BOARD OF DIRECTORS

Bradley Hoff, Chair FOSTER PEPPER PLLC

Pamela Banks

URBAN LEAGUE OF METROPOLITAN SEATTLE

Jonathan J. Bridge

BEN BRIDGE JEWELER, INC

Jane Broom MICROSOFT CORPORATION

Fay Chapman

COMMUNITY VOLUNTEER

Lisa Chick CITY YEAR, INC

Erle Cohen

SEED IP LAW GROUP

Mathew Dailey LPL/FINANCIAL ADVOCATES

Maud Daudon

SEATTLE METROPOLITAN CHAMBER OF COMMERCE

Dan Dixon

SWEDISH MEDICAL CENTER

Roger Erskine SEATTLE EDUCATION ASSOCIATION

Lynnette Frank

COMMUNITY VOLUNTEER

Brett Gerry THE BOEING COMPANY

STEVEN GOTTLIEB

GOTTLIEB GROUP COMMUNICATIONS

Ken Hamm FIRST CHOICE HEALTH

Sheila Edwards Lange SEATTLE CENTRAL COLLEGE

Bruce Leader

COMMUNITY PARTNER

Nate Miles ELI LILLY & COMPANY

Chase Morgan

BRIDGE PARTNERS LLC

Sara Morris PRESIDENT & CEO

Estela Ortega

EL CENTRO DE LA RAZA

Matthew Paddock METZLER NORTH AMERICA

Jena Thornton

MAGNETIC ERV

Sally Yates GROUP HEALTH COOPERATIVE

David Zapolsky

AMAZON.COM

509 Olive Way, Suite 500 Seattle, WA 98101 • PHONE 206.343.0449 • FAX 206.343.0455 • www.alliance4ed.org

October 15, 2015

Ms. Sherry Carr, Board President Ms. Sharon Peaslee, Board Vice-President Dr. Larry Nyland, Superintendent Seattle Public Schools 2445 3rd Avenue South Seattle, WA 98134 Board President Carr, Director Peaslee and Superintendent Nyland, We received your letter of October 7, 2015. We are proud of our shared work over two decades. As an independent organization with many stakeholders, we look forward to continuing and expanding our work on behalf of students. We hope the future brings renewed opportunities to work with SPS administrators as well. Only good can come of a strong partnership between SPS and Seattle’s business and philanthropic community, one of the most vibrant and generous in the world. The position taken in your letter is disappointing and represents a loss for the children of our district and our city. To address some items included in your letter:

We will re-submit to you the Seattle Teacher Residency Memorandum of Agreement,

stipulating SPS’ financial contribution of $230,000 in 2015-2016 and $50,000 in 2016-2017.

We will continue to provide fiscal accounting services to schools through the 2015-

2016 year at the agreed upon rate of 7.5%. If the district invites us to participate in an annual contracting process beyond the current school year, we will make a determination as to whether we wish to do so at that time.

Endowments held by the Alliance include exclusive property provisions stipulating

funds are the exclusive property of the Alliance.

Regrettably, your letter contains numerous factual inaccuracies. Attached please find a document addressing those inaccuracies. The Alliance family is wholly committed to the cause of public education. We are enthusiastic about continuing and extending our current work and remain open and willing to work with anyone, any time – including SPS leadership – on efforts that benefit students in our public schools. Sincerely, Sara Morris, President & CEO, Alliance for Education The Executive Committee of the Alliance for Education

1

AFE Comments on SPS letter dated October 7, 2015

The letter to the Alliance for Education from School Board President Sherry Carr, School Board Vice President Sharon Peaslee, and Superintendent Nyland dated October 7, 2015 contains numerous misleading and/or inaccurate statements. As a practice, AFE has refrained from responding to various assertions because it does nothing to serve the interests of children. This letter merits a response; our comments are below.

SPS Statement

AFE Comment/Correction

Specific to the actions SPS intends to take:

“SPS will…take formal action to legally separate SPS from the Alliance.”

SPS and the Alliance for Education are, and have always been, legally separate entities.

“[SPS will] prohibit the Alliance from being a fiscal sponsor or grant sponsor on any new items.”

The donor chooses the fiscal sponsor.

“[SPS will…] start discussions on how to transfer any SPS collected endowments back to SPS.”

Endowments held by the Alliance for Education include exclusive property provisions stipulating funds are the exclusive property of the Alliance.

Other statements, in the order they appear:

“The current leader has worked to affect changes in district governance, influence collective bargaining, force initiatives on District leadership, push for termination of a former district HR director, and most recently go around the Superintendent in funding initiatives.”

AFE leadership has: never taken a position on governance reform (but has worked to promote and support effective school board governance) advocated (along with 35 community organizations via the Our Schools Coalition) for contract reforms sought by Sup. Maria Goodloe-Johnson and the School Board in 2010. District officials now credit that agreement with major academic gains in the south end.1 partnered with the district on initiatives; it is unclear to which initiatives the district is referring communicated to Superintendent Banda that future funding from the Philanthropic Partnership for Public Education (PPPE) – a funders collaborative convened, but not controlled by, the Alliance – would be unlikely for projects overseen by the HR director responsible for the only grant PPPE has ever withdrawn due to failure to complete district-proposed deliverables. see below re: principal leadership opportunity

1 “Academic gains in southeast Seattle aren’t limited to Rainier Beach High,” Seattle Times, April 17, 2015.

2

SPS Statement

AFE Comment/Correction

“Alliance fundraising has declined and overhead is high.”

Overall funding from the Alliance to SPS has indeed declined in recent years. The churn of four superintendents in four years has left many of the district’s largest funders wary – and weary – of making large investments. In addition, the district’s increasing unwillingness to partner with AFE in the past few years has forestalled joint pursuit of significant funding for major initiatives. AFE engages independent auditors annually. In 2014, 21.6% of expenses were spent on administration and fundraising. The national average for non-profits is 20% to 28%.2

“We received $921,783 from the Alliance in 2014-2015.”

