Educating Eli: Eli Broad built two corporate empires and a $4 billion fortune. Now for a real challenge: fixing inner-city schools.

• Author: Weinberg, Neil

Eli Broad is worth 4 billion bucks. He launched two companies onto the New York Stock Exchange and vaulted himself onto Forbes' list of the 400 richest Americans. A world-class art collector and a civic pillar of Los Angeles, he globetrots in a Gulfstream IV jet and pals around with the political and business elite.

Yet two days short of his 70th birthday last June, Broad made his way through Los Angeles' edgy South Central area, past streets teeming with prostitutes, gang graffiti and razor wire. His destination: Figueroa Elementary School, for a ceremony celebrating a new citywide after-school arts program.

Broad (rhymes with "load") put up $500,000 as one small step in his idealistic, seemingly impossible crusade to fix the nation's broken inner-city schools. Since 1999, Broad and wife Edythe have contributed $400 million to the Broad Foundation for public education reform, and pledged a few hundred million more to medical research and foster care. With their two sons grown and prosperous, they vow to give most of their fortune to charity, eventually.

The way Broad sees it, the big problem in education is that principals and administrators--typically former teachers with scant business training--are overwhelmed trying to run their organizations and aren't focusing effectively on education and academic achievement. Train them in the same management skills used at the best companies--and replace laggards with savvy outsiders--and the entire system could improve sharply.

Thus his foundation runs programs that teach new school board members how to govern big organizations. He draws high achievers from outside education to train for new careers as district superintendents. He funds apprenticeships for aspiring principals and attracts newly minted MBAs and lawyers to big-city school management jobs. Broad even woos unions, trying to get them to embrace performance-based pay schemes, such as those that tie teachers' pay to students' test scores. "I want to give back, and I also have a big ego," Broad says. "I'd rather be recognized for doing good than for just making money."

SIZABLE NEEDS

No question, the needs are sizable. Students in urban centers lag woefully behind their suburban peers in a debilitating cycle. By fourth grade hall of the city kids can't read at even a basic level (vs. 38 percent nationally). Math skills are below the most basic level for more than two-thirds of inner-city eighth graders. Dropout rates among minorities, who dominate enrollment in urban districts, can be double that of white students--or even higher. In New York City, the nation's largest district, 40 percent of schools don't meet federal standards.

Many reform initiatives address teaching, but Broad says this focus on the bottom level of the system makes no sense. To him, reforming school districts from the classroom up makes no more sense than it would to try revamping NASA by tweaking the interior of the space shuttle. The answer, he insists, lies in good governance, strong management and better people running the show. "These are huge enterprises," he says of urban school districts. "You don't start at the bottom. You start at the top."

America spends $400 billion--or about 4 percent of gross domestic product--on its public schools. For this ton of cash, it gets an education system that is divisive, poorly run, politicized and intentionally fragmented for patronage purposes. The system is balkanized into 16,000 districts, most of them governed by what Broad describes as a hodgepodge of well-meaning parents, interest groups and political hopefuls. Standing in front of an audience recently, he put his hand on a stack of school board minutes and declared that not one page was devoted to student achievement. Instead, boards spend their time picking out building colors and fixing football field lighting.

TEACHING VS. BUSINESS

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