Millionaire philanthropist Pete Kadens is trying to do what President Biden hasnβt been able to get done.
Kadens has created two college-scholarship programs β Hope Toledo, in his Ohio hometown, and Hope Chicago, which he co-founded with investment-management executive Ted Koenig and launched in September in the city where he ran several businesses. The goal: provide debt-free college to public-school graduates. If that werenβt ambitious enough, he also wants to pay tuition for any parent or guardian of a scholarship student who also decides to pursue higher education.
Kadens, who retired in 2018 at age 40 to focus on philanthropy, passionately believes education can help lift entire communities out of poverty. He choked up when announcing scholarships last month in Chicago.
βNo one walks out of this room the same today,β he said at Benito Juarez Community Academy. βWe will walk out of here with a changed perspective on generosity, on humanity, on equality, and the fact that if we all put our minds together as a city and as a community, that we can and will do better.β
Kadens, who made the bulk of his fortune as CEO of a billion-dollar cannabis operation, may be chasing a pipe dream. He needs to secure $1 billion in Chicago alone for 10 years of scholarships. Fundraising has been robust, he says, but heβs also netted responses from those who politely hint that heβs perhaps smoking too much of his old companyβs product.
Such is the conundrum facing college-promise programs popping up nationwide. Theirs is an appealingly simple idea: If you knock down financial barriers to college, more students will go β a goal made more urgent as the pandemic has depressed college-going rates. Biden and progressives like Bernie Sanders packaged the same idea in the presidentβs now-shelved Build Back Better plan.
Many philanthropists and promise backers dream of more than just sending kids to college. To them, such college aid can be an elixir for economic and workforce development, poverty, and a communityβs well-being. The track record of promise scholarships, however, suggests that it takes sizable sums to deliver such benefits. And local philanthropy often canβt, or wonβt, put up the dollars.
βEven on our best day, we are a very large Band-Aid,β says Saleem Ghubril, executive director of the Pittsburgh Promise. βWe are not a solution.β
In the past five years, the number of promise programs has grown from 50 to nearly 350, according to College Promise, an advocacy group. Local donors β families, companies, universities and community colleges, and others β often drive and fund programs. βYouβd be hard-pressed to find a promise program that is not based in or connected in some way to an areaβs philanthropic sector,β says Michelle Miller-Adams, a Grand Valley State University scholar.
Promise programs come with great expectations, thanks to the success of the Kalamazoo Promise in Michigan. In 2005, anonymous donors pledged to pay up to 100% of tuition and fees at Michigan state colleges and universities for graduates of the cityβs public schools. Unlike traditional scholarships, theirs were based on geography, not on merit or need: It is a promise for essentially any Kalamazoo graduate.
The school district since has reversed a decades-long enrollment slump, and test scores and college-going rates have jumped. Businesses and residents point to the promise as an incentive for their move to the city.
Kalamazoo imitations sprang up quickly β in Denver; El Dorado, Arkansas; and Pittsburgh, among other places. But recent promise efforts look quite different. Rather than offer aid to a range of two- and four-year institutions, they provide scholarships to local community colleges β or sometimes just one. The strategy, they believe, will help provide workers to labor-starved area businesses.
City leaders of Columbus, Ohio, fast-tracked a program in discussion for two years when the pandemic both deepened labor shortages and hurt college-going rates. βTalent development is the new economic development,β says John Tannous, the effortβs project manager.
The Harvest Foundation in Martinsville, Virginia, announced the creation of a $10.3 million fund this fall that will pay tuition and costs at the local community college for high-school graduates in Martinsville and surrounding Henry County for the next 13 years.
Demand for workers is growing in the rural region, which is attracting new businesses after years of hard economic times. That demand, the foundation hopes, can be answered in part by increased numbers of students heading to college.
Some new promise efforts focus on adult learners in addition to high-schoolers. Hope Chicago and Hope Toledo pledge college aid to high-school seniors and one of their parents or guardians. βPoverty is a multigenerational issue,β Kadens says.
None of the new programs β and very few old ones β are as robust as Kalamazooβs. βCost constraints are a big issue,β says Miller-Adams of Grand Valley. βAll of these are running on a shoestring.β
With limited dollars, programs cut corners from their ideal and wrestle with questions like: Should we make small scholarships available to all students or award bigger grants to a smaller number based on need or merit? Four-year scholarships are expensive β do we instead offer funding for two years? One year? Can we afford to pay for support services in college?
βKalamazoo casts a large shadow,β says the Kresge Foundationβs Edward Smith. βMany city and program leaders would say, βWeβd do that if we had those resources. But weβre not bankrolled by a few families with millions to giveββ like the Kalamazoo Promise.
Kalamazooβs donors promised to fund the program in perpetuity. Other organizations havenβt found it easy to raise money for the long run. βItβs often the case that programs at the city level start with seed funding from philanthropy, then fade out or forecloseβ or change eligibility criteria as funding tightens, Smith says.
Pittsburgh offers perhaps the best example of how the vicissitudes of philanthropyβs backing can influence impact. Launched with the high-school class of 2008, the cityβs promise program has provided scholarships to more than 10,000 students, along with wraparound services. The appeal of that aid has contributed to growth in the cityβs population after decades of decline, says Max King, a former foundation chief who helped start the Pittsburgh Promise.
βItβs been wonderfully successful,β he says of the program.
Still, fundraising hasnβt been easy. The program has the money to run through 2028, but beyond that is uncertain. βWeβve heard loudly and clearly from funders that itβs time to wrap things up,β executive director Ghubril says.
Thatβs perhaps to be expected. Philanthropy is known for its short attention span. βSome bright, shiny object comes along and everybody says, βOh, letβs go after that,ββ King says.
Pittsburgh also hasnβt recorded Kalamazoo-like eye-popping numbers that would wow donors. The cityβs college-going rate has climbed four percentage points, to 54% β a notable improvement when such numbers have slumped nationally, but not a stunning change. Enrollment in the cityβs public schools, meanwhile, has dropped by roughly a quarter, to about 20,000 students.
Were the millions put toward scholarships worth it? King says early discussion of the Pittsburgh Promise considered a host of possible benefits for the city. βAnd I remember saying, βEven if we donβt achieve all that, we still will have sent thousands of capable young people to college.ββ
Ultimately, if states or the federal government decide to fund tuition-free college programs, King says, βthe promise concept will have played a brilliant bridging role to a new future.β