Funding the Transition to New Models

Remember the 2012 Ford Focus Electric?

Range of 76 miles (battery only) and an initial list price of $39,900. Don't be deceived by the hatchback styling as most of the trunk space is dedicated to the battery compartment. In 2012, Ford produced 685. Ford Focus Electric production peaked in 2014 at 1,964.

The Focus Electric was part of the early wave of electric vehicles from the major car companies, including the Nissan Leaf and the Chevy Volt (Tesla released the Roadster in 2008, priced at $100,000). Shopping for a car has led many buyers to find more compelling reasons than mere practicality to sign and drive. Status, entertainment, nostalgia, color combinations or even the particular sound of the rumble when the light turns green – each is a reason that frequently supplants safe and practical for the buyer strolling the lot.

For the Focus Electric and its peers, there was a new factor shaping the priorities of potential buyers: contributing to the public good. Transportation accounts for a signifiant portion of greenhouse gas emissions which contribute to climate change. Driving an all-electric car with significantly less emissions than a standard combustion engine is better for the environment. Being an early adopter – even paying a higher price for the first model to roll off the line – has real benefits.

1. Signal individual values.
2. Reduce greenhouse gas emissions.
3. Participate at the leading edge of a technological revolution.
4. Increase the likelihood that better and cheaper models are produced next year. Or, said another way: in the mid-'00s there wasn't much of a market for all-electric vehicles, making the earliest models expensive (a Focus for $40 grand!). But the buyers who paid more at the onset provided cash for manufacturers to invest in improving the quality and production efficiencies of later models.

Those benefits existed even before the addition of an incentive from the U.S. Federal Government and soon thereafter similar incentives from many states, too. Beginning in 2008, Uncle Sam began offering tax rebates of up to $7,500 for qualifying electric vehicle purchases. By 2012, these tax rebates were part of a broader goal to get 1,000,000 electric vehicles on the road by 2015. The goal wasn't met until 2018 but no matter. There is now a competitive electric car market in the U.S. The early financing by the U.S. government, coupled with its vast regulatory power, made a significant difference in converting the fledgling Ford Focus Electric of 2012 into the impressive F-150 Lightning of 2021.

The arc from Focus to Lightning has been a helpful backdrop for me in considering where we are in the U.S. and what's needed next to unlock potential and opportunity through education. I'll skip the long recounting of the current reality of our education systems and their tilt toward decline (you can read those thoughts here). And, I'll keep the prescription short with respect to a path forward: Subsidize the demand for the creation of new education models. Many states are already pursuing this path, and it's time for more philanthropies with a mission to advance education to join them.

In 2012, U.S. buyers purchased 14.5 million new vehicles. Only 53,000 of those were electric, .3%. We're at a similar moment today with regards to educational models. The pandemic led to the creation of countless new models for educating and for caring for children. Almost all of those models were financed by individual families with financial capacity. Philanthropy did contribute in limited ways, but mostly through funds allocated for COVID relief rather than those earmarked for K-12 education grants.

Congress has already mailed a $200,000,000,000 check to state Departments of Education and local Boards of Education. There are few concrete plans at the state or local level for how to allocate this infusion of capital to improve current school operations. Eighteen states, though, have expanded budgets and grown programs to provide financial support for families to meet the educational needs of their children. This is significant as most state legislative campaigns to expand funding for alternative models over the past decade have ended in defeat.

This state funding plus the ongoing impacts of the pandemic create a chance to accelerate the development of these models and critically, to support the establishment of key market mechanisms that enable more would-be participants to join – both would-be providers and families.

There is a role for philanthropic funds to come alongside the increased funding from state governments. Grants from foundations can be used to reach families residing in states that haven't made expanding access a top priority, to support the educational leaders who are developing and improving alternative models, and to facilitate the public research and dialogue required to translate state-by-state victories into a nationwide renaissance for opportunity through education.  

States have stepped up. Now, it is private philanthropy's turn.

Photo credit: Robert Kerian