WalMart heir Carrie Walton Penner: Force behind America's charter school movement

Sam Walton's granddaughter Carrie Walton Penner is the most influential force in public education that you've never heard of. She shares her plan to make charter schools a national option in America

Published: Jan 15, 2015 06:52:26 AM IST
Updated: Jan 15, 2015 09:04:06 AM IST
WalMart heir Carrie Walton Penner: Force behind America's charter school movement
Image: Michael Thad Carter for Forbes

A vision for the future of education sits within a converted church in the heart of a working-class neighbourhood in northern Houston, abutted by auto parts stores and a heat treatment plant. At YES Prep North Central, homogeneity reigns: Of the 953 middle and high schoolers at the 11-year-old charter school, 96 percent are Hispanic, and a similarly large majority live at or below the poverty line.

The kids are dressed the same—blue or khaki pants with school-issued polo shirts. But most important, their outcomes are uniform, too: 100 percent of graduates get into a four-year college, as the university pennants lining the hallways suggest.

Gliding into the school, 44-year-old Carrie Walton Penner sticks out from the students—older, blonder and, in jeans and a black wrap jacket, more polished than the young collegiate uniforms she weaves through. She’s also the granddaughter of WalMart founder Sam Walton, the daughter of current company chairman Rob Walton, an heir to the largest family fortune, to the tune of $165 billion, in the entire world. And, as the family’s point person on education issues, she’s arguably the most powerful force in the charter school movement.

Anything to do with charter schools is a political lightning rod right now. As is pretty much anything to do with WalMart and the family that controls the world’s largest retailer. Until now, the personable Penner has been hesitant to speak up. Her conversations with Forbes make up her first extensive media interview, and she speaks with the careful deliberateness of one of her charter school English teachers.

Listen carefully, though, and you get a clear vision of the charter school movement over the next five years and her place in it, something that she’s been working towards, both consciously and unwittingly, over the past two decades.

YES Prep North Central is an appropriate place to begin that conversation. Ranked the fourth-best high school in Texas and 28th in the country by US News & World Report, it represents everything that’s great about charters. Namely that all children, no matter their circumstances, can succeed when they attend the right school. “We’ve always had a strategy and theory for change,” she says. “The current plan has been to have a new supply of high-performing, mostly charters, for parents to choose from.”

To Penner that last clause is key: Choice. Her four children, ages 10 to 16, go to private schools, but each attends a different one based on what is best for them. “We’re living choice. That’s what we want for all parents.” There are an estimated 6,440 public charters—defined as schools that receive some public funding but operate independently—operating nationwide. The Waltons have provided over $350 million in seed money to help start over 1,600 of them.

With critical mass, they believe, free market forces will kick in: Plentiful charter schools will force other public schools to compete for students and thus get better. (They’d love to see private school vouchers in the mix as well.) “We’re not saying all schools should be charters,” says Greg Penner, Carrie’s husband, a venture capitalist who was appointed WalMart’s vice chairman in June. “But that the dollars spent across the system will be more effectively spent when there is competition.”

Carrie Walton Penner feels time pressure. “Today we see the opportunity window closing for so many children and families,” she says. The Waltons have spent more than $1 billion on K-12 education since the late 1980s, with two-thirds of that doled out in the last five years; besides the seed money for schools, another $300 million has gone to build political and grassroots support, by funding charter school and parent advocacy groups.

She’s made progress. Nearly 2.6 million kids now attend American charter schools, versus 1.8 million three years ago. The anti-charter crowd derides the gains, insisting that these schools take highly motivated families and tax dollars out of traditional public schools, leaving tougher-to-educate kids behind. In October, Moody’s issued a credit outlook warning that Los Angeles Unified School District’s finances are at risk due to charter school growth. “We are heading towards a dual school system: One, privately managed and free to choose and exclude students; the other, public, which must take all kids,” says NYU professor Diane Ravitch. “Billionaires support the privately managed sector, in part because they love the fact that 90 percent of charters are nonunion.”

Such polemics conveniently miss that Penner has some unexpected allies—President Obama and Secretary of Education Arne Duncan—in her pro-charter camp. She also has 70 percent of the American public, according to an August PDK/Gallup poll.

