Billionaire couple donates $10 million to keep Head Start programs open during shutdown

October 8, 2013

A billionaire couple from Texas has stepped in with a $10 million interest-free loan to cover the cost of keeping Head Start programs open this month for more than 7,000 children in six states, where programs were closed by the government shutdown.

Three girls listen while their teacher reads a story about a cat counting the buttons on his sweater at a Head Start program in Glendale, California. October 3, 2013. Credit: Lillian Mongeau, EdSource

Three girls listen while their teacher reads a story about a cat counting the buttons on his sweater at a Head Start program in Glendale earlier this month. Credit: Lillian Mongeau, EdSource

For now, California children won’t have to rely on the largesse of private benefactors. No state programs receive their federal Head Start grants in October; money stopped flowing to the federal education program for low-income children on Oct. 1 when the government shutdown began. (See below for list of grant renewal dates for California programs.) Four California programs would face closure in November in the unlikely event the shutdown were to continue.

One California program that could face closure next month if Congress doesn’t find a way to fund the federal government is the Howonquet Head Start in Smith River, on the Oregon border. The program serves 34 children in the Smith River Rancheria tribe, said the program’s director Ronda Ritchie. She’s hoping that the government has a budget in place by Nov. 1, she said.

“If not, it will be up to the tribal council if they’re going to keep the program open,” Ritchie said. “They do have revenues that come from the casino. I have no idea if that’s something they would do but knowing how they are about children and families makes me think it’s a possibility.”

The private donation came from Houston couple John and Laura Arnold; John Arnold was a trader at Enron Corp. who later started his own hedge fund. He retired last year, at age 38, and has shifted his focus to philanthropy. Laura Arnold runs the couple’s foundation, but the money donated to Head Start through the non-governmental National Head Start Association is from the couple’s personal coffers. If the programs that use the money receive their full annual grant when the federal government comes back online, they must pay the Arnolds back, without interest.

The money is meant to help programs in Alabama, Connecticut, Florida, Georgia, South Carolina and Mississippi, which together serve 7,195 students and were closed by the shutdown, as well as additional programs across the nation, serving about 11,000 students, that did not receive grants this month but are still operating. If the government doesn’t reopen by Nov. 1, an additional 86,000 children could be affected by program closures, according to the National Head Start Association.

John and Laura Arnold. Photo from the website of the John and Laura Arnold Foundation.

Forbes lists John Arnold as the 193rd richest man in the country, with a net worth of $2.8 billion. The Arnolds have signed the Giving Pledge, a commitment by many of the world’s wealthiest families to give away half of their wealth to charitable causes. The couple has an interest in education and has supported Teach For America and KIPP charter schools in the past. They are also donors to the Democratic National Committee and the Obama campaign, for which John Arnold was a significant fundraiser in 2008, bundling large donations from dozens of high-net-worth individuals to provide money to the campaign.

“The Arnolds’ most generous act epitomizes what it means to be an angel investor; they have selflessly stepped up for Head Start children to ensure their path toward kindergarten readiness is not interrupted by the inability of government to get the nation’s fiscal house in order,” said Yasmina Vinci, executive director of the National Head Start Association, in a statement Monday.

She added, however, that the national preschool program for children living in poverty could not exist on donations from private individuals on an ongoing basis and that congressional leaders must act to end the shutdown.

Program leaders in California are crossing their fingers that Congress finds that solution before they have to consider closing their doors and laying off staff, said Rick Mockler, executive director of the California Head Start Association.

The shutdown follows an across-the-board 5.1 percent cut to federal programs as a result of sequestration. Thousands of children in the state have already been turned away from the program this year as a result of the cuts.

“Head Start has already been disrupted by the sequester,” Mockler said. “The shutdown is a hit not just to the people who might get furloughed but a hit to everybody’s morale.”

Ritchie, who is not a tribal member herself, said she wasn’t sure how long the tribe would be able to afford to keep the Howonquet Head Start open if it came to that. It costs about $30,000 a month to run the program and pay the 11 staff members, she said.

In the meantime, Ritchie and program leaders across the state remain hopeful, Mockler said.

“By nature people who go into early child development are hopeful people,” he said. “So we see the potential in things, whether it’s in our children or whether it’s in the ability of Congress to hammer out a deal.”

Head Start Grant Recipients in California Click on the top row to sort table.

Source: U.S. Department of Health and Human Services

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