Class Warfare

Good schools have always attracted parents considering a move to a new neighborhood. But suppose a developer took a more active approach--making the local schools better as a marketing tool?

Tom Hannon remembers the day he convinced his boss that happy, wealthy schools could be part of a real estate sales strategy. At the time, in 1985, Hannon was marketing director of a new, upper-end, golf-and-housing community being developed in Florida's panhandle. What if, he asked his boss, the company actually gave enough money to the local school that it became noticeably superior to surrounding schools?

"And he looked at me," Hannon recalls, "and his eyes just lit up."
Now Hannon works for Gerald Hines, the Colorado and Texas developer. A Hines company, River Valley Ranch, is building a high-priced, 685-unit golf-and-home community in the small mountain community of Carbondale, just up the valley from Aspen. Together the two men are about to make the 1,200-student Carbondale school district one of the wealthiest in Colorado.

For starters, Hines, through his Carbondale Education Foundation, has donated $100,000 to be distributed over the next four years to Carbondale's three older schools (a fourth is new), which sit across the street from Hines's development. The first check has already bought carpeting for the elementary school; computer, art and recreation supplies for the middle school; and a completely new telephone system for the high school. And over the next four to eight years, Hannon estimates, Hines and River Valley Ranch will pour an additional $400,000 into the Carbondale schools.

"Certainly, having an organization like the River Valley Ranch puts a school in an enviable position," agrees Roaring Fork School District Superintendent Jim Phillips.

But what if your daughter attends school in next-door Basalt, over the Carbondale boundary--a line Hines's generosity doesn't cross?

In Colorado, until relatively recently, it was a given that if you lived in a wealthy community, your children would enjoy generously funded, well-stocked schools. Because local property taxes made up much of a school's budget, rich communities simply had more money to pour into their classrooms. Thanks to new laws, though, these days the tax dollars are being more evenly distributed.

For the past ten years the Colorado legislature has served as an educational Robin Hood, making sure that students at, say, Harrington Elementary School, in central Denver, receive just as much public money as those who attend Greenwood Elementary, in Cherry Creek. Under the school-finance act passed in 1988 and then fine-tuned in 1992, lawmakers have shuffled money from the wealthy, property-tax rich suburbs and mountain playgrounds into poorer inner-city and rural school districts.

Over the years this Robin Hood strategy has produced a series of complex mathematical formulas that require months of rigorous study to understand. But the new laws have succeeded in their goal: In general, Denver's public schools get just as much money from property taxes and the state government, per student, as do schools in Douglas County. A recent nationwide study gave the state a B in fairness for the way it allocates money for its students.

While this has thrilled parents whose children go to school in Meeker, for example, which saw its per-pupil spending nearly double over the past several years, the new laws have not been nearly as popular in Aspen, where the school budget dropped despite rising costs and inflation. "The school finance act helped a lot of people; it helped a lot of districts," says Joe Tarbet, the district's finance director. "It didn't help Aspen."

In response, some motivated parents formed the Aspen Education Foundation. Since 1991 it has raised about $60,000 a year, thanks in part to the town's famously wealthy residents, who feel strongly that Aspen's students deserve better than average. "We think there should be flagship schools leading the way instead of everyone sinking into mediocrity," says Kristin Jensen, volunteer director of the foundation. "And part of the reason we did [lead] was because of better funding."

Aspen and Carbondale are but two examples of schools that, owing to their locations, remain richer than others in spite of the legislature's best efforts. As school districts increasingly receive only the public money necessary to cover bare-bones classroom basics, private money has played a greater role in determining which students get new computers, working band instruments, sufficient art supplies or field trips to nearby museums.

Not surprisingly, wealthier districts--or schools serving affluent communities within districts--frequently come out ahead. As a result, one side effect of the state's well-intentioned attempts at publicly funded school equity has been a new, privately funded inequity.

Every year, as part of the research she does for her self-published Magnolia Press guides to Denver-area public schools, Margerie Hicks visits most schools in the metro area. She says the differences between the schools situated in well-off neighborhoods and those surrounded by poorer areas are unmistakable. "And," she adds, "private donations usually are the difference."

In 1993 Colorado Springs District No. 11 opened a new chapter in education history when it became the first school district in the country to aggressively sell advertising. Situated in one of the state's most conservative communities, the district hadn't managed to push through a bond issue or tax hike in nearly two decades. So it got creative.

