Was Zuckerberg's $100M school gift a waste?

Facebook's CEO made a generous donation to Newark officials, but now there's very little to show for it.

By MSN Money Partner May 13, 2014 1:13PM
Credit: © Steve Jennings/Getty Images for MerchantCantos

Caption: Facebook CEO Mark ZuckerbergBy Caroline Moss, Business Insider

In fall 2010, Facebook (FB) CEO Mark Zuckerberg announced on Oprah that he'd be making a generous gift to Newark, N.J.

As Oprah said in her Oprah way, "one . . .  hundred . . . million . . . dollars" would be given to Newark Mayor Cory Booker and New Jersey Gov. Chris Christie as the three began the Startup:Education foundation. 

The plan was to turn Newark into what Zuckerberg (pictured) called "a symbol of educational excellence for the whole nation," spent on retaining the best teachers, and creating environments that would produce successful students and, one day, graduates.

Newark is a city wrought with crime. Its graduation rate is about 67 percent. It needed the help, and Booker's vision sounded promising.

Between 2010 and 2012, The New Yorker reports that "more than $20 million of Zuckerberg's gift and matching donations went to consulting firms with various specialties: public relations, human resources, communications, data analysis, [and] teacher evaluation." Many of the consultants were being paid upwards of $1,000 a day.

"Everybody's getting paid but Raheem still can't read," Vivian Cox Fraser, president of the Urban League of Essex County, was quoted saying.

Today, the money is pretty much gone, and Newark has hardly become that symbol of excellence. 

The New Yorker has the full 12-page story, and we've dug into it to find some of the main timeline points you need to know.

In 2010, Mayor Booker found a loophole in getting money to help fund Newark's educational reform. It came in the form of philanthropic donations, which, unlike government funding, required no public review of priorities or spending. Gov. Christie approved the plan, and Booker's job was to find the donors.

Meanwhile, in Silicon Valley, Zuckerberg (like many other tech billionaires) had pledged to donate half of his fortune, but as The New Yorker reports, he knew very little about urban education or philanthropy.

Booker and Zuckerberg met to discuss a vision for Newark's future. Booker wanted to significantly reward Newark teachers who improved student performance rather than focus on seniority and tenure. Teachers would be challenged and rewarded to do their jobs well, and students would benefit.

Zuckerberg was confident Newark and Booker were the right recipients for this huge gift (given over five years), and agreed to gift $100 million with a few stipulations: 
  • Booker would also have to raise $100 million. Zuckerberg's money would be released to Newark as matching dollars rolled in.
  • Booker would have to replace the current superintendent with a "transformational leader."

The reform ended up looking like this: taking low-performing public schools and closing them, turning them into charter schools and "themed" high schools. But there was no easy way to expand charters without destabilizing traditional public schools.

In the months following the gift announcement, Booker and Christie still had no superstar superintendent and no reform plan.

Zuckerberg was concerned and urged Booker to find the superintendent, even sending Booker a poster widely seen around the Facebook campus that read, "Done is better than perfect."

Immediately, Booker appointed Cami Anderson for the job. She implemented ways to help students and improve schools (all which The New Yorker detailed), but there were roadblocks along the way, like how the students brought the issues going on in their homes with them to the classroom.

Anderson wanted to give schools more support to help students on emotional and social levels, but Newark had already been spending more money per student than most districts in the entire country, none of which was reaching the children it existed to help.

New contracts were being created, money was being hemorrhaged, and the district was going broke. But interviews -- like this one in Forbes -- regarding the money and the future of Newark's schools were always positive, highlighting, of course, only the good aspects of the huge monetary donation.

Then, in January of this year, The Washington Post reported on "dozens of emails between the Zuckerberg camp (including Zuckerberg himself) and the Booker camp (including Booker himself)," which ended up revealing that state education officials were going above and beyond to get money from big private donors to remake public schools in the way they want to.

Anderson came up with another plan called One Newark, which sounded like it could work. Families would choose which charter or public schools they would want to send their children to. Children from the lowest-income families would get first pick. So would kids with special needs.

It all sounded great until parents and teachers realized it was only on paper. Solutions hadn't been figured out fully. Programs hadn't been developed. Issues like transportation had not yet been tackled. Things that were promised didn't come to fruition.

According to The New Yorker, Anderson, Booker, Zuckerberg, and Christie, "despite millions of dollars spent on community engagement -- have yet to hold tough, open conversations with the people of Newark about exactly how much money the district has, where it is going, and what students aren’t getting as a result."


You can read the full report from The New Yorker here.

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Tags: FB
May 13, 2014 1:38PM
I cant believe that throwing money at this did not solve several deep seeded cultural and economic problems. We should probably raise some more money to study what went wrong.
May 13, 2014 1:48PM
You can't fix a corrupt system with more money. It hasn't worked in the past and it will not work now.  It is disgusting that these idiots blew $100M and the taxpayers, contributors and children got nothing out of it.  If this isn't reason enough to get rid of teachers unions then you and your stupid illiterate kids deserve what you get.  Parents are just as much to blame if not more than the teachers and the unions.  Where the hell are the parents of these kids...baby daddy is nowhere to be found, even if the mom knew which one was the father, either way, neither one of the parents are around or care to make sure the kids are doing their homework, are paying attention in school, when was the last time one of these kids got their **** busted for an F on their report card? When was the last time mom or dad went to school to meet with the teacher?  Parents as well as teachers and administrators are failing the kids and the left wants to throw more money at the problem instead of growing a pair and identifying the real problem.....and it ain't money...that's right "aint"!
May 13, 2014 1:48PM
He willingly gave money to the Government of NJ and thought it would be put to good use?  Really.  A charter or faith based school would have used All of the money for the education of the children, not political buddies who run consulting firms.
May 13, 2014 1:45PM
Hey Zuck, you should've used the $$$ for all the young American tech grads you put out of work by lobbying for the relaxation of H1B visas...

