Program on Philanthropy and Social Innovation (PSI)

Education and Training

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Donald M. Stewart is President and CEO of The Chicago Community Trust, the third largest community foundation in the United Sates.  Previously, he had spent a sabbatical year at the Carnegie Corporation as Senior Program Officer for Higher Education and Special Advisor to the President.  While at Carnegie, he focused on programs to help strengthen private liberal arts colleges.  Stewart served 12 years as the President/CEO of the College Board in New York where he developed a national program to raise achievement levels of poor and minority students using Algebra and Geometry as platforms for academic success; 10 years as President of Spelman College; and was a program officer in the Middle East Africa program of the Ford Foundation.  While with Ford, he lived in Nigeria, Tunisia and Egypt.  He is an advisor to, trustee, or director of numerous nonprofit and for profit organizations, and has served on the Visiting Committees and as Adjunct Lecturer for the Kennedy School of Government and Graduate School of Education at Harvard. Stewart earned his Bachelor of Arts degree at Grinnell College and received a Master of Arts in political science as a Woodrow Wilson Fellow at Yale University in 1962. He earned Master of Public Administration and Doctor of Public Administration degrees at Harvards Kennedy School of Government.

Pearl Rock Kane is the Klingenstein Family Professor in the Department of Organization and Leadership at Teachers College, Columbia University, and director of the Esther A. and Joseph Klingenstein Center. She holds an Ed.D. from Teachers College at Columbia and an M.Ed. from Smith College.  She has published numerous articles about private schools on issues of governance, leadership, and the attraction and retention of teachers.  She is the co-editor of The Colors of Excellence: Attracting and Keeping Teachers of Color in Independent Schools, and editor of Independent Schools, Independent Thinkers and The First Year of Teaching: Real Life Stories from America's Teachers, as well as book chapters and articles in numerous publications.

Lisa Scruggs is an associate at the law firm Jenner & Block.  Previously, she worked on a range of education law and policy issues in positions at Business and Professional People for the Public Interest, the Consortium on Chicago School Research and the Chicago Public Schools Office of Accountability.  She is a founding member of the Young Womens Leadership Charter School and serves on the board of directors for Business and Professional People for the Public Interest, the Just the Beginning Foundation and the Georgetown University Baker Scholars Program.  Ms. Scruggs graduated cum laude from Georgetown University, then received her masters degree in education policy from the University of Chicago and her law degree from the University of Chicago.

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Chapter Summary

Donald M. Stewart, Pearl Rock Kane, and Lisa Scruggs

Nonprofit educational institutions and vocational training providers play a vital and unique role in developing the nations human capital. But like organizations in other areas of the nonprofit sector, they face serious long-term challenges, ranging from escalating operating costs to growing competition. The most challenged of all within this sector are the nations small, non-selective liberal arts colleges, which are struggling to maintain their unique focus and identity and, in some cases, just to keep their doors open, according to authors Donald M. Stewart, Pearl Rock Kane, and Lisa Scruggs.

This analysis is part of a broader assessment of The State of Nonprofit America coordinated by Dr. Lester M. Salamon of the Johns Hopkins University and published by the Brookings Institution Press in collaboration with the Aspen Institute.

The Nonprofit Role in Higher Education. Until the early 1950s, the nations higher education student population was fairly evenly divided between public and private institutions. But in the late 1960s, private enrollment leveled off at about 2 million, while public enrollment mushroomed, reaching 11.2 million in 1997. Though accounting for only 20 percent of the college population, however, private schools are nonetheless important players on the nations academic stage. They include such elite and influential universities as Harvard, Yale, Princeton, and Stanford, and they fill a variety of gaps. Private institutions include the nations historically black colleges, womens colleges, religiously affiliated colleges, and many small, rural colleges with fewer than 1,000 students.

The Special Risk to Small Liberal Arts Colleges. While the nations top-tier of private universities and colleges are thriving, their smaller counterparts are having a difficult time. Private institutions rely more heavily on tuition than public universities and collegesit represents 55 percent of their revenue, compared which 18 percent for state-supported schools. Somehow, private institutions must remain affordable while paying competitive salaries for quality faculty, making necessary technological improvements, and meeting increasing demand for student aid.

In response, some schools have relaxed their standards, increased their student-to-teacher ratios, and made other moves that erode their distinctive contribution to higher education. In addition, in order to attract a broader cross-section of students at a time when theres a general shift away from the liberal arts tradition, many smaller colleges have added career oriented studies, which also undermines their uniqueness.

Other Challenges to Private Higher Education. Other current challenges facing private universities and colleges include declining federal and state appropriations for research, the entry into the education "market" of online providers, and a shift in philanthropic interest from higher education to K-12. Despite these obstacles, enrollments at nonprofit universities and colleges are projected to grow at an annual average rate of 1.7 percent from 2004 to 2010, which is 0.1 percent higher than the anticipated growth of four-year public institutions. Still, the authors warn that the smallest liberal arts schools remain an "endangered species."

Challenges to Private K-12 Education. Private K-12 education faces different challenges. The proportion of students attending private elementary and secondary schools has remained constant for more than a centuryit was 11 percent in 1899 and it remains the same proportion today. One of the reasons for the enduring popularity of private schools is the higher caliber of faculty they attractmen and women who are highly knowledgeable in their subject areas and not interested in taking the teacher-preparation courses required by public schools. But public schools have begun competing for those teachers with aggressive recruitment campaigns that include alternative certification arrangements, sign-on bonuses, and tuition forgiveness plans.

Another challenging development for private schools is the growing need to attract diverse students. This often results in accepting students whose parents lack the means to pay, which obviously decreases revenue. Other recent developments in K-12 education present a mixed bag for private schools. For instance, vouchers could prove a windfall for Catholic schools, but the establishment of charter schools, which basically copy their successful model at a lower cost, could result in more competition for them.

Still, the authors contend that Catholic schools, prep schools, boarding schools, and other independent providers of K-12 education fill so many niches in the systems and are so firmly entrenched in the nations educational fabric that they will continue to thrive.

Nonprofit Workforce Development Organizations. The authors also look at nonprofit organizations that offer workforce development and training. More than 160 federal programs have encouraged the creation of these services, but in recent years for-profit training centers, employers, and community colleges have increasingly begun to compete for these government contracts. Federal and state policy now promotes coordination of services among these different providers.

The authors believe that nonprofit training programs can continue to play an important role in the delivery of employment and training services if they bolster their operations through strategic and financial planning and technology enhancements. Like other nonprofit educational providers, they can always thrive if they remain adaptive and innovative, while at the same time maintaining high standards of quality and offering greater choice and opportunity to a diverse population.