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If you followed the 2016 ballot question campaign on charter schools last year you only caught the downstream funding portion. But there’s another part of the campaign – the upstream funding part – that goes on for years and involves millions in set-up funds and temporary faux reform organizations. But it all comes back to the same handful of plutocrats controlling the upstream and downstream money. Here’s how it works.

Upstream Money

Upstream money comes in the form of grants from charities organized under Internal Revenue Code 501(c)(3), which largely prohibits such organizations from any political spending. You might think that would keep 501(c)(3) money out of school politics but the prohibitions are easily evaded by funding favorable research studies, “educating the public,” and founding advocacy and organizing fronts. Money contributed to a 501(c)(3) is tax deductible. This money shows up a year or two before the real target, which would be a lobbying effort or ballot measure campaign.

Upstream funders are those like the 501(c)(3) versions of Stand for Children and Families for Excellent Schools. Stand prepared the way  in 2011 for the 2012 ballot measure aimed at retracting teachers’ unions’ seniority rights (later settled in the legislature). In 2015 Families for Excellent Schools organized, advocated, and lobbied for legislative passage of charter schools legislation, and paved the way for the 2016 Question 2 ballot campaign.  Both Stand for Children and Families for Excellent Schools received major funding to launch their campaigns from Boston based 501(c)(3) Strategic Grant Partners and from several of the Partners themselves through their own 501(c)(3) (remember, tax deductible) family foundations.

Downstream Money

Downstream funders are 501(c)(4) “social welfare” charities that can have some political involvement and can keep their donors secret; they are wonderful vehicles for channeling dark money into candidate races via SuperPACs and into ballot races.

Stand for Children, when it prepared for the 2012 ballot campaign, formed a Massachusetts ballot committee and funded it with contributions from the 501(c)(4) version of Stand for Children. And where did that money come from? Almost certainly from several of the contributors to Strategic Grant Partners. (Sadly for them 501(c)(4) contributions are not tax deductible). Then we have the 501(c)(4) version of Families for Excellent Schools, which formed the ballot committee Great Schools Massachusetts and poured over $17 million in dark dollars into the committee. It looks like Strategic Grant Partners drove those millions too.

It’s a simple formula. The 501(c)(3) versions of Stand for Children and Families for Excellent Schools can “launch” a so-called reform front, open offices, hire staff, do advocacy, conduct outreach and organizing, appeal to legislators, etc. This happens a year or two before the election year they are targeting.  But 501(c)(3)s can’t give big bucks to ballot committees so late in the year before the ballot campaign the 501(c)(4) versions of Stand for Children or Families for Excellent Schools form ballot committees and register them with the Office of Campaign and Political Finance. The ballot committees handle all the necessary political functions, but they’re really just a legal shell for the 501(c)(4) dark money operations. The funding almost certainly comes from the same big buck philanthropists. 

2017: An Upstream Kind of Year

This year there is no statewide election so cast your gaze upstream. Strategic Grant Partners has funded a 501(c)(3) named Educators for Excellence, which exists to weaken unions by siphoning off younger teachers. SGP is also funding Leadership for Educational Equity, a campaign school for Teach for America alumni. So watch for new candidates who favor privatization (this will give Democrats for Education Reform new aspirants to toss money at).  In turn LEE is funding an organization called Boston Education Action Network, which is attempting to organize Boston teachers and parents. Then there is Massachusetts Parents United which enjoys strong ties to Families for Excellent Schools and Democrats for Education Reform. MPU is the agent for the Walton Family Foundation and Longfield Family Foundation; both families helped fund the Question 2 campaign last year.

Name That Stream

Upstream money, downstream money! 501(c)(3)s and 501(c)(4)s! Charities and Social Welfare Organizations! And so many here-today gone-tomorrow community based fronts cropping up with really “Excellent” names! How to keep track of them?

We don’t have to keep track of them. Just remember the Walton Family Foundation and Strategic Grant Partners, especially the Jacobson and Klarman families. We'll see them again, downstream.

The Washington Post recently adopted a new slogan: “Democracy dies in darkness.” I agree.

[Full disclosure: as an educator in the UMass system, I am a union member. I write about dark money (and other things). I don't write about education policy.]