By the 1980s, President Ronald Reagan, concerned about the growing economic power of Japan, commissioned the groundbreaking report, “A Nation at Risk,” which warned of a “rising tide of mediocrity that threatens our very future.” Reagan ushered in marketplace ideas intended to rattle government bureaucracy, such as choice, merit pay, and more testing.

By the 1990s, the era of standards and accountability was at full throttle. With it came a subtle change in language. Instead of “teaching children,” pundits talked about “raising test scores” and “closing the achievement gap.” James Crawford, president of the non-profit Institute for Language and Education Policy, traced the injection of the “achievement gap” into the national policy debate back to the presidential platform of George W. Bush, who seized an issue traditionally owned by Democrats. The idea of bringing the test scores of poor minority children on par with those of white children became the centerpiece of the No Child Left Behind Act in 2001. “Achievement gap is all about measurable ‘outputs’— standardized test scores—and not about equalizing resources, addressing poverty, combating segregation, or guaranteeing children an opportunity to learn,” Crawford wrote. “It shifts the entire burden of reform from legislators and policymakers to teachers and kids and schools.”

That brings us to the current decade, where the very term “education reform” has shifted definitions. Elements of choice, competition, test-driven curricula, and incentive-based pay had been in the hopper for decades. What is new is the vast wealth and power of the dominant voices pushing those things, and their sharp focus on publicly funded and privately run charter schools, which currently educate about 3 percent of the nation’s students.

At a recent Robin Hood Foundation gala, the Wall Street charity pulled in $88 million in one evening from its hedge fund participants, much of the money targeted for New York City charter schools. Democrats for Education Reform, a pro-charter political action committee with hedge-fund ties, has expanded its reach to ten states, including Rhode Island, Michigan, and Colorado. By far the most influential of all are the Big-Three venture philanthropies, The Bill & Melinda Gates Foundation, The Walton Family Foundation, and Eli Broad’s Broad Foundation, which often work in concert on issues like school choice and teacher effectiveness.

Stephanie Banchero, a longtime education reporter now at The Wall Street Journal, calls this group of people and organizations the “non-traditionals,” and welcomes their relatively combative presence on the beat. “It keeps us on our toes,” she says. Caroline Hendrie, executive director of the Education Writers Association, calls them an “alternative establishment,” noting their influence in raising the level of urgency and attention to public education. Diane Ravitch, the education historian, a former assistant secretary of education under George H. W. Bush, and a past advocate of school choice and accountability, calls them “bastions of unaccountable power.”

An important story in the Winter 2011 edition of Dissent magazine by Joanne Barkan detailed their influence—amplified by the media—over urban school policy. In it, she quotes conservative education expert Frederick Hess, the nation’s most vocal critic of the media’s “gentle treatment” of the foundations. In the 2005 book, With the Best of Intentions: How Philanthropy Is Reshaping K-12 Education, he describes a credulous press that treats philanthropies like royalty.

What draws these venture philanthropists and Wall Street financiers to urban school reform, and to top-flight charter schools like Uncommon Schools and the Knowledge is Power Program (KIPP) network? One is the businesslike way the schools in those systems are run. They value standardized curricula and measures, incentives, as well as a young, flexible, nonunion teaching force. As a group, these reformers tend to believe that America’s growing child-poverty rate and shrinking social services are used as excuses by educators. Results in schools like those in the KIPP network, they say, prove that poverty does not have to be an obstacle. They see themselves as warriors against the status quo, with leverage. “It’s the most important cause in the nation, obviously,” the manager of hedge fund T2 Partners, Whitney Tilson, told The New York Times in December 2009. “And with the state providing so much of the money, outside contributions are insanely well leveraged.”

LynNell Hancock is the H. Gordon Garbedian Professor of Journalism at Columbia, and director of the school's Spencer Fellowship in Education Journalism.