He Became a Billionaire Selling Tools. Now He’s Boosting Skilled Trade Education in High Schools

A High School woodworking shop. Michael Woodruff/shutterstock

A High School woodworking shop. Michael Woodruff/shutterstock

A number of prizes totaling $1 million are within the grasp of high school faculty who teach students skilled trades, thanks to a competition set up by billionaire Eric Smidt’s Harbor Freight Tools for Schools initiative.

Smidt started the discount hardware store Harbor Freight Tools at 17 with his dad in 1977 and graduated high school through work-study. The venture paid off. Smidt, the CEO of the company, now has an estimated net worth of nearly $3 billion.

Over the past several years, Smidt has taken an active role in philanthropy, using his foundation to support skilled trade education in high schools, both through prize competitions like this one and direct grants to counties and districts. Previously, Smidt credited the focus of his philanthropy to his experience in high school.

"I never thought I'd be involved with an education prize because I struggled in high school and I didn't go to college," Smidt said in a press release announcing last year’s prize. "But there was one class that I really loved... a shop class with a terrific teacher, and it was great to learn a skill."

"I started Harbor Freight Tools for Schools as a nonprofit program to strengthen and bring back those classes to give students a path to a skilled trade and a good-paying career," Smidt said.

Smidt also called out the broader economic need for workers skilled in these trades, as he wrote in an open letter earlier this month. As many workers in those trades retire, Smidt—echoing estimates by industry experts—foresees dire shortages.

“We depend on skilled trades workers. They fix the cars we drive, they build and repair the homes we live in, and they do so much more,” Smidt wrote.  “Yet more than 1.5 million skilled trades workers will retire by 2024, and there are not nearly enough students entering the trades to fill those jobs.”

“Even at Harbor Freight Tools, as we’re building and opening two new stores every week, we struggle to find enough skilled electricians, carpenters, plumbers and HVAC technicians.”

Smidt isn’t the only funder worried about this growing skills gap. Recently, Inside Philanthropy reported on New America’s Partnership to Advance Youth Apprenticeship, an effort to expand pathways into the skilled trades through apprenticeships, which is backed by corporate funders like JPMorgan Chase and the Siemens Foundation, as well as the Annie E. Casey Foundation, the Joyce Foundation, the Ballmer Group, and Bloomberg Philanthropies.

Related: To Get More Young People Into Good Jobs, a New Focus on Apprenticeships

Smidt’s effort aims to get young people engaged with the trades even earlier, when they’re still in high school. The initiative is awarding this year’s Prize for Teaching Excellence, totaling $1 million, to 18 high school teachers. The three first-place winners will receive $100,000, with $70,000 going to the skilled trade programs at their schools, and $30,000 that each teacher can keep. For second place, 15 teachers will bring home $50,000, with $35,000 distributed to their schools and $15,000 for themselves.

Prize money goes a long way, especially for programs that lack significant funding, said Gerald Huffman, a construction technology teacher in Mississippi who won the prize in 2017. "The impact on our program is life-changing, since we only get $500 to $1,000 a year for our budget," Huffman said in the press release. "This is an opportunity to invest for our future."

Applications for interested teachers are open through June 17. Teachers can apply as individuals and in teams. The competition will announce winners in late October.

The Prize for Teaching Excellence is in its third year. Starting with a total of $500,000 for winners in 2017, the prize has grown steadily. In the first two years of the competition, 1,200 teachers from 49 states applied. Those teachers represented classes in auto tech, welding, carpentry, agriculture mechanics, plumbing and HVAC repair.

Smidt has sponsored similar prizes through Harbor Freight Tools for Schools, an initiative run through his Smidt Foundation. The foundation last reported assets just shy of $100 million on its 2017 tax forms.

Other initiatives sponsored through Harbor Freight Tools for Schools include the Harbor Freight Fellows Initiative through a three-year, $1.3 million grant. The institute nurtures students who demonstrate an interest in a skilled trade.

Through the Harbor Freight EdCorps, the Smidt Foundation partnered with Real World Scholars to sell products students build in their skilled trade classes. The initiative kicked off with work in California, Missouri, Tennessee and Pennsylvania.

Through Harbor Freight Scholars, another initiative backed by Smidt, the billionaire partnered with Ventura County, California, to boost skilled trade learning throughout the district. The program also donated tools to skilled trade programs to the Los Angeles and Chicago public school districts.

In his support for skilled trade education, Smidt stands out for his dedication and laser focus on the field. The Partnership to Advance Youth Apprenticeship is one of only a few other nonprofit initiatives in the trade skills niche that we know of. The larger picture, though, is that many philanthropies have been backing efforts around skills and job training, as increasing numbers of funders work to crack the code on economic mobility.

Programs that train workers for skilled jobs attract a lot of backers on the corporate side. JPMorgan Chase supported that work as far back as 2013 through the bank’s New Skills at Work Initiative. Earlier this year, the company pledged $350 million more to workforce development over the next five years. Walmart and Citi have also gotten in on the trend.

On the foundation side, the Ballmer Group, which is dedicated more broadly to economic mobility for kids and families, partners with several nonprofits that train youth for a job market demanding increasingly sophisticated skills. Beyond the Partnership to Advance Youth Apprenticeship, the foundation backs Genesys Works, which teaches high school students the technical skills required by companies, along with the National Fund for Workforce Solutions and National Skills Coalition.

The fledgling Obama Foundation is another funder that has focused on youth workforce training, with an emphasis on kids from the Southside of Chicago. The hope is that when the presidential library opens, it will be staffed by local southsiders.

With his education philanthropy, Smidt may turn out to have the most in common with Michael Bloomberg. The billionaire and former mayor of New York City spoke at length about the inclusion of career readiness in curriculum and the importance of vocational schools during the announcement of his plans to invest $375 million in education during the next five years.