How Can Investors Respond to Inequities in Education?

Audio Description

Fall has been fraught with uncertainty this year, as schools grapple with the best way to meet students’ needs. But the impact has been uneven as fewer low-income students consistently log in for remote instruction. As the pandemic threatens to widen the achievement gap, which already costs the US economy up to $700 billion in lost productivity per year, how can investors respond? Experts from DonorsChoose and the DC Charter School Alliance explore this pressing topic—including inequities in school funding, unconscious bias, and culturally relevant curriculums—along with proven private-sector solutions.


00:00 - 00:07

Welcome to On Purpose. I'm your host, Travis Allen, Senior Investment Strategist and National Director of Purpose Driven Strategies.

00:12 - 00:22

Today's episode draws from a virtual panel we recently hosted that explored deepening educational disparities and the proven private sector solutions that address them.

00:22 - 00:57

Our guests included Eric Glass, portfolio manager for AB's Fixed Income Impact Strategies. We were also joined by Jinan O'Connor, the VP of advocacy and public partnerships at DonorsChoose, and Shannon Hodge of the DC Charter School Alliance. To open the discussion, Jinan and Shannon explained how each of their organizations helps to create more equitable outcomes for students. We are a nonprofit, we are a charity, and we are an online platform for teachers to post projects or things that they need in their classroom.

00:57 - 01:31

Teachers submit an essay requesting what they need, post it on our website, and then donors, the majority of which are citizen donors who have never given to public schools before, we love that, can choose what projects they'd like to support. We don't send cash. We purchase the project materials and send them to each school. And I believe a few members of the Bernstein family donated to projects last week and became donors too, citizen donors. So that's exciting. We're working to close the equity resource gap. There's a lot of talk about gaps, and that's the one we hear about. Opportunity and resources and equity resource gap,

01:31 - 01:36

that's what we're focusing on. The majority of our projects funded are going towards students who need it the most.

01:36 - 01:48

If students are in high income districts, chances are they have strong PTAs and we are working to equalize that. The executive director of the School Superintendents Association calls us the PTA equalizer.

01:49 - 02:19

This past July, I transition to a new role as the head of the DC Charter School Alliance, which is a membership organization that advocates on behalf of the charter community with the goal of making sure that all students in DC have access to high quality schools. About 43 percent of public school students in DC attend charter schools, which is about 44,000 students. There are one 128,000 charter schools in DC, so there are a lot, there are a lot of students in them, we are a large charter community, and it's important that we're serving all elements in that community.

02:19 - 02:38

About half of the students in DC charter schools have been designated by the city as at-risk, which is compared to about 48 percent in the district school system. We have the same percentage of students with disabilities as the district school system does. We have a higher percentage of Black students, which at 78 percent, and the district school system does at 68 percent.

02:38 - 03:02

So we take very seriously this charge to educate all students in the city and two things that we're trying to do at the DC Alliance to serve this particular need is to advocate on behalf of the entire charter sector to make sure that the freedom and flexibility that charters need to thrive are there, to make sure that charters have access to facilities, which, of course, is important for schooling, and then funding, which, of course, we all know is necessary.

03:02 - 03:37

Both Jinan and Shannon work closely with educators. So I asked them about the strain that the pandemic has put on schools, students, and faculty members. I wondered how concerned we should be that preexisting inequalities appear to be getting much, much worse during this crisis. How concerned should we be? Very. There's an adage that's out there that when White people get a cold, Black people get the flu, well, the country has COVID. So the disproportionate impact of COVID on Black and brown communities has been tremendous. We see that in the schools. We see it in educators serving those schools.

03:37 - 03:43

Everywhere you look. It is tremendous just to see how differently COVID has hit communities.

03:43 - 04:07

There was a parent survey in DC fairly early on in the pandemic asking about whether families wanted students to return to school. And it was a clear divide so that your more affluent families were ready to have students go back to school and in September, we all were ready to have kids go back to school. But your Black and brown families and your lower income families were not as ready, right? They were more likely to have people in their families who had COVID, who died of COVID.