With more than 1 million kids sitting on charter school waiting lists, there’s still work to be done, and Penner has emerged as the best positioned to lead the effort. “She comes across as very quiet at first,” says Richard Barth, a founding member of Teach for America, who is now CEO of KIPP, one of the largest charter organisations in the country, on whose board Penner sits. “But you would be mistaken to underestimate her. She wants to have a big impact.”

Sam Walton’s 1992 autobiography, Made in America, was one of the biggest-selling ever of its kind, and in it he provided a blueprint that his granddaughter has honoured: “Frankly, I’d like to see an all-out revolution in education. We’ve got to target the inner-city schools and the rural poverty pockets.” Walton donated his share of the book’s proceeds to the New American Schools Corp, which supported break-the-mould schools.

Sam and his wife Helen’s involvement in the sector dated back to the 1980s, when during a trip to Central America the couple learned that the then Soviet Union and Cuba had programmes to teach children from that region. They decided to start a US programme.

All of the Walton children and grandchildren since have been encouraged from young ages to get involved and come to the Walton Family Foundation’s triannual meetings. In fact, Sam and Helen set up the foundation as they did in part to get the family working together. “They knew that as WalMart grew, we wouldn’t be all coming together for the business,” explains Penner. For the 11 adult Walton descendants and their spouses, who all sit on the board, these meetings often double as family vacations. While one of the three meetings is always held in Bentonville, Arkansas, WalMart’s hometown, the other two have rotated to places like Sedona, Galveston and Washington, DC.

The family mostly acts in unison, at least publicly, but individuals take point on specific issues and projects. For instance, Alice Walton is the art lover who persuaded the foundation to spend $1.3 billion on an art museum in Bentonville. Penner’s father, Rob, is involved in the environment, another big area of their giving, and sits on the Nature Conservancy’s board.

Penner attended her first board meeting at 12 but became passionate about K-12 when, as a freshman, she started tutoring high school kids on probation at DC’s public schools. She was shocked. “There were no safe places for these kids, certainly not in school. It was amazing to me that they stayed in school given the circumstances,” recalls Penner. “I was helping a 17-year-old who didn’t read at second-grade level. I asked him, ‘What do you do when called on in class?’ He said he acts out.”

Penner was nearing graduation, in 1993, just as the family foundation was formalising. She pitched in, reaching out to Waldemar Nielsen, best known for his influential tome, The Big Foundations. At his recommendation, she went to New York City to work with several individuals and institutions, including education expert Edward J Meade Jr, a veteran of the Ford Foundation. She also interned at the Aaron Diamond Foundation, one of the first supporters of AIDS research, and at the Rockefeller Foundation, where she got to do a three-week stint in Zimbabwe. “We were trying to figure out our choices,” recalls Penner. “Learning by doing, which was my grandfather’s approach.”

The Walton Family Foundation was formally established in 1994, with Penner as its first programme officer. She worked closely with her uncle John, who was then leading their education work. One of its earliest grants funded curriculum development. Another went to Teach for America to send teachers to the poverty-stricken Arkansas Delta. That group has since gotten $93 million from the Waltons, making it the single-biggest recipient of the family’s funds.

As for Penner, she eventually headed to Stanford, where she conducted education-related research. (She had originally planned to get her doctorate, but graduated with two master’s.) In one study, she did qualitative analysis on how county-based centres provided math and science support to district schools and teachers. She also helped analyse the afterschool curriculum for middle and high school students in San Francisco’s high-poverty areas.

She might have taken a more low-key role had it not been for the sudden death of her uncle John in a 2005 plane crash. “We were shocked and concerned after he passed away,” says Jed Wallace, CEO, California Charter Schools Association. “But I saw that Carrie herself was quite formidable. She is the anchor of the family.”

Based in Atherton, California, Penner has a schedule that balances school visits (she tries to get into classrooms twice a month), conferences and her board work (she sits on six, all education-related). The latter has helped her form strong alliances with other charter-friendly philanthropists, including Gap heir John Fisher and Netflix’s Reed Hastings. This August, when a KIPP conference overlapped with a family trip, she sacrificed part of her vacation. “This is what she is passionate about,” says her husband, Greg. “It is what really gets her fired up.”

