susan Dell Foundation has been among the most active and engaged of the donors to both expansion programs, particularly under the leadership of its Texas program officer Lori Fey (rhymes with “high”). The foundation has long supported national school leadership programs like New Leaders for New Schools and teacher programs like Teach For America. When Dell began to consider supporting charter schools in Texas, KIPP and YES were among the four charter school networks that received its first grants. Those grants have continued, and are now directed towards the expansion efforts. To date, the Dell Foundation has given $7.1 million to YES, as well as $3.8 million to KIPP:Houston.

“Their leaderships were very aggressive in putting together the greatest opportunities for kids, and part of our approach is to be a funding partner,” Fey says. “We try to stay in close contact. That gives us a lot of insight and perspective on where things need to be strengthened and streamlined.”

Fey says the foundation is also working with HISD to sharpen its management abilities and its self-assessment capabilities. Dell wants to help improve HISD, including its capacity for cooperating with charter schools. YES, for instance, used a Dell Foundation grant to begin a school on the campus of Lee High School in west Houston.

For both its KIPP and YES projects, Fey says, “we monitor success on two dimensions, implementation and quality.” Like many of the other donors, the metrics of success for Fey include the high percentage of KIPP and YES graduates who go on to college, graduate from college, and find success after college. “The end goal is to see Houston as a model for urban school transformation everywhere,” says Fey.

One of the newest contributors to the expansion program is the El Paso Corporation, which plans to contribute $400,000 in 2008 to support KIPP’s expansion. According to Bruce Connery, vice president for investor and media relations, the company’s involvement began when a former El Paso executive served on the KIPP board and suggested the schools might be worth the company’s support. El Paso CEO Doug Foshee (pronounced “Fo-shay”) toured KIPP and agreed.

“We’re a company with a great need of future employees trained in math and science,” Connery says. While El Paso has supported teacher training for a while, helping fund an expansion of schools with proven success in raising math and science scores appealed directly to El Paso executives. El Paso’s support includes plans to provide a math and science center at each new campus. The company has even hired two KIPP alumni who are now fresh out of college: one is an accountant and the other an engineer.

End of the lines

Raising the money for the expansion, Feinberg says, is no longer one of his top three concerns. Philanthropists have provided enough funds to begin turning the dream into a reality. These days, what really gives him nightmares are three related problems. First, there’s the problem of finding 42 great principals-and 42 top-notch leadership teams. Second, there’s the need to recruit 1,000 excellent teachers. And third, as Feinberg puts it, there’s the challenge of “building a central office that doesn’t turn into the beast.”

The last challenge is especially daunting. Education innovators like Feinberg and Barbic create charter schools precisely because they can’t stand the administrative red tape involved in running a traditional public school. But running 42 schools means that KIPP:Houston is about to become a large school district all on its own. It’s a question that hangs over the KIPP-YES expansion.

Hines says the administrative problem is one that all fast-growing, successful enterprises face. “Can they maintain the quality of their educational program-and have it be effective in each new school that opens?” he asks. Adds Laura Arnold, “It’s very difficult to find and train great new school leaders and great new teachers.”

But there is no other way to get rid of the waiting lists. “Waiting lists will only go away when people become indifferent to the choice between a KIPP and a traditional district school education,” observes Linbeck. “For now, we will expand to meet the demand for a KIPP education. At what point does the district react and say that they have to compete? It is going to be interesting to see how the district responds to keep those students.”

“We have to create some kind of equilibrium where our success isn’t just on us,” Feinberg concludes. “We need to help the rest of the system get better, so at some point we will grow ourselves out of the waiting list. It would be fine with us if the rest of Houston’s kids were so well served that they wouldn’t want to leave the regular system and come to us.”

Jay Mathews is an education columnist for the Washington Post

Sidebar: Leo Linbeck III

If any single person has been indispensable to the conception and execution of the KIPP:Houston expansion program, it’s Leo Linbeck III.

Linbeck says he was a disappointment to his teachers at St. Anne’s Catholic School and St. Thomas High School. Disappointment or not, he followed his family’s tradition and won admission to the University of Notre Dame. He graduated from Notre Dame in 1984 with degrees in civil engineering and the Great Books.

Another Linbeck family tradition is working in the family construction business. Linbeck held off for a while, but after a few summers earning money as a worksite laborer, ironworker, and welder, he realized he loved putting up buildings. “I love the social aspect of it, working together, and each day seeing the progress that you made,” he says.

He earned a master’s in structural engineering from the University of Texas, and worked in Japan for a year for Nishimatsu Kensetsu, a Tokyo-based construction company. When he returned to the States, Linbeck worked for the family firm for five years, and then went on to the Stanford Graduate School of Business. He is the only graduate in the school’s history to be both class valedictorian and winner of the Arbuckle Award (given to the graduate voted by classmates for making the greatest contribution to the school).

He returned to Houston to take a leadership role at Linbeck Construction. Today, Linbeck is CEO of Aquinas Companies, LLC, the parent company overseeing eight values-driven enterprises, with interests in construction management, stone and masonry construction, concrete structure construction, strategy consulting, patented products for the construction industry, medical products manufacturing, real estate development, and life science preventure technology development.

His business and academic successes have earned Linbeck invitations to lecture at MIT, Southern Methodist University, and the University of Texas. He serves on the faculty of Rice’s business school, where he teaches a course on managing growth in small organizations, as well as on the faculty of Stanford’s business school, where he lectures on strategies for running family businesses.

Linbeck and his wife, Ellen, have been married for 20 years and have five children, with ages ranging from 14 to 1. Two of the five are what Linbeck calls “homemade.” The other three were adopted from Colombia, Guatemala, and Ethiopia.

Linbeck has played a crucial role in designing and implementing the KIPP expansion effort, even though he has never been a formal member of the organization. He is sometimes referred to as KIPP:Houston’s “chief growth architect,” but Linbeck does not draw a salary from KIPP. Nor does he serve on KIPP’s board. He doesn’t even socialize with the KIPP leaders very much-largely because, as Linbeck is quick to point out, his days are already pretty busy.