When I graduated college and was lucky enough to get a job at a new venture capital firm, I heard about an emerging kind of investment, the “leveraged buyout.” Unlike today, back then there were no business school courses or “industry” publications on the topic — it wasn’t yet an industry! I had to learn about this investment technique by reading obscure government filings by the few firms that were practicing this financial art. One of the most prominent was the firm started by Ted Forstmann. I read everything I could about his investments.
Little did I know that years later, Mr. Forstmann would influence my life in even a bigger way. In late 1997, I decided to start a privately funded scholarship program for low-income families in Tampa Bay. I wanted to see how many of these parents would choose a private school for their children, if they had some financial assistance. I hadn’t done as well as Mr. Forstmann, so I could only offer 350 scholarships worth $1,500 a year.
As I was preparing to announce the scholarship progam, I read in the paper about an effort launched by Mr. Forstmann and John Walton, of the Wal-Mart family. I couldn’t believe it — they wanted to partner with local funders to create scholarship programs in major cities! I actually flew to New York without an appointment, went to the offices of the newly created Children’s Scholarship Fund and said, “I am your partner in Tampa Bay.” The staff, literally still unpacking boxes, said, “Um, okay … I hope all the other cities are this easy.”
Forstmann and Walton each contributed $50 million to the national CSF effort, and they allowed me to double the number of scholarships in Tampa Bay. With little publicity, we received 12,000 applications for our 700 scholarships. Similar incredible responses were seen in other cities. In Baltimore, over a quarter of the eligible families applied!
This response was, to me, the great accomplishment of CSF and a great legacy of Mr. Forstmann, who died Sunday at the age of 71. Prior to CSF, opponents to parental choice would say, “Poor parents don’t want vouchers. They want more money for their childrens’ public schools.” CSF demolished this lie forever.
As we fought in Florida to expand choice for low-income families, nothing was more powerful than this response from parents. I will never forget one committee meeting when the state Senate was considering the tax credit scholarship bill. A Senator from Miami scolded the bill sponsor: “Senator, I know my constituents, and they don’t want this voucher program.” He didn’t know we had brought up 15 parents from his own district to give testimony during public comment. I will never forget the Senator’s face as parent after parent came to the podium and said “Senator, I am from your district, and I want this scholarship.” The politics of choice had changed forever.
Since the tax credit scholarship program was created by the Florida Legislature in 2001, more than 200,000 low-income children have attended the private school of their parents’ choice, using over $900 million of donations from companies. CSF has become the spark for tax credit and voucher programs in many other states, and hopefully soon many more. Mr. Forstmann’s generous contribution made that possible. On behalf of all those families, and all those to come, I say thank you, Mr. Forstmann. May you rest in peace.