The Walton family gets a fair amount of criticism for the amount of philanthropy it has undertaken. Not unjustified. The total numbers are massive—at least $5 billion over the last 25-odd years. But as a percentage of their 12-digit fortune, it’s a pittance—not much more than what the average middle-class family gives away as a share of annual income, much less net worth. And that seems to even run against what Sam Walton himself intended. In his autobiography, he talked about giving away a number at least equal to “our share of the family assets” to non-profit organisations over time, which, even if read to exclude the $100 billion-plus eventually allocated to his children, would equate to more than $28 billion today.

Penner frequently invokes Sam Walton’s legacy. “My grandfather believed so strongly in opportunity and the power of the American Dream. He would often say there is no limit to what ordinary people can accomplish when given opportunity, encouragement and the incentive to do their best.” She thus seems keen to make a dent against her grandfather’s promise. Just before Thanksgiving, the family gathered in California to finalise a five-year plan for their philanthropy. A key part of it: Stepping up their education efforts.

Specifically, Penner has “evolved a bit” beyond choice as a panacea. The new mantras are accountability and reach. While charter school growth has been explosive, the results are uneven. According to a Stanford study, 25 percent of students in public charters outperformed local school districts in reading and 29 percent outperformed in math—but 19 percent and 31 percent did worse respectively (though those numbers are better than four years ago).

Thus, choice without improvement doesn’t achieve much. Penner’s new platform will make laggards more accountable and shut them down if necessary. Two years ago, the Waltons gave $5.2 million to the National Association of Charter School Authorizers to make standards tougher—206 schools have since closed. The Schumpeter-like goal by 2017 is to close another 700 while paving the way for 2,000 new ones. “A number of folks shied away from the problem of underperforming schools,” says California charter head Wallace. “Carrie’s been among the most vocal and assertive.”

In terms of reach, Penner knows that even when performing at their very best, these schools teach less than 6 percent of public school children. Her new strategy will be to take on entire cities. There’s already been an emphasis on places like New Orleans and Washington, DC, where almost half the kids are in charters. The new five-year-plan will go further—expect the Waltons to soon announce two to four midsize “proof point” cities with high poverty rates where they will work with on-the-ground partners to support students in and out of the school setting. The goal: Make sure “every child is being well-served within that community”.

Other new ideas include expanding help for students who don’t grow up in English-language households and for special education students (neither group has been served well by public charters). After that Penner hopes to focus on foster children and kids with criminal records.

Not simple problems. And Penner, with decades of productivity ahead of her, promises she’s in it for the long haul. “There are thousands of areas to work on that we’re grappling with,” says Penner. “We’re trying to incentivise broader choices and a diversity of models. This is hard work, and we don’t have all the answers.”

WalMart heir Carrie Walton Penner: Force behind America's charter school movement
Image: Jonathan Kozowyk For Forbes
George Weiss’s Say Yes has put more than 5,300 low-income students through college

The Biggest Test in Public Education

The Waltons are about to partner with entire cities. George Weiss is six years ahead of them

By Natalie Robehmed

As he limps out of McKinley High School in Buffalo, New York, George Weiss is in pain. Over the last hour he has toured the school’s greenhouse and fish farm, answered a Q&A session with 35 teenagers, held a 6-foot-long bull snake and sat in on an American history class, all with a fractured heel. “The doctors told me not to walk more than four blocks,” he says, easing his 6’1” frame into a black SUV. “But what can you say to a principal who wants to show you her school?”

Weiss is not in the habit of saying no. His non-profit, Say Yes to Education, is, as the name states, all about saying yes. Yes to after school tutoring, summer programmes, mental health counselling and services for families. And yes to paying for college for any kid who graduates from high school. To date, 65,000 kids have gotten the Say Yes support-and-guarantee treatment in 106 schools in six cities. Thanks to its scholarship programme, more than 5,300 students have received degrees, tuition free.

That’s the return from roughly $265 million that Weiss, a 71-year-old fund manager, has given to this initiative in 27 years. But getting to play Santa Claus at individual schools doesn’t really scale. So Weiss is funding one of the more interesting experiments in education: Can such a suite of interventions work on a citywide basis?