04:07 - 04:39

They were essential workers who were out there riding public transportation, who were kind of putting themselves at risk every day. And I don't know how much that has really changed. We are definitely concerned about how school leaders, how teachers, how do school staff, parents, and students are coping during this time. Super comprehensive answer. I love data so I'm going to add a couple of numbers to just what Shannon will share with you. And I also want to say the same thing. We should be concerned. We should be concerned. I think we can also be inspired a little bit if we do it right.

04:39 - 05:11

We're asking teachers to educate students who are living through the civil rights era, a pandemic, wildfires, hurricanes, tornadoes, all while working through their own emotions connected to each of those emergencies. So it's not just the students, it's the teachers. It's every human being involved. A couple of studies that I want to just share with you and really reinforces what Shannon was saying. A study by the Successful Practices Network and Center for College & Career Readiness found that in the schools that were forced to close due to coronavirus, students were on track

05:12 - 05:16

to lose about five months of their potential reading growth. That's huge.

05:16 - 05:49

We also have to mention food insecurity. Brookings study survey said that one in five families say that their children don't have sufficient food and that parents don't have the means to get them that food. At DonorsChoose, we recently conducted a survey ourselves of 1,000 teachers, and teachers are really concerned about the pandemic in that it will widen the educational equity gap. Only 7 percent believe that online learning is even effective. And kids from lower income households are less able to participate in online learning. And of course, that widens any gap that we're talking about.

05:49 - 06:08

Eighty-one percent of teachers expect that schools will have to close at some point in this year and they'll have to shift to online learning because of COVID. And 47 percent of those teachers are going to have to balance online learning within classroom learning, and some of them doing it simultaneously, having a screen in front of them with kids at home and having a room full of children in front of them as well.

06:08 - 06:33

Districts are doing the best they can to get devices into everybody's hands, but the challenges go much further than that. If you are at home and there is multiple kids and you have connectivity issues or bandwidth challenges, when you have multiple kids on the, on technology at the same time, not alone a parent who's at home also on the technology, and we're having, we're finding that students are having to take jobs during the day to support families or they're having to take care of their siblings.

06:33 - 07:00

And for some students, it's just a matter of sitting in front of a computer all day long is just not really going to jibe with them for any kind of learning. It doesn't go with their learning style. In addition to that, we can't forget about the 55 percent who are really worried about the impact of civil unrest related to racial justice and what effect that's having on students and teachers in low-income communities are more likely to worry about their students being impacted by racial inequity than those in wealthier communities.

07:00 - 07:19

The good news is, a little bit of inspiration is that many teachers and district leaders are taking this as an opportunity to rethink how school is done and what is most needed to be for school success, what's most visible success. This is a time when we're seeing teachers being the most innovative that they've ever been.

07:19 - 07:48

Teachers, there's a teacher onsite who requested reusable bags for her safe weekly curbside library, or a teacher who has asked for a button-making machine so that she can create buttons of everybody's faces because the kids don't know what each other look like under their mask because they're wearing masks all day. So amidst all this, there are bright spots under the anxiety and the uncertainty and the nervousness. Teachers are feeling hopeful and optimistic, and they're sharing stories of being able to better customize learning for their students.

07:48 - 08:18

And some are even talking about building stronger relationships with parents. So those are some areas where we see bright lights. And this is the time where we have to not think about, oh, I can't wait for it to go back to how it was. We can't afford forever to go back to how it was. We have to take everything that we're learning right now and incorporate it into how we're going to educate in the future. Then, Eric joined the conversation, sharing what he looks for as he aims to make investments that reduce inequalities in education. Within education,

08:18 - 08:51

our intention is to reduce an opportunity gap. There is a direct opportunity gap in terms of the actual physical environment, the schools themselves. As mentioned earlier, just in terms of infrastructure and state of the art, our goal is to inject state-of-the-art facilities to school districts that have historically not had them. Let's take a step back and think about that. There are so many school districts throughout the country where the average age of a school building is 60, 70, 80 years old. And it's not because they're historical landmarks or architectural marvels. It's because they're old.

