Does Money Make a Difference?

In an entrepreneurial society where money drives the economic engine, it is easy to lose sight of the fact that throwing large sums of cash at a social problem does not always lead to a solution. There are way too many variables that cannot be readily controlled. Such may be the case with Facebook founder Mark Zuckerberg’s generous grant of $100 million to the school district of the City of Newark, New Jersey. Four years ago Zuckerberg’s donation along with then mayor (now US Senator) Cory Booker, established the Foundation for Newark’s future. The goal of the project was to turn the poor performing school system intro a “symbol of excellence.” But now four years later, students are still below their national peers in reading and according to a report in New Yorker magazine, $20 million of those funds went to consultants. What has not helped matters was that the state of New Jersey cut its aid to Newark’s schools by millions of dollars.

In analyzing this and other generous philanthropies we come to the conclusion that everyone in the community has to participate in a project and be a vested stakeholder in its success. That includes parents, teachers and community leaders. A community wide oversight committee should decide on how the funds will be spent and while some professional guidance needs to be sought, throwing 20% of your budget at high priced consultants does not help a first grader learn how to read.

Mr. Zuckerberg is not the only business mogul to spread his largess for societal good. One of the most notable programs focused on improving education (among other initiatives) is the Bill and Melinda Gates Foundation. This foundation, which has been up and running since 1994, is one of the largest private foundations in the world, with assets in excess of $36 billion. It has a more formal infrastructure and in- house employees both in Washington DC and Seattle, WA. This construct helps the foundation to invest in projects wisely and monitor success. We hope that other business and professional people will continue to lend their financial support to worthwhile projects. Yet we also must be mindful that money by itself will not solve social problems. It takes a village.

C.2014 J. Margolis