Weiss’ operation moved into Syracuse, New York, in 2008, its first entire school district. Then to Buffalo, the fourth-poorest major city in the US, in 2012. He’s about to announce that Say Yes is adding two more cities, which could raise the number of children in the programme to some 200,000.

The key for Weiss is buy-in, or as he calls it, “no political bulls--t”. How it works: Before giving any money, Say Yes requires city, county, government, school boards, teachers unions and private donors to all work together. The local partnership then agrees to pay for a longer school day and for one social worker for every 250 students. Other services include free legal clinics inside the schools for families and college-admissions coaching. Say Yes also pays for an electronic student monitoring system to follow kids’ progress, making note of attendance, behaviour and academic progress to ensure every student stays on track. Then comes the payoff. If you go to school in Syracuse or Buffalo and your parents earn less than $75,000, you are eligible for free tuition at most of the 70 private colleges—more than 30 added in the last 18 months—that have agreed to partner with Say Yes. Weiss and other local donors pay the tuition for any Say Yes student who goes to public university in New York State.

The son of Jewish immigrants who fled the Nazis for the US in 1939, Weiss grew up poor in Brookline, Massachusetts, bussing tables at age 11. He was working at a hotel coffee shop when a Boston University professor advised him to attend the University of Pennsylvania’s Wharton School.

It was at Penn that Weiss discovered his philanthropic inspiration. As a sophomore, his fraternity hosted a Christmas party for 12 underprivileged kids. Weiss befriended the gang, known as the 12 Apostles, by playing pool and basketball with them. After a few years, as a Wall Street broker, he returned to take them to lunch.

“We talked about their siblings in jail, sisters getting pregnant,” Weiss recalls. “Yet all 12 graduated high school. And one of the kids turned to me and said, ‘George, we couldn’t look you in the eye without graduating’.” The first school he adopted, of course, was in Philadelphia.

He now has entire cities of kids who must look him in the eye. So is it working? His myriad schools adopted since 1987 have shown consistent growth. At the original school he worked with, Belmont in West Philadelphia, 62 percent eventually graduated from high school—roughly double the rate before Say Yes got involved. Yet half of the female students became teen moms and 20 students were convicted of felonies, more than graduated from four-year colleges. (“The drug dealers steal your best math kids because they can do the numbers,” Weiss laments.)

Buffalo is beginning to see results: According to the New York State Department of Education, in 2013 the city’s high school graduation rate leapt to 56 percent, up 8.2 percentage points in one year. In 2012, 43 percent of Buffalo children achieved passing or advanced grades in the state’s integrated algebra Regents exam; by 2013 that number had risen to 49 percent. Before the first year of Say Yes college scholarships in 2013, just 57 percent enrolled in post-secondary education—now that figure is up to 66 percent. “With this great partnership, in this community there is no young person that can’t get a higher education,” says Buffalo Mayor Byron Brown, who has committed $1.3 million of city money to Say Yes.

In Syracuse, there have been financial issues. Say Yes has spent more than $29 million there so far—or $1,380 per student—while the city, county and state pledged to basically match that. But that latter promise was strained by budget cuts in 2010, requiring local authorities to reallocate funds. Say Yes provided a consultant who developed budget recommendations that cut things like high school study halls and smaller class sizes but kept counselling and support initiatives.

Still, the kids seem to benefit. The high school graduation rate has gone from 49 percent in 2008–09 to 52.9 percent in 2013. Back in 2008, only 29 percent of Syracuse children achieved passing or advanced grades in its algebra Regents exam; by 2013 that number had risen to 50 percent.

Sceptics remain. “Has it turned our schools around? No, not at this point, and it’s far from a panacea,” says Kevin Ahern, president of the Syracuse Teachers Association.

“The problem is, I can’t afford to do it all myself, even though my ex-wife thinks I have a huge amount of money,” says Weiss, who provides the vast majority of Say Yes’s financing. At the end of the day, as his personal contribution approaches $300 million, he’s conducting an extremely expensive and important field test that ultimately will require others to apply the lessons nationwide. “I sometimes get up in the middle of the night,” says Weiss, “because I still feel like I’m not doing enough.”

(This story appears in the 23 January, 2015 issue of Forbes India. To visit our Archives, click here.)

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