Public Good, Private Money

Businesses, nonprofits and communities are turning to private dollars for help in establishing free community college programs.

April 21, 2016
Detroit Public Schools Foundation

Momentum for passing a national free community college program may have slowed, but businesses and private donors are picking up the slack.

While state movements to increase access to college in several localities, such as in Tennessee, have generated headlines across the country, many locally based “promise” scholarship programs are funded by private dollars and donations.

At the Kalamazoo, Mich.-based W. E. Upjohn Institute for Employment Research, Michelle Miller-Adams estimates there are about 80 local, place-based scholarship or promise-type programs across the country. The programs vary in how much funding they award students or which requirements they mandate for students to receive funding.

“Almost all of them are not publicly funded … for the most part, these are private endeavors,” said Miller-Adams, a research fellow at the Institute.

Michigan's well-known Kalamazoo Promise is one of the first of these programs, which typically tap donor money to help local residents pay for college. It so far has raised about $70 million in anonymous donations. There's also a promise program in Grand Rapids for one high school that has raised $30 million through a community foundation. Then there are companies like Murphy Oil Corporation, which set up a $50 million endowment for Arkansas’ El Dorado Promise, which provides scholarships to send El Dorado School District graduates to any two-year or four-year public or private college in the country.

Murphy Oil wanted to attract top hires, which can be difficult in rural areas, said Sylvia Thompson, executive director of El Dorado Promise, during a meeting of the Campaign for Free College in Tennessee.

Thompson credits the promise program for El Dorado’s high percentage of graduates who enroll in college. Eighty-five percent of El Dorado Promise Scholars -- or graduates eligible for the program -- enroll in college compared to 63 percent of graduates in Arkansas, she said, adding that if students have other scholarships, the promise can be used for books, room and board, or other needs, although the amount of funding is capped for students who choose an out-of-state college. 

“The business community is seeing the value in having better-trained, better-educated graduates locally,” said William Moses, managing director of education for the Kresge Foundation and a member of the White House's College Promise Advisory Board. “Elite institutions, they’re important and the crown jewel in American education … but very few people are going to the top 50 liberal arts colleges.”

The business community is realizing that baby boomers are retiring and they can’t just depend on high-skill foreign workers or move companies overseas, Moses said. “That’s really why there’s interest in these programs. What can we do in our community if Washington is deadlocked on this? They’re asking, what can we do here?”

And a lot of communities simply don’t want to be left behind, so they’re encouraging their residents to make donations to promise programs in an effort to signal to employers that these communities can produce educated workers, he said.

In El Dorado, the movement came from the business sector. But in Pittsburgh the promise program launched when the mayor and school district went to the city’s largest employer for a $100 million challenge grant, Miller-Adams said.

Los Angeles’s mayor announced last week that the city will partner with the K-12 school district to establish a program to make one year of community college free. Mayor Eric Garcetti said the city would commit to raising $1.5 million for the program, which is expected to cost $3 million per year.

Last month, Detroit’s mayor announced the creation of the Detroit Promise, which has existed for the past three years as a scholarship program before receiving the state’s “promise zone” status. Michigan requires promise-zone programs to be funded through donations for the first two years. By 2018, the Detroit Promise will be funded by tax increment financing, which allows the program to receive half of the growth in state education tax revenue within the zone’s boundaries.

“Our Legislature decided that our community has to show they can support the promise with philanthropy … that’s unusual,” Miller-Adams said.

One of the philanthropies to pledge donations to the Detroit Promise is the Eli and Edythe Broad Foundation, which has pledged $1 million.

“Eli and Edye Broad attended Detroit public schools and credit public education as the foundation of their success. As a result, the Broad Foundation works to ensure that all students have access to a great public education,” said Gregory McGinity, executive director of the foundation, in an email. “K-12 public schools must prepare students for college, and every student deserves the opportunity to attend college. But for many students -- especially those from low-income families and communities of color -- the cost of college stands in the way of their dreams.”

Miller-Adams said it’s important to note that most of these programs are last dollar, meaning they provide scholarships after all state and federal financial aid, like Pell Grants, are taken into account.

“Detroit Promise will send students to five of the area’s community colleges, but almost all students from Detroit public schools are eligible for Pell Grants, so the program costs very little,” Miller-Adams said.

Some foundations have found other ways to show their support. The Lumina Foundation, for instance, isn’t financially supporting a promise program. But the foundation is providing insight on how to help communities organize these programs and expand them on a larger scale.

“We don’t fund scholarships and a lot of that is because we’re looking for system change that comes from changing systems,” said Haley Glover, a strategy director at Lumina.

But at the heart of figuring out how to fund promise programs is whether higher education is a public or private good, Moses said, adding that some of the oldest colleges in the country have been public institutions, but in the last several years we’ve seen an erosion of the public-good idea.

“If you want the outcomes that were seen in the post-World War II era, you’re going to have to invest in higher education,” he said. “I’m sure there will definitely always be some philanthropically supported programs, but can we also get more government support as well? Fundamentally, do we want a society where only wealthy people can go to college?”

About 10 states have some type of bill currently pending in their legislatures for free community college programs, according to the National Conference of State Legislatures.

Glover said she’s uncertain whether these local promise programs will ever succeed at the broad, statewide level like Tennessee’s.

“If you look at Michigan, it has a pretty neat policy in place that enables regions and local communities to raise dollars to leverage the promise,” she said.

There’s no doubt that the local promise programs, often funded by donors and businesses, have inspired the larger state movements and President Obama’s America’s College Promise.

“This is how things change in the U.S. Things pioneer at the grassroots level and bubble up to the states and federal government,” Miller-Adams said.


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