At first, says Tracy Cooper, who does double duty as the district's spokeswoman and director of its advertising program, the district handled the ads on its own, selling space along school hallways and on the sides of buses to Burger King and King Soopers. Despite all the initial fuss and furrowed brows, the program earned only $73,000 in the first two years--pocket change for a 33,000-student school district.

Disappointed, the district last year went pro, hiring D.D. Marketing, Inc., of Colorado Springs to help out. District 11 now offers sophisticated exposure packages that would do the Denver Broncos proud. Twelve thousand dollars buys a corporate sign and logo on five buses and in all 52 schools in the district; a banner at the football stadium, as well as public-service announcements mentioning the company during games; a logo in the district's annual report and employee directory; an ad in the school newspaper; and free tickets to high-school sporting events. In 1996 alone, the district netted nearly $90,000 from its revamped advertising program.

As its revenues increased, District 11 noticed a shift in the way other schools regarded its ambitious fundraising strategy. In the beginning, Cooper says, educators looked down on Colorado Springs as a crass school district that had crossed the line between community partnerships and outright hucksterism. But a funny thing has happened since then: Colorado Springs is now being viewed as a pioneer in the field of creative financing.

Other school districts in Colorado have followed Colorado Springs' lead. Pueblo now sells advertising on its buses. So does Cherry Creek. Last year the Denver school board agreed to sell ads on its buses, too, and within the next few weeks the district will announce a series of major corporate sponsorships that will give generous exposure to several well-known corporations in exchange for their getting a crack at Denver's student consumers, according to district spokesman Richard Frye.

Schools have always relied on parents and neighbors to raise money. Most kids have, at one time or another, sold pizzas for a band trip, wrapped Christmas packages for new art supplies or hawked candy bars to buy football uniforms. Yet teacher contract commitments and increased government mandates have continued to erode the money schools can spend on "extras," and private fundraising is becoming a bigger part of student life.

Hicks says she has noticed a subtle change at national parent-teacher organization conventions, which she attends regularly. In recent years the largest and most active booths have been those sponsored by companies specializing in helping schools squeeze money out of local businesses and communities. "It's much more of a business environment out there these days," adds Frye.

For communities, the perpetual requests can become fatiguing. In the well-to-do suburban foothills districts to the west of Denver, residents are hit up by three levels of fundraisers. They start at the individual school level, where parent-teacher organizations hold at least one or two fundraisers every year.

Next up is the Mountain Schools Fund. Started in 1990 by, among others, local media personality Gregg Dobbs in response to a series of failed bond measures, the fund sponsors an annual telethon. Over the course of a weekend volunteers call literally everybody in the Conifer and Evergreen area and ask them for donations. Each year, the fundraiser has netted about $75,000 (including a matching grant from an Oregon foundation). The money is distributed to the ten mountain schools, which spend it primarily on computers and other technological tools.

The begging doesn't end with the telethon. The Jefferson Foundation, started in 1983, now sports a twenty-member board of trustees and a paid executive director. Through its sponsorship of the annual Crystal Ball at the Arvada Center and other fundraising efforts, the foundation collects more than $100,000 each year from the community, which it then funnels back into worthy school projects scattered throughout the county's schools.

And that's not including the extra fees and payments parents must make above and beyond their yearly tax assessment if they want their children to enjoy the full school experience. Jefferson County, for instance, asks for $75 from each student participating in high-school sports. And because the schools' food-service providers must earn their way--the district cannot and will not subsidize them--Jeffco cafeterias charge market prices for their food or contract out with Pizza Hut or Taco Bell for hot lunches.

This frantic quest for cash is creating a new breed of principals and administrators who, in addition to overseeing schools, must now concentrate on fundraising as well. To get them in the right frame of mind, Jefferson County District R-1 asks its principals to join the local chamber of commerce.

Down the mountain, the Denver School for the Arts is in the process of moving from Cole Middle School to Byers, on South Pearl Street. The district has already informed the school's administrators that they will have to come up with most of the money for necessary renovations. "The principal will have to be like a college president, glad-handing and fundraising," in addition to running the new school, predicts Frye.