Tech billionaires.....throwing $$$ at issues they helped create and expecting adoration.

May 13, 2014 1:58PM
So throwing money at schools doesn't eliminate the impact of a traumatic homelife.  Amazing.  It is a generational problem of dysfunctional families that causes these kids to be unable to focus on their educations.  How can they focus on their futures without feeling safe and loved at home with role models who show them what a family looks like?
May 13, 2014 1:35PM
You mean you can"t throw money at the education problem?  Then why do schools in my district constantly ask for more money?  Maybe $1billion would have made a difference?
May 13, 2014 1:55PM
This is so abhorrent it should ruin Booker's career.  What a disgrace.
May 13, 2014 1:35PM
May 13, 2014 2:22PM
May 13, 2014 1:54PM
Typical of both Liberals and unions.......
May 13, 2014 2:26PM
Unfortunately, Zuckerberg's idea was great but everybody has there hands in it & took generously   from the fund...like the $1,000 a day for consultants...REALLY!!!!  It is the same with the money for the Superstorm Sandy victims....all types of donations, superstar concerts, etc. raising MILLIONS & yet there is much to be done & the money raised has run dry....probably more consultants thinking & taking money needed for devastated houses & families.  What a SHAME!!!
May 13, 2014 1:49PM

Dear Mr. Zuckerberg:

It was very heartwarming to see that you were willing to try to help the education system.

Sorry that it looks like the money was "misdirected" or my personal favorite "misappropriated".

If you decide you want to try your hand at helping the small businesses on Main Street please contact me!

May 13, 2014 2:02PM

What an idiotic move on Zuckerberg's part.  Better off creating scholarships for universities or community colleges, invest in local/small businesses, give to numerous small/local charities that actually work.

I certainly hope he learned his lesson.

May 13, 2014 1:55PM
Poor little Zuckerschmuck, just another clueless, naive, left wing rich young fool thinking that a pig with lipstick is no longer a pig.  You could throw billions into the toilet that is Newark and it would just disappear and Leroy, Carlos would still not know how to add 2 and 2.  The politicians and the teachers and their unions would waste or steal every penny.  Yes indeed, liberalism is a mental disorder.  When will they learn? Never.  Amerika, it was great while it lasted.
May 13, 2014 2:25PM
WOW this is SHOCKING! The money is already gone?? LOLOLOL!!!
May 13, 2014 2:04PM
Where Zuckerberg went wrong, was to think that you can leave all the dept of education bureaucracy and incompetence in place, and thinking $100M was enough to work around the preexisting issues. 

I don't think education as a public institution can ever be as effective and productive as we would like. When public money funds an institution, there are just too many hands that control what happens, and the actual educating of the student population is the last thing on the list.  What we have left is that education has devolved into learning specific things that are tested on exams.  The kids really cannot reason, think abstractly, or extrapolate, only regurgitate. 

I would have invested the $100M into a set of new private schools that really cared about the students and children. 

Who is accountable for the failed education system? 
May 13, 2014 2:12PM
The public school system, better referred to as government schools, where students go for left wing indoctrination, rather than education, is a laughable failure, and will always be so.  The more money pumped into it, the WORSE it gets.  Let's abolish government schools, and the insidious teachers' unions, and establish a private system of education in America.
May 13, 2014 2:08PM
The "LOVE" of MONEY is the ROOT of all EVIL!!! 
May 13, 2014 2:08PM
Booker and Christi took the sucker Zuckerberg's money and gave it to their "consultant" friends and family!
Serves Zuckerberg right for trusting known corrupt politicians!

No corruption in Chris Chrisi's world, we all know he is a saint among sinners!  He probably has no idea what happened to all that money because he had someone else that took care of that!   He never does anything wrong, the people that work for him have made a few "mistakes" though! Christi can't be held responsible for what his workers do, he doesn't know what they are doing, so that makes him innocent of anything they do!  It's not his job to be watching what other workers do, he has much more more important things to do than to make sure his employees are doing the jobs they were hired to do.

I see no reason why Mr. Christi shouldn't be elected president!  He does a great job at blaming others and keeping his tail covered no matter what, so he has the needed qualifications!  Him and Booker would be a fine team to have as the POTUS/VPOTUS !!!   
Look how fast they were able to spend Zuckerbergs money and have NOTHING to show for it!

Corporate backed, corrupt, easily gets rid of other people's money, uses their elected office and state and federal resources for personal political gain and revenge against political competition, dodges responsibilities....etc., etc.
YEP they have all the qualifications to be POTUS/VPOTUS!! 

Christi/Booker 2016!

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