08:51 - 09:15

And I think when we talk about equity in schools, it's really important to understand is, what does it say to a child that has to go to school there? What does it say to a teacher that has to teach there? I mean, from my perspective, I don't think this is a big leap of a conclusion. It's like, you don't matter and you're disposable. And as an impact investor, that's repugnant and repulsive. That's not something that we can stand by and see happen.

09:15 - 09:30

And so we're making thoughtful, holistic investments in infrastructure to reduce that opportunity gap. And there's a whole bunch of science now that suggests that there is a direct positive correlation between state-of-the-art facilities and outcomes.

09:30 - 09:54

He also outlined the different analysis he applies when looking at municipal bonds that have a social impact. Fundamental financial analysis is still involved, but it goes beyond that, as Eric explained here. It's sort of like, well, let's look at different metrics and key performance indicators that are highly correlated with positive impact to all kids and community, et cetera, et cetera.

09:54 - 10:11

So we are looking at attendance rates. It's pretty hard for kids to learn anything if they don't attend school. Right. What's the graduation rates? What's the percentage of students going on the two year, four-year career technical education, but also looking at such things as truancy rates and suspension rates. What is the use of

10:11 - 10:30

restorative justice? What we see is kids of color are suspended at inordinately higher rates than White children, and there's a real thing called the school-to-prison pipeline. And how are these institutions incorporating restorative justice in trying to interrupt the school-to-prison pipeline?

10:30 - 10:53

And so these are questions that we ask. Another question: What is the racial and ethnic makeup of your teachers? Because we know that if there's someone in front of the classroom that looks like you, the likelihood of you completing your studies and persisting in school is significantly higher. What are institutions doing to recruit, hire, and sponsor teachers of color?

10:53 - 11:28

We then pivoted back to learning amid the pandemic. We know that in the spring, schools initially struggled to help their neediest students. To avoid a repeat scenario, I asked which key takeaways around distance learning are being applied this fall. I was particularly interested in Shannon's take since until recently, she was running a charter school in Washington, DC. I think one of the major lessons that we learned is that you have to take care of Maslow's needs first. So just the basics of making sure that students had shelter, that they had food, that they felt safe and secure before any learning took place. Hindsight's 2020. Right.

11:28 - 11:45

So March 16th, I think, is the last day of schools here in DC, and we were all expecting March 17th, just everyone just ready to hop into digital learning and we're all distance starting. It'll be great! Not taking a step back to realize, wait, we're in a global pandemic right now, like people are dying who may live in your house, like there may need to be some attention to that.

11:46 - 12:06

So I think you see much more now of schools attending to that, whether they have assigned counselors to students preemptively, whether they have support staff who are connected to parents and families. Some schools are doing like weekly parent check-ins, just like focus groups and town halls with parents, just to make sure that people are OK and have what they need. I think the other thing is the importance of innovation.

12:06 - 12:26

Just echoing a comment earlier from Jinan. I think, because we thought, oh, it's 2020, people have Internet access, people have devices, we can just flip over to distance learning, no problem. But we are still, even in DC, and I'm sure in other places, still trying to figure out Internet access at home, Right, in September. That flip to distance learning was not as quick as people anticipated that it would be.

12:26 - 12:50

And so I think you really see coming out of that and understanding of the need to be innovative, a need to be flexible. And really understanding more the time, resources, and personnel it takes to pull off distance learning. The digital divides are real. I've certainly been on many calls with families who are six people on one hot spot, six different places, whether it's work and school, trying to make that work. And so really understanding now what it takes to make that happen.