Yes, those are funds administered directly to the central administration. The Alliance supports and invests in schools in many ways. In 2014, the Alliance expended $4.8 million. Of that, $3.8 million (79%) was expended on programs benefitting Seattle Public Schools [see page 4 of AFE audit completed by independent accounting firm Clark Nuber]. Audited financials can be found on our website at http://www.alliance4ed.org/who-we-are/annual-reports-financials/. Since our founding, the Alliance has been proud to steward over $155 million in support of students in Seattle.

“The Alliance spent $1,039,000 on management overhead and fundraising. SPS received the benefit of about $1 million dollars from the Alliance for those efforts. Clearly the Alliance is benefitting more from SPS from fundraising done in our name.”

Please see above two cells for accurate data.

“During the 2013-2014 school year, the SPS Superintendent and Deputy Superintendent sent the CEO of the Alliance six funding priorities in rank order. …The Alliance elected to fund, as its first and highest priority, STR –the last program on the SPS list.”

These funding requests were submitted by SPS to the Philanthropic Partnership for Public Education (PPPE) a funders collaborative convened, but not controlled by, the Alliance. Funding decisions are made collectively by The Bezos Family Foundation, Bill and Melinda Gates Foundation, Biller Family Foundation, Boeing Co., Microsoft, Nesholm Family Foundation, Paul G. Allen Foundation, Raikes Foundation and Seattle Foundation. PPPE funded four of the six requests at the levels SPS requested. The rationale for declining to fund the remaining two was transparently communicated (PPPE memo to Superintendent Banda, Deputy Superintendent Wright, Clover Codd, April 16, 2014).

2 “Nonprofit Overhead Cost Project,” http://nccsdataweb.urban.org/kbfiles/521/brief%205.pdf

3

SPS Statement

AFE Comment/Correction

“The mission of the Alliance has shifted from supporting student learning to focusing on three things: an unsustainable STR model; a desire to change District leadership either through direct turnover or governance change; and a desire to be a more independent (critical) voice for change in regard to District leadership.”

The mission of the Alliance has remained constant: ensuring student success in college, career and life. Guided by our strategic plan, developed alongside district leaders in 2013, AFE executes this mission in three ways: strategic, service and spirit work.3 AFE has not advocated for governance reform and as a 501(c)3 is prohibited from endorsing political candidates. The Alliance has always been independent. The term “critical friend” is a common concept among educators4 and refers to developing collegial relationships, encouraging reflective practice, and rethinking leadership. It is a term – and mode of operations – embraced by Superintendent John Stanford at AFE’s inception.

“This past spring, the Alliance CEO challenged the current Superintendent’s attendance at the PPPE event even though the Superintendent was invited by the Alliance staff.”

False. The Superintendent’s attendance had not been confirmed, and it is highly unusual for a Superintendent to walk into a meeting with major funders without any advance communication or coordination with the meeting host. When he walked in, the CEO got up, greeted him, said “We didn’t know you were coming!” and invited him to sit down. She then proceeded to graciously welcome him, gave him the floor to speak, and changed the entire agenda of the meeting on the fly.

“The Alliance funded eight principals to attend an innovative leadership [sic] out of state this summer without the knowledge of the superintendent or the head of principal development.”

This principal leadership opportunity was reviewed by an Executive Director of Schools (EDS), the Principals Association of Seattle Schools (PASS) president and a principal coach in meetings on March 2, 2015 and April 9, 2015. The invitation letter was shared via email with the EDS and coach on April 20 before it was sent to principals (all of whom were STR site principals). On April 21, the EDS shared the opportunity with the Assistant Superintendent of Teaching and Learning. The topic was also covered at a sit-down meeting between the AFE CEO, the Assistant Superintendent for Teaching and Learning and others on June 5, 2015. The CEO was unaware that those SPS representatives had not updated the Superintendent regarding the nature and substance of those meetings/communications. During the planning period, the opportunities provided to the Alliance CEO to have direct dialogue with the Superintendent were: March 18, 2015: A 1:1 meeting during which the Superintendent was

vocal in his criticism of the CEO, told her he did not want to hear what she had to say (about anything), and dismissed her from his office.

March 27, 2015: A meeting with the AFE CEO, CFO and 3 AFE board members, Superintendent, Deputy Superintendent, SPS CFO and two School Board members. District representatives focused the hour on listing criticisms of AFE.

April 8, 2015: A scheduled 1:1 with the AFE CEO for 8am was cancelled by the Superintendent’s assistant without explanation the night before.

June 3, 2015: A scheduled 1:1 with the AFE CEO was cancelled on May 29, 2015.

July 21, 2015: A 1:1 meeting, at which the Superintendent handed the AFE CEO a letter, said the district did not wish to engage in a process to improve the relationship, and ended the meeting.

3 AFE 2014-2018 Strategic Plan: http://www.alliance4ed.org/wp-content/uploads/2014/05/ALLIANCE-FOR-EDUCATION-

STRATEGIC-PLAN_2014-2018_FINAL.pdf 4 https://depts.washington.edu/ccph/pdf_files/CriticalFriends.pdf

4

SPS Statement

AFE Comment/Correction

“The Alliance CEO has gone to PASS in regards to support for other funding possibilities.”

The outgoing PASS co-chair approached the Alliance CEO on August 6, 2015 to initiate discussions of support for principal professional development. Upon following up, the PASS chair subsequently informed the Alliance CEO that he had been instructed by the Superintendent not to engage in further discussions. The CEO ceased communications on that subject.