Back in Colorado Springs, Cooper attributes the district's go-get-'em fundraising efforts to Superintendent Kenneth Burnley. "He let it be known early on that he had a vision of entrepreneurship," says Cooper. The superintendent has shared his vision, producing a series of tapes featuring motivational speakers and a cameo of Burnley himself, which the district sells to companies and other schools.

The message of self-sufficiency has filtered down through the district. Recently two District 11 elementary schools enticed MCI, which has a large office complex in Colorado Springs, to use their classrooms as demonstration projects. The company supplies the schools with its latest computers. In exchange, the schools serve as a living, breathing pitch for MCI's sales force. This year, notes Cooper, MCI assigned a full-time employee to the schools.

Other school principals have made do with what they can. Two years ago Colorado Springs's Wasson High School went to a block schedule, modeled after Colorado College. Rather than the traditional change-subjects-at-the-bell model, Wasson students study a single subject for several weeks and then move on to another subject. The program has proved popular, and school administrators across the country have contacted Wasson to learn more.

What to do if you want to be an entrepreneurial administrator in an entrepreneurial district? This year Wasson began charging fees for its time and experience, in effect turning its employees into paid educational consultants. Over the next few months a team of Wasson teachers and administrators will fly to Hawaii and Connecticut to give talks on block scheduling. The money they earn will flow back into Wasson to benefit the high school students there.

The competition for cash can cause friction, pitting school against school or school against district. Last year, as administrators sought to nail down either Pepsi or Coke as the sponsor of a new sports stadium in Jefferson County, negotiations bogged down. The reason: individual principals, particularly in the district's high schools, had already been cutting "exclusive" vending machine deals of their own, playing the soft-drink manufacturers against each other in an effort to raise money for their particular schools.

Many of the principals' deals had to be scuttled. "The district had to put the kibosh on that," recalls Cheri Lyons, who works to secure grants and other alternative funding for Jefferson County.

That didn't solve the basic problem, though. The most recent area of contention, Lyons says, is before- and after-school daycare centers, a growing source of extra cash for individual schools. For years private day-care providers have griped about the trend, with companies such as Children's World complaining that public schools were eating into their business.

Now principals are squabbling, complaining that it hurts their business when a nearby school opens a before-and-after center. "There's not much guidance from the district, so things are kind of going crazy out there," Lyons says.

One of the most popular ways schools raise money is through coupon books. Students usually hawk the books--which have ski and fast-food discounts--for $10, of which their individual school gets to keep $7. Some schools are successful with coupon-book sales. Others aren't.

Last fall, when the district's coupon campaign began, Lakewood High School decided not to participate at all. One reason, according to the Jefferson Foundation, was that the neighborhood hadn't been very supportive; the previous year the school had sold all of 21 booklets. (An administrator says part of the reason for the poor sales was that the neighborhood was saturated by elementary-school-aged salespeople.)

Meanwhile, across the district in the affluent southwest corner, students from Westridge Elementary sold 2,200 of the coupon books.

In the past, private funding has trickled, rather than gushed, into the schools, so districts haven't made much of an attempt to measure where the money comes from, where it goes and whether it is spread evenly. Nevertheless, officials insist that they stress--and generally attain--equity.

In Denver, administrators have made a head-to-head comparison only once. Last November, in response to a parent's complaint that Slavens Elementary, on well-off South Clayton Street, had nicer facilities and equipment than Valdez Elementary in northwest Denver, the district whipped out its calculators and rustled up a report.

Thanks largely to federal grants and additional public money Valdez collected for "at-risk" students, Denver's bureaucrats found the opposite of what the parent charged: The inner-city Valdez actually spent about 50 percent more per pupil than did Slavens. "This board has made equity a priority," insists Frye.

Other studies have reached far different conclusions. In a doctoral dissertation written three years ago, Genevieve Garcia, now an elementary-school principal in Monument, analyzed privately raised money received by schools in different neighborhoods in El Paso County's District 12.

In one example, she contrasted the money raised in two elementary schools (she says she collected data with the understanding that the schools would remain anonymous) by selling class pictures. The first school earned $2,783; across the district, a similarly sized elementary school collected $452. The first school also nabbed more than $33,000 in grants from the local parent-teacher organization; the second, $4,000. "There was a huge difference," she recalls. "Basically, the rich got richer."

