For the hedge fund managers that flock to them, charter schools are an almost perfect charitable racket. By imposing the will of wealthy white men onto poor children of color, they are able to live out the kind of Randian fantasy social experiment they dream about but which is rarely political possible or legal to achieve. And the money they give to the charter school foundations they essentially control also gives them access to the highly-lucrative New Markets Tax Credit. Oh yea, and they can collect interest on the money they’ve donated. It’s perfect. But it’s not enough for Bill Ackman.
Since 2011, the billionaire hedge fund manager has invested $20 million of his own money in the Turner-Agassi Charter School Facilities Fund, which was started by former tennis star Andre Agassi and has built 79 new charter schools in poor neighborhoods around the country. The impact investment, which Ackman made via his charitable foundation, has netted annual returns north of 10%....
“Over time, as the foundation worked with lots of non-profits, I became more and more enamored with capitalism as a solution for solving problems,” says Ackman, 52. Now, when his foundation has a choice between investing in a for-profit enterprise and donating to a non-profit, both of which are tackling the same issue, the decision is an easy one. Ackman bets on the capitalist.
[ed . note: We are aware that Bill Ackman does not in fact pocket the profit made from his charitable investment. The headline and overall tone of the fawning Forbes article made a satirical inference of that notion easy for us to make, and that is the thrust of this post. Also, we love explaining our humor.]