12:50 - 13:07

I know in DC the vast majority of charter schools just actually purchased Internet access for their students because they recognize that was an essential element of making distance learning work. And they purchased it, whether it's hot spot or themselves paying cable provider bills so that families could have that basic necessity.

13:07 - 13:32

We've also learned that distance learning actually works better for some students. I know that there are many parents who want the schools open right away, but there are also some students who, things are a little bit easier for them because they're able to maybe work asynchronously, or perhaps they have competing demands. And so I would love for us to, a year from now, come back and figure out who distance learning worked for, and how we can continue that to better educational outcomes for students.

13:32 - 13:54

And then the last thing I'll say is that the schools have really learned again, not that it was a new lesson, but seen it in new ways, the importance of engaging their communities genuinely, because with so much information out there about what schools should be doing, so much competing information, so much changing information, for many schools, the way they answer the questions of what will we do is to turn inward to their communities.

13:54 - 14:13

So what do you need? How can we serve you? And so that responsiveness, I think, I hope is the main thing that we take away because the information is going to keep flooding in. So for schools to really be able to look to their communities to help decide what's next has been tremendous. Sometimes it feels like the resources needed to provide equal opportunity are so vast.

14:14 - 14:48

So I asked Eric, given the size of the problem, how does he decide where to invest? With a national portfolio, how do you determine where you will have the most impact? Since we are focusing on historically under-resourced and low socioeconomic status communities, the first thing that we look at is, we have a metric, free and reduced price meals, right? So we won't invest in any school district that doesn't have at least 60 percent of its enrollment qualifying for free or reduced price meals. Right. So that filters the universe quite a bit from a national perspective. That's where we start.

14:48 - 15:19

And thanks to people like you, Travis, and financial advisors, we can make investments nationally because money keeps coming in. So we don't necessarily have to choose between district A and District B. We can invest in both district A and District B because they're doing some really wonderful and impactful things. So when we talk about how we pick and choose the investments we make from an education perspective, that also has a lot to do with our inquiry. That requires a certain degree of disclosure and transparency, and that's something that we have to have, or we just don't make that investment. So it's pretty binary from that perspective.

15:19 - 15:42

And once we have a district or a charter school that's willing to engage with us, it is really sort of getting into issues that, you know, not a whole heck of a lot of other people are talking about. How do we center culturally relevant curriculum, culturally congruent curriculum? What is this institution doing to detect, protect, and advocate on behalf of kids, just in terms of safety, just physical safety of children?

15:42 - 16:08

What is this institution doing to address its carbon footprint and make sure that kids aren't going to school where there is an inordinate amount of mold or lead is leaching into the water from the water fountains or there's lead paint, etc., etc. We're seeing way too many stories around the country where schools are literally being shut down because the conditions, the physical conditions of those schools cannot justify having anyone in that environment.

16:08 - 16:41

And that is just horrific. And so what is the average age of the school district buildings? If they're five, 10 years old, well, chances are those are pretty modern. If they're 100 years old, that's a very different story. And that's kind of what we're trying to identify and to specifically invest in. While Eric spoke about the physical conditions of schools, we turned back to Jinan to talk more about social and emotional learning. In many ways, Black and brown children continue to be ill served educationally and emotionally in many school environments.

16:41 - 17:08

Jinan pointed to concrete steps that DonorsChoose has been taking to address the issue. Two quick stats, before I give you some concrete steps, is that 50 percent are worried about the lack of interaction with classmates that's happening right now, and 30 percent are worried about physical and mental health challenges that are happening right now. And 25 percent of teachers still report needing food and personal items for students at home. So we're talking about being a teacher in a different way that we've never talked about before.

17:09 - 17:10

So what can we do?

17:10 - 17:38

What are some concrete steps? Now is the time to form partnerships, partnerships with local districts or partnerships with districts you care about. They might not be your local district. I'll give you some examples of how we've been doing this, and you can follow along and try some of these at home. We created a partnership with Bryan Stevenson and the Equal Justice Initiative for projects that request the book Just Mercy. And alongside other books on a special list on racial justice.

