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Leadership Profiles
Hugh McDonald J.R. Gonzales
Hugh McDonald
President and CEO, Entergy Arkansas
Making Kids Your Business

Hugh McDonald, president and CEO of Entergy Arkansas, has long been an advocate for education. His involvement began while he was earning his MBA at the University of New Orleans. At that time, some 50 percent of the city's population lived in poverty, and Mr. McDonald observed the toll this deprivation took on families, children, and the community as a whole. He also noted that the lack of quality education was the common thread. He became convinced that by "fixing education and starting kids early, we can solve so many other problems."

It was not only as a concerned citizen that Mr. McDonald embraced early education. As a businessman, he recognized that pre-k presented a tremendous investment opportunity. "At Entergy Arkansas, we have 670,000 customers of whom 500,000 are residential, and 20 percent of our customers live at or below the national poverty level." Mr. McDonald says. "It's a matter of economics for us as a business. While it's certainly the right thing to do, it's also an opportunity to improve the economic environment where we operate and to reduce the burden on our customers."

Selling Pre-K

In 2000, Mr. McDonald became president and CEO of Entergy in Arkansas, another southern state with high poverty rates and low scholastic achievement. Here was the perfect opportunity to put the power of education to the test. Entergy began its pre-k advocacy by commissioning an economic-impact study, "The Economics of Education: Public Benefits of High-Quality Preschool Education for Low-Income Children." This study found that, for Arkansas, the per-child cost of two years of pre-k would be $9,380 and would return $86,059 in benefits to the state: an astonishing benefit-to-cost ratio of 9:2. "So we know it's a great investment, but the question, of course, is how to convince others and how to pay for it."

To begin answering these and other important questions, Arkansas's governor and legislature established a blue-ribbon commission on education, and Mr. McDonald was selected to serve with a group of 25 appointees. During the commission's meetings, Mr. McDonald fine-tuned his pre-k pitch.

"I asked myself, how do we make the sale, and decided that first, we had to get the business community involved." To do this, Mr. McDonald focused on the economic story. "Pre-k costs ten times less per person than incarceration," he says, echoing his firm's report. He also cites economic impacts from a tax revenue standpoint and in terms of lower costs to society over the long-term. He says the business community heard the message loud and clear.

The Arkansas business community then coupled their efforts with child-, low-income-, and education-advocacy groups to create a critical mass of support to demonstrate to policymakers.

Delivering the Product

In 2004, business leaders and child-advocacy organizations worked diligently to secure additional funding for the ABC program. Mr. McDonald says, "By 2005, the policymakers were believers, and they continued the funding without a concerted lobbying effort by the business community. I'm particularly proud of this because there was buy in. The case was made, and the results speak for themselves. It was the right thing."

Although high-quality pre-k in Arkansas is underway, Mr. McDonald cautions that the work isn't over. ABC was not fully funded from its inception, and in the first year of implementation, enrollment suffered due to inadequate parent outreach. So, the business community partnered with a local advertising agency to produce TV and radio ads promoting ABC. "It was a great success," Mr. McDonald says. "The seats were filled with another 7000 kids in high-quality pre-k and more on a waiting list, and that's what it's about: getting the kids in the chairs so they can have more opportunity to succeed in life and become productive citizens."

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