Diary

Schoolhouse Scholars Fund

Americans pay their property taxes. It’s hard to hide a home. You can see them on Google Earth. You can drive by them and take photos. They’re a source of wealth that can’t be hidden. They therefore have made an obvious asset to tax locally, and as a safe revenue stream, they fund a very precious project of government; public education.

Ever incorporated city has a public school and a post office. These are pretty much the only constants in Everytown, America. But despite being the most ubiquitous parts of municipal life in America (and despite the notably innovative Ben Franklin being the country’s first Postmaster General), these two constants are perhaps the least tweaked institutions in the last couple of decades.

Mail is less important to our lives than it was before, but schools remain vital, as we transition from a world powered by crude muscle to one moved by minds and eyes reading pixels firing on a screen. We know market mechanisms will impel the aggregate pool of enterprising individuals to solve the problem of education if allowed, but, when property taxes sap income, put the capital in “free” barely passable schools, rather than with the consumer, parent will choose “free” over sacrificing in order to pay for “free” and tuition for another school altogether. As economizing behavior dictates that a consumer won’t willingly pay for a service twice-over, parents resign themselves to the substandard coerced “option.”

Vouchers, the allocation of property tax-collected revenue to the student, rather than a monopolized institution, was the policy position offered to correct the problem. However, entrenched interests demonstrate it’s implementation in our republic is impossible, and education efforts prove futile to pursued those that matriculated from public institutions. So it’s a political non-winner. In the 2008 presidential election, the first time, to my knowledge, in a general election, a pro-voucher candidate (McCain) ran against an anti-voucher crusader (one of the few issues he was unambiguous about, to boot), the public consistently polled for the anti-voucher Obama on education.

I wouldn’t council surrendering the fight on this issue in the political sphere, but until victory is achieved, a nation of children will wait to be liberated from a poor institution. That is, unless we erect a “Second Superpower” in American education. I have an outline. Below is the rough sketch of my school voucher endowment plan.

Business Model

  • Name: Schoolhouse Scholars Fund
  • Mission: Provide need-based (and perhaps merit-based) K-to-12 school vouchers to children in all 50 states.
  • Means: Collection of funds via hyperlinked referral rates from online vendors. While completely voluntary, the revenue gained could potentially equal a nationalized internet sales tax.
  • Recruitment: An email mailing list and RSS/XML feeds will remind those opting in before the Christmas season and family birthdays (if provided). A browser toolbar button should direct volunteers to the referral page as the “shop” button is hit.
  • Accreditation: Here’s my problem. I don’t know about existing accreditation agencies for private pre-college schools. I plan to recognize parochial schools first, as it should be easy to find the Catholic Church. National assemblies of various Protestant churches should be fairly easy, too, though I suspect most Protestant private schools are only informally affiliated with their national assemblies.
  • Protection against fraud: Hopefully, emulating FAFSA college-level financial aid will be easy enough. I wouldn’t imagine starting from scratch to be necessary.
  • Filing for vouchers: Oh boy. I’m hoping private school administrators partnering with the fund will assist prospective students in registering, the way a bursar office would help a college student file for aid. Otherwise, we’d have to build our own offices in every community, a nightmare in overhead!
  • Other services: Depending on how many opt in to the shopping program, the endowment may exceed the number of private schools capable of receiving them. It might be necessary to provide some grants directly to schools to help them expand their capacity. This shouldn’t be necessary, as schools with a realistic prospect of attracting many vouchers should qualify for loans, in order to expand.
  • Investing the endowment: It isn’t unusual for endowments to grow well beyond the total that will be doled out for a given year, which brings up the issue of what to do with inert funds. The recent downturn in the financial sector taught us that rating agencies mark some products as “safe”, when the foundations are indeed unsound. It is therefore in the best interest of the fund to take a highly conservative, indeed paranoid, investment philosophy. It isn’t a given that AAA ratings are safe, that bonds won’t go into default, that currencies will remain stable, or that banks will remain solvent.
  • The issue of course will ultimately be decided by a board of trustees, but I’d suggest advice similar to what I give publicly on my weblog. Bonds issued by state universities that are athletic powerhouses should be deemed more safe than bonds from any city, state, corporation, or national government. Don’t buy debt from tech startups that haven’t figured out how to “monetize” their service. Don’t invest in land in states that haven’t passed constitutional amendments against ‘Kelo’-style eminent domain abuse. And so on.

Loose ends: The storm, then the next storm, and so on, wrecked my line of thought. I can’t recall all of my loose concerns at the moment. I have a few ideas for board members. I have some long-term apprehension of a subversive ideological takeover of the board (this always happens, shifting a foundation for the original purpose. See the Ford Foundation as an example)

I suppose I’d just have to plan some long-term strategy that makes the endowment program unnecessary some seventy-plus years into the future. I’ll perhaps install some force-kill feature so this doesn’t run beyond the lifetimes of whatever successors  control it in the 22ed century.