The Illinois Network of Charter Schools will continue to receive Walton Family Foundation money for its state-level policy work. File photo from INCS rally in October 2015. Credit: Photo by Stacey Rupulo

When the Walton Family Foundation began doling out hundreds of millions of dollars to launch charter schools in cities across the country, Chicago soon headed to the top of the list.

Just a few years ago, Walton spent more money to help start charters here than anywhere else in the nation. In large part, the money flowed in because of the presence of a powerful pro-charter mayor who controlled the city’s school system.

“We’re very confident in the city’s leadership, particularly the mayor, to help expand and strengthen the charter sector in Chicago,” the foundation’s then-deputy director of education reform said in 2013.

But now, a deep and seemingly intractable financial crisis, an unprecedented wave of public backlash against privately run charters and the district’s own slowdown of charter expansion have made Walton shift its course.

The foundation—which says it has given start-up funds to one of every four charter schools nationwide—is pulling out of Chicago. Between 2009 and 2014, Walton gave nearly $7 million in direct grants to charters in Chicago, including the UNO Network of Charter Schools and Urban Prep Academies, among others, according to tax records. (Another $8 million was targeted to fund state policy and advocacy work, and to start charters elsewhere in Illinois.)

“We take no pleasure in this,” says Marc Sternberg, Walton’s director of K-12 education programs. “When you look at the Nobles and the Perspectives and KIPPs in Chicago and the impact they’re having, and when you look at their aggregate performance, Chicago does very well. It is unfortunate that there aren’t opportunities to help [organizations] like them grow their impact, especially when the need in Chicago is so acute.”

Walton’s withdrawal is just one of the signs that Chicago’s once-rapidly expanding charter sector is facing a harder sell in an increasingly hostile political climate.

Just last week, two reports—one from Generation All, an initiative of The Chicago Community Trust, and another from a district working group—came out calling for more support for neighborhood high schools, which have lost enrollment to charters.

Meanwhile, Chicago Public Schools approved only two new charter schools last year, and none in 2014 as Mayor Rahm Emanuel faced a tough re-election fight in which his decision to close 49 neighborhood schools fueled his opposition.

In addition, charters have lost access to start-up grants from the district, and CPS has offered to cap charter school growth in its labor negotiations with the Chicago Teachers Union.

“Now charters are being used as political football in the union negotiations,” says Andrew Broy, of the Illinois Network of Charter Schools. “Any external group would say, what’s the chance of adding 10 to 15 schools here, versus doing it in Los Angeles or New York?”

Walton’s critics, who view charters as an instrument to bust unions and destabilize traditional public schools, say Walton’s decision is a small victory.

“It shows that resistance works. There’s very active resistance there, not just from the union but from parents on the ground,” says Diane Ravitch, a professor of education history at New York University and a one-time proponent of education reform, in which charters play a central role. “What [the funders] are seeing is that the community is saying, ‘We don’t want you. Go away. You’re outside people and you don’t know our community.’ ”

Like Chicago, like Newark        

Like Chicago, Newark, New Jersey has also lost Walton funding for charters. Tax records show Walton — which was started by Walmart founder Sam Walton — gave a charter school fund in that city nearly $1.9 million in 2013 and again in 2014.

Newark’s current mayor, Ras Baraka, won office in 2014 on a campaign against education reform initiatives like charters. Baraka left his job as a high school principal to run in the mayoral election, and his victory came on the heels of a failed effort to drastically transform schools with the help of private philanthropy, including a $100 million gift from Facebook founder Mark Zuckerberg.

Sternberg says he wouldn’t draw too many parallels between the political climate around Walton’s withdrawal from Newark and Chicago, adding that he’s “very optimistic about Newark.” The conditions for charter growth in Newark are strong, he says. New Jersey has direct state authorization of charters and Newark schools are under state control.

“We’re probably more active in New Jersey than in Illinois and are investing deeply in Camden,” he says. Camden is on Walton’s list of 13 target cities that will receive the bulk of the $1 billion in education dollars from the foundation over the next five years. The target cities, listed in a strategic report released earlier this year, include New York City, Los Angeles, Washington, D.C., New Orleans, and Houston.

“We are taking a step away from dramatic investments in Newark, but it’s a very different set of conditions there than in Chicago,” Sternberg says.

Still, the environment in Newark, as in Chicago, is not as friendly to charters as it was just a few years ago, says Trina Scordo of New Jersey Communities United, which is funded primarily by progressive unions.

“It may not be at the scale the way it is in Chicago, but it’s a volatile situation around charter expansion right now,” Scordo says. But she has no illusions that Walton’s departure will slow charter expansion in Newark.

“They will go to places where they can get more of a bang for their buck,” she says. “That does not mean they might not come back. It’s just less of a clear path for them right now.”

Will other players fill in Walton’s gap?            

Former state Sen. Miguel del Valle, a longtime opponent of charter schools, points out that Walton, while an important source of money for charters in Chicago, isn’t the only source.

“From a financial standpoint, there have been other players, hedge fund folks and others who have come in and have been providing support,” del Valle says. “You look at the growth of Noble charters, and it’s been dramatic. They’ve been able to secure private dollars from other sources.”

In addition, the state of Illinois received a five-year, $42 million grant from the U.S. Department of Education last fall to expand charter schools and share best practices. Broy of INCS says the impact of Walton’s departure is “blunted to some degree” by the influx of federal dollars. Chicago will have to compete with other districts for grants, however.

Still, Broy says he does “worry about the long-term, national view of Chicago as a place that’s getting things done and moving things forward in the right way.”

He adds that Chicago continues to have a strong local base of philanthropic support for charter schools.

(INCS will continue to receive Walton funding for state-level policy work. Tax documents show that Walton grants accounted for a little less than one-third of the $3 million that INCS reported in revenues in 2014.)

Sternberg left the door open to a return to Chicago and says he’s mindful of the impact Walton’s decision had on smaller organizations. One small parent group, Charter Parents United, received a two-year, $400,000 seed grant from Walton in 2014 but recently had to shut down because it couldn’t raise enough money elsewhere to stay afloat long-term.

“We should be clear: we want to be able to look back, take another look at Chicago, in a few years, and see that the opportunities that may not be available today are available then,” Sternberg says.

Melissa Sanchez

Melissa Sanchez is a reporter for The Chicago Reporter. Email her at and follow her on Twitter at @msanchezMIA.

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