Loeb Donates $15 Million to Success Academy for High Schools
(Bloomberg) -- Activist investor Dan Loeb isn’t backing down.
Loeb, who has angered teacher’s unions and politicians for supporting charter schools, is giving $15 million to Success Academy, its founder Eva Moskowitz said Monday night at a benefit for the New York network of 46 schools. The gift from the foundation that he created with his wife will establish the Loeb Fund to Reimagine the American High School.
“Several years ago, Margaret and I recognized that for our students to excel in college and beyond, Success Academy had to develop an entirely new model for public high school," Loeb, 56, founder of Third Point LLC, said in a statement.
Success Academy opened its first high school in 2014, and a second two years later. It plans to open as many as eight more by 2033, with the Loeb gift supporting school design that can be replicated. Since its founding in 2006, Success has used private funds to cover startup costs, including $8.5 million from John Paulson. The student population is 95 percent black and Hispanic, with 74 percent from low-income families.
Five years ago, the American Federation of Teachers put Loeb on a watch list of money managers who support groups the union considered hostile to traditional public employee pensions. Soon after, Loeb boosted his pledge to $3 million from $2 million at a Success Academy gala. Last year, he wrote and deleted a Facebook post criticizing a black state legislator who opposes charter schools, saying she hurt people of color more than “anyone who has ever donned a hood.” That prompted Mayor Bill de Blasio to demand his resignation as chairman of Success Academy. Loeb, who apologized, remains in the role.
Raymond McGuire, global head of corporate and investment banking at Citigroup Inc. and the evening’s keynote speaker, praised Success’s model and results while also recognizing that it must do a better job engaging with communities it serves.
“Success puts a lie to the notion that poverty, race or present circumstances limit how much your child can learn,” McGuire said. “It’s not surprising that many politicians and some of those who control the traditional public schools dislike Success. You take away their excuses for properly educating.”
Still, the school plays to “mixed reviews in the African-American community,” he said. “I cannot tell you how often I’ve heard friends and colleagues say, ‘I admire their results but there’s something about them I don’t like.’"
McGuire said building relationships within the black community, by regularly meeting with church leaders, for example, is an imperative if Success is going to help heal the national education crisis.
“Success needs strong support to continue its work and not be distracted by the hostility of your maintain-the-status-quo opponents who see you as politically vulnerable," McGuire said.
Toward the end of the evening, Loeb went on stage and responded to McGuire’s comments.
“Basically his message was ‘You guys are doing great, but you could do better,”’ Loeb said. “And I think we all know that and I want to thank Ray for making that message loud and clear for all of us tonight."
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