Dean Damon recognizes the phenomenon. Now the director of the Colorado School Finance Project, which promotes further state education funding reforms, Damon served as superintendent of the Boulder Valley School District from 1989 to 1996. Several years before he quit, he recalls canceling a popular school fundraiser in which families redeemed their Safeway and King Soopers receipts for a percentage of the total.

Although the project raised a lot of money for individual schools, Damon says he had to drop it. "The larger and more aggressive public schools in higher-income areas generated a lot more money and spent it on a lot more computers for their school," he recalls.

Debbie Lynch, who runs the ten-year-old Aurora Education Foundation, sees the same pattern during similar fund drives with Cub Foods. "There's a lot of difference between a grocery receipt in one part of our district versus another part," she says.

In general, she adds, the Aurora School District can be split into an affluent south and a less-well-to-do north. "We have a couple of elementary schools with PTAs that raise $40,000 off various sales--Vassar or Dartmouth--and others--Kenton, Fulton, Montview--that can hardly muster a parents' organization, much less raise any money," Lynch says.

Jefferson County, whose boundaries include both wealthy suburban communities and inner-city neighborhoods, has a similar split. The south and west parts of the county boast sparkling new schools (Evergreen, Conifer and Dakota Ridge high schools all opened last fall) crammed with modern equipment.

Visit Bradford Elementary, which sits near Lockheed Martin and serves the upper-class Ken Caryl Ranch community, and, says Lyons, "we've got kids on the Internet, traveling to science centers around the world." Or stop by Westridge Elementary, near Chatfield Reservoir. Lyons says that school recently cut a deal with IBM to place a hundred new computers in the school and give each student his own ID number. In exchange, IBM, like MCI in Colorado Springs, gets to use the school as a living sales floor, bringing clients in to watch the students learn.

"And then there's Lumberg Elementary," Lyons adds. "It's an older school, so for starters it couldn't even be wired for such a computer network." The students at the Edgewater school work on ten-year-old Apple computers. "They're just trying to keep their heads above water," she says.

As director of the Jefferson Foundation, Mona Sandoval-Wittmus notices the disparity between rich and poor schools when she reviews grant requests from teachers around District R-1. This year, well-off Bellmar Elementary applied for a grant to use laser discs as a tool for preparing multi-media presentations. Chatfield High School requested a networked and integrated software package that included laptop computers.

Lakewood's Westgate Elementary, meanwhile, simply wanted a few more computers.

"I see that a lot," she says. "Some of the border, inner-city schools are applying to us for just the basics. And the wealthier ones have all the extras."

If there are funding differences from school to school, the gaps in the amount of private money collected between districts can be even more conspicuous. That's what University of Colorado professor Paul Baumann found when he studied "educational entrepreneurship" in several Denver-area districts.

In an article he submitted this past summer to the Journal of Education Evaluation and Policy Analysis, Baumann compared the amount of money raised by "a suburban school district" west of Denver and an "urban school district." While conceding that some figures were incomplete--particularly from the urban district--Baumann concluded that, outside of direct taxpayer revenue, the suburban district raised $171 per student. The urban district: less than $3 per student.

Baumann says his conclusions are just common sense. "Alternative revenues do have an impact on equity, definitely," he says. "The more affluent the district, the more success it will have raising money, leading to even greater inequity."

Baumann and others involved in such studies admit that, when compared with a school's entire budget, the amount of money being raised privately represents a small fraction--for now. "I think that pretty soon we're going to have to include private money in our calculations of equal school financing," predicts Jane Urschel, a former Boulder Valley school-board member who now works for a state school-board association.

The disparity between districts is vividly illustrated by the state's various education foundations, both in the amount of money they raise and how they raise it. Generally formed by parents in response to a local school funding "crisis," these foundations are nonprofit organizations whose primary purpose is to raise money and then distribute it to teachers and schools within a particular geographical area. Teachers and administrators agree the foundations do wonderful--and increasingly necessary--work.

To the south of Denver, fast-growing and prosperous Douglas County is blessed with two foundations. The first, the Douglas County Educational Foundation, was started in 1990 and boasts an honorary board of trustees that includes First Lady Bea Romer, Lieutenant Governor Gail Schoettler and Channel 4 anchorman Bill Stuart. Last year it raised just over $115,000, including a $15,000 donation from Texaco (for the purchase of scientific "probeware" for three high schools) and $5,000 from Mobil Land Development Corp. (builder of the sprawling Stonegate subdivision). It raises money through concerts and a golf tournament, which this past October was held at the exclusive Castle Pines Golf Club.

