The Magazine

An Offer They Could Refuse

Why Detroit teachers' unions spurned a $200 million donation.

Oct 3, 2005, Vol. 11, No. 03 • By HENRY PAYNE
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Detroit

ROBERT THOMPSON wanted to give away $200 million to help children escape some of America's worst public schools. But for three years the successful businessman turned education philanthropist suffered the wrath of Michigan's Democratic establishment for his politically incorrect charter-school proposal. Then finally in August, Thompson found an ally willing to accept his charity. The nonprofit Skillman Foundation will join him in creating the first of 15 planned charter high schools in Detroit. The schools' goal is a "90/90 system"--that is, a graduation rate of 90 percent (up from the city's current 50 percent) and a college admission rate of 90 percent.

In the wake of Hurricane Katrina, New Orleans has become a metaphor for what Newsweek calls the "enduring shame" of American poverty. Embraced by Democratic politicians and their allies in the media, this "other America" exists, we're told, because of Republican tax cuts, corporate greed, and a political system that rewards the wealthy at the expense of the poor.

But in Detroit--a sister city to New Orleans in its black cultural heritage as well as in high poverty and crime--the experience of Robert Thompson reflects a very different reality. Here, rich "conservative" businessmen are acutely aware of America's underprivileged and have been rushing expensive, progressive solutions to the sinking inner city. Blocking the doorway, however, are the very "liberal" institutions that claim to be advocates of the poor.

For thirty years, Detroit has been hemorrhaging population as a result of high crime, high taxes, soaring insurance rates--and a crumbling system of public education, which has left Detroit's adult population with a staggering rate of functional illiteracy (47 percent, according to the federal government's National Center for Education Statistics). This leaves a shallow employment pool for any enterprise looking to locate in the city.

Seeking educational alternatives, state Republicans--against fierce opposition from teacher unions and Democrats--succeeded in passing legislation in the 1990s authorizing charter schools. These public schools are governed independently of local school boards; each is sponsored by a city or a university, and most are nonunion and have a distinctive educational approach. Since then, 39 charter schools have opened in Detroit, yet the number of Detroit families on charter waiting lists is estimated in the thousands. Moreover, most charter schools serve grades K through 6 (elementary schools are the cheapest to build), which leaves a crying demand for high schools.

In 2002, Republican governor John Engler answered parents' pleas for aid with a push to bring 15 more charters to Detroit. Enter Robert Thompson.

A Michigan farm boy who later taught school in Detroit, Thompson went on to found the state's biggest asphalt paving company, working out of the Detroit suburb of Plymouth. When he sold his company in 1999 for $461 million, he and his wife, Ellen, created the Thompson Foundation, dedicated to helping Detroit's poor. They first funded University Preparatory Academy, a successful K-12 charter school with a 90/90 system that is the model for the high schools Thompson now wants to build.

Thompson credits his own success to the education he received, and he is determined to give Detroit's poor the same opportunities. "The only way to get those kids out of there is through education," says the soft-spoken Thompson.

IN DETROIT, officials reacted to Thompson's proffered $200 million not with gratitude but with rage. The Michigan Federation of Teachers urged a walkout, declaring a school holiday so that union members could march on the state capitol in protest of charter schools. State Democrats cowered before the union, while Detroit's politicians bristled at a white suburbanite's "meddling" in the city's affairs. Detroit mayor Kwame Kilpatrick--whose own children attended a charter school--responded to Thompson's offer by saying, with a dismissive wave of the hand, "Let us make the rules, and if he can't abide by the rules . . . "

Says Thompson, "We thought if we tried to do good things, people would appreciate it. I guess we were naive." Shunned and saddened, Thompson withdrew his offer in October 2003.

Yet he persevered. "I thought, How can you change the world a little bit?" he says. "You can't let those kids down. You've got to figure out how to do this."

The breakthrough came in March 2005, when he received a call from another rich businessman with a passion for Detroit's poor: ex-Pistons basketball star Dave Bing.

Bing, an African American, later told the Detroit Free Press, "When I heard how Bob was treated, it just didn't make sense to me. I knew there was a need. From a selfish standpoint, as a businessperson, I need educated people on my work force. I'm not anti-public schools. But I don't think they will fix public schools quick enough to stop the drain. And if parents and children don't have other options, it's a lose-lose proposition for both the public schools and the city of Detroit."

Bing's color was a powerful political asset for Thompson, and together they approached the Skillman Foundation, a black-run nonprofit that has long worked with Detroit's public schools. Even so, Bing and Skillman came under immediate fire from Detroit liberals.

A group named the Call 'Em Out Coalition gave Bing a "Sambo Sell-Out Award" at its annual dinner for partnering with a white businessman. The award was bestowed by Democratic City Council member Sharon McPhail. And the Detroit Federation of Teachers expressed its displeasure with Skillman by threatening to end its cooperation with the foundation on other city school projects.

Nevertheless, under the Michigan charter-school law, the Skillman Foundation can now proceed to implement Thompson's plan. Detroit's poor should soon see the benefits of his gift--despite the blindness of the city's leadership.

If New Orleans is a lesson in the consequences of decades of governance that left too many destitute in the inner city, then Detroit is a lesson in how hard it is to bring reform to such cites. If Democrats continue to favor the interests of unions over those of children, the cycle of poverty will capture another generation in the inner city.

On the other hand, if they wise up, real opportunities for change exist. Across America, Thompson has counterparts, wealthy businesspeople bankrolling urban reform. The likes of Amway's Dick DeVos (another Michigan multimillionaire), Wal-Mart heir John Walton, businessman Ted Forstmann, GAP founder Don Fisher, and Netflix.com CEO and founder Reed Hastings have given hundreds of millions of dollars to the poor for scholarships and charter schools. After Katrina, cities should find a way to just say yes.

Henry Payne is an occasional contributor to The Weekly Standard.