17:38 - 18:06

We have a campaign that we've done along with called I See Me, and that's to uplift the diverse identities of teachers and students in classrooms and to support Black and Latinx teachers, women STEM teachers, as well as really any teacher seeking materials to make classrooms more inclusive. On our side, we have 22 vendors that we work with and we've added Mahogany Books, which is a Black-owned bookstore, into our vendor lists. So as books are being requested, they're just going through Mahogany books.

18:06 - 18:21

Some of our corporate sponsors like Chevron and Samsung are really interested in STEM projects that are online. And in addition to helping teachers teach about these topics, we're also helping teachers grapple with teaching in the midst of some of these challenges.

18:21 - 18:42

Right. So if you're thinking about what you can do, there's other things going on. We do work around disaster recovery efforts because imagine teaching while their building is on fire from a wildfire, or your building has been demolished because of a hurricane or a tornado or a storm like Hurricane Harvey, you remember that back in 2017 that wiped out Houston.

18:42 - 19:00

These are all areas where these are examples of partnerships that are formed that are based on the specific needs of schools and districts. But partnerships is the way to go right now. And it's at a time when districts and communities are looking for people to partner with them and step in and help in ways that they haven't before.

19:00 - 19:32

And one other thing I want to add to that is just the other thing that we've done internally as an organization is we also have looked at our mission. So now is also a time for people to reflect in whatever business role that they have, and think about how does your mission reflect equity or not reflect equity. And for us, we're now at a point where we're making the implicit explicit. We underlying always have equity in our back of our minds. But now we're saying it out loud and we're going from beyond just income inequality to racial inequality too, and talking about how those things are hand in hand.

19:33 - 20:07

Eric also shared his thoughts on concrete ways that we can address the social emotional needs of students. I think that when we talk about equity in schools, I think it's really, really important that we understand that for certain communities, particularly for communities of color, there needs to be a continuum of care. There needs to be wraparound services. There needs to be more a holistic approach to education. It's not just achievements and outcomes. The success that we have from an education perspective is not just going to come from achievements and outcomes, and particularly in this time is an incredibly traumatic time for so many communities.

20:07 - 20:31

And we haven't even, Jinan talked about Houston and flooding, and we haven't even talked about the environmental injustice that occurs largely in so many of these communities, but it's really sort of coming to and meeting kids where they are and making them feel special and feel comfortable in the environment that they're working and learning in. And having this conversation is important, but it's only meaningful if listeners take something away to act on.

20:32 - 21:06

That's why in closing, I asked each panelist, what can our audience do to help make equity in schools a reality? One thing I think that everyone can do tomorrow is find out what the under-resourced schools around you need. So in the midst of COVID-19, a lot of cities' kind of educational funds, their fundraising arms have tried to solve issues resulting from inequity, whether it's the digital divide, whether it's lack of access to groceries. They have been standing up organizations and standing up efforts to put resources in the hands of students and families and schools.

21:06 - 21:12

And I don't think you have to kind of start your own program. They are out there. So just ask and see what supports are needed.

21:13 - 21:46

We know many of the things that our families need and we have reached out and are always looking for partners who want to help connect families with resources. Taking a slightly longer-term view than that, I think we have to think more creatively about what success looks like. One of the lessons that we've learned from COVID is that the things that we thought were most important in most immoveable, like college admissions testing, for example, may actually not be that important. It's causing us to rethink what success looks like. It's causing us to rethink the gates that we put in place that may exacerbate inequities. And so there's a longer-term view.

21:46 - 22:16

I think we have to take a step back and really think about what we're looking at for success. And the last thing I'll say is that we have to recognize and support innovations that address inequity. We often fall into the habit of rewarding and investing in what's familiar and what feels like to us the right thing based on our experiences and what happened when we went to school 20 years ago or 30 years ago or 60 years ago. But if we're really going to solve problems that have been here for decades, we're going to need things that look different. And so there may be some level of discomfort.

