Sad but useful lessons from the FEGS Implosion

Capital New York has a very interesting story about the collapse of FEGS -

The story describes several critical issues, including:
  • A large number of for-profit efforts that FEGS propped up with cash infusions:

It is unclear whether FEGS’ for-profit firms ever made any money. And disclosure documents show the reverse—that the charity has for years been propping up the for-profit subsidiaries with a steady stream of funding.

Last week, the Forward reported that the charity began transferring millions of dollars to the for-profit subsidiaries by 2011. Returns reviewed by Capital show FEGS moving $8.6 million from the nonprofit side to one for-profit information technology company, AllSector, in 2011. In 2012, the charity transferred even more: $9.1 million.
  •  Loans:
To build up its housing portfolio, FEGS routinely had gone to a variety of city and state funding sources over the past decade, seeking millions of dollars’ worth of advances on construction and capital costs for their new facilities, taking out low-interest loans that it didn’t have the means to pay back.
From the federal Department of Housing and Urban Development, the charity received $800,000 in advances for housing developments and S.R.O.s. From the state’s Office of Mental Health, more than $3.4 million for facilities in East New York and the Bronx. And for more than a decade, FEGS, like many other nonprofit institutions around the state, had been financing new projects with money from bond proceeds through the Dormitory Authority of the State of New York, a state public authority.
But read the full article and decide for yourself: could board oversight have been stronger? 


Schools can learn from data

Let's face it: schools use data all the time. That's what grades are - grades on tests, quizzes, papers, finals. They all roll up into a final grade, and the grade tells the student - and a bunch of other people, including other teachers, parents, and admissions officers, whether a student is 'good' at something.

So why backtrack from the work that the Department of Education began under the Bloomberg administration? That's exactly what Chancellor Carmen Farina appears to be doing, according to yesterday's New York Times.

Notwithstanding Farina's statement "I know a good quality school when I'm in the building," schools should look at comprehensive data. They can learn from it. We may not yet have had all the conversations about what are the right data, and about how to interpret it, but ignoring it? Not a good way to improve schools.

For a more detailed view of Chancellor Farina's attitude toward data, see Robert Pondiscio's article "Because Carmen Farina Says So" in City Journal, here.

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