Douglas County also is home to the School Facilities Trust Fund Foundation. Founded in 1993 by local homebuilders such as Mission Viejo, Richmond, Oakwood and U.S. Homes, the developers established the trust fund as an alternative to a building impact fee levied by Douglas County a year earlier.

While state courts were deciding whether the impact fees were legal (in December the Supreme Court determined that they were not), the developers placed a portion of the money collected from the fees in an escrow account. Today that account holds more than $10 million, says Steve Ormiston, vice-president of marketing for Mission Viejo and vice-president of the trust fund's board of directors.

So far, the Douglas County School District has drawn from the fund to pay for expansions of Highlands Ranch High School and Ponderosa Elementary and to cover the entire cost of building Trailblazer Elementary from the ground up. In addition, Ormiston says, members of the trust have contributed time and money to the design of three more schools soon to be built.

Such foundation support is great for Douglas County--and a pipe dream for an urban district like Denver. "I wish we had one of those," sighs Frye.

The Foundation for Boulder Valley Schools raises about $200,000 annually, including, this past year, a $25,000 donation from the locally based Quantum Corporation. That money will be used to start a new "Quantum Leap Initiative" to raise even more money, which will be earmarked to "enhance student learning through the use of technology."

Cherry Creek also has a flush foundation. As home to some of the most expensive real estate in Colorado, Cherry Creek School District No. 5 has been one of the state's largest losers in the drive to provide equal funding for Colorado's schools. Equality has been unpopular there.

"People want to say, 'Well, Cherry Creek is a wealthy district.' But we don't receive any more per-pupil spending than any other district in the state," complains Claudia Myers, executive director of the Cherry Creek Schools Foundation. "So to say we are a wealthy district is false. In fact, it could be that we receive less because we don't have as many 'at-risk' students, who attract more state money."

So the foundation has been busily trying to make up for lost state funding since its founding in 1993. It has been very successful; this year Myers hopes to collect $360,000 in private contributions. "Each year I've been here, we've doubled what we got from the year before," she says.

One of the foundation's more profitable fundraisers is a "leadership luncheon" that targets potential donors in the business community. Past speakers have included former Nuggets coach Dan Issel and, last March, Broncos coach Mike Shanahan (whose luncheon raised $200,000, including a grant from an out-of-state foundation). How did the foundation nab the two busy men? Simple: Both of them live in the district.

The Jefferson Foundation has put the arm on its county's wealthier residents, too. Kent Landmark is the treasurer of the foundation; he also is president of FirstBank, which, not coincidentally, made a $50,000 donation to the Jefferson Foundation. So did Jeffco resident Bill Coors, who recently wrote a check for $10,000.

Since it was founded four years ago, the Littleton Public Schools Foundation has raised a half-million dollars for its already generally well-off students. Last year the foundation hired its first full-time director, Jane Robb.

Robb says such foundations help put parents back in charge of their children's education. "It brings the ability of what you want to do back into the community," she explains. "If a science lab in a middle school isn't what you think your child needs, you don't have to wait for some administrative decision."

Her district-wide foundation is careful to distribute the money equitably, Robb notes. "We do not discriminate from school to school, or even necessarily try to spread the grants out among schools," she says. Rather, the foundation bases its grants entirely on the creativity and value of individual proposals.

But Jeffco's Lyons says such even-handed treatment, while democratic, does little to close the gap between the haves and the have-nots. If the Littleton foundation pays just as much attention to the pleas of an already well-off school as it does to those of a poor one, she notes, certain schools will always be playing catch-up.

As other schools catch on to the value of education foundations, it's no longer just the wealthy districts irked at school-finance reform that boast their own tax-free fundraising groups. Today the Colorado Consortium of School Foundations has nearly two dozen members.

Back outside of Carbondale, the Roaring Fork School District recently called on local resident Pete Rohan to run the new Roaring Fork Education Foundation. He will try to raise money for schools across the sprawling district, which in addition to Carbondale includes Basalt and Glenwood Springs. Rohan, a former national vice-president for Junior Achievement, says he has great hopes for future fundraising. As of now, however, the Roaring Fork Education Foundation has raised about $10,000.

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Eric Dexheimer
Contact: Eric Dexheimer