22:16 - 22:40

It may feel unfamiliar, but maybe that's the sign of what we should actually be investing in and actually paying attention to. Yeah, I think this is a time where we have to focus on whole child. I mentioned before, like, we can't go back to the way things were. We have to take what we've learned and apply it to how we're educating children moving forward. On September 16, we celebrated our 20th anniversary, as I mentioned. That's significant.

22:40 - 23:03

And I want to mention it because on that single day, 30,000 people showed up on the DonorsChoose website to support public school teachers. Thirty thousand on one day, so people are hungry to help. People are hungry. I'm going to rattle off a list. So get your pens, pencils ready. And this is a mix of short-term and long-term things that could happen. There's no, this is in no particular order.

23:03 - 23:34

But people can support professional development for teachers around racial justice and social emotional learning. Shameless plug, they can come to DonorsChoose and look up their own teacher or their old school, whatever, and look for classrooms to support. But outside of that, they can support the increase of the number of school social workers and psychologists. Schools are dying for this even before the pandemic, and has really shown now that we need to have social workers and psychologists in schools. We're talking about the mental pandemic and there are schools that have no nurses, like, forget social workers and psychologists,

23:34 - 23:44

there are no nurses in schools, things that some of us take for granted. You can help cover the cost of COVID testing. You can reach out to districts who have the largest food insecurities and see how to help alleviate those.

23:45 - 24:14

You can connect schools with companies that have Wi-Fi hotspot programs. You can reach out to district administrators, as Shannon was just saying, and say like, how can I help? I want to help. How can I help you? You can support programs that help level out the imbalance of teachers of color and the impact that that has the students of color. You can think about tutoring services. There's a huge equity gap in tutoring services and who gets tutoring and who doesn't and therefore who automatically jumps the line and goes ahead. So help level the quote unquote playing field then.

24:14 - 24:43

If you're feeling even more inspired to do that, to do something even on a larger scale and measurable social impact, I'm happy to have conversations with people, conversations with people offline. I think from my perspective as an investor, I'm charged with basically helping our clients in a way sort of think, be more thoughtful and holistic in their approach to investing. And so ask the question, where are my investor dollars going? Who am I investing in? What is the result of my investment and how am I,

24:43 - 25:00

this sounds kind of goofy and kumbaya, but how am I adversely or positively impacting local communities with the investments that I make? That is all I could ask from any investor in this moment is to be a little bit more thoughtful and truly sort of question where your investments are going.

25:00 - 25:31

So I'll leave it at that. This has been On Purpose. Thanks for joining us. And remember, we all have values we hold dear. Now you can ensure your investments reflect them. You can reach me on LinkedIn. If you enjoyed the podcast, please rate us on Apple Podcasts, Spotify, or your podcast service of choice, and be sure to subscribe. Thank you again. Bernstein: Making money meaningful for individuals, families, and foundations for over 50 years. Visit us at

Travis Allen
Managing Director

The information presented and opinions expressed are solely the views of the podcast host commentator and their guest speaker(s). AllianceBernstein L.P. or its affiliates makes no representations or warranties concerning the accuracy of any data. There is no guarantee that any projection, forecast or opinion in this material will be realized. Past performance does not guarantee future results. The views expressed here may change at any time after the date of this podcast. This podcast is for informational purposes only and does not constitute investment advice. AllianceBernstein L.P. does not provide tax, legal or accounting advice. It does not take an investor’s personal investment objectives or financial situation into account; investors should discuss their individual circumstances with appropriate professionals before making any decisions. This information should not be construed as sales or marketing material or an offer or solicitation for the purchase or sale of any financial instrument, product or service sponsored by AllianceBernstein or its affiliates.

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