The thoughts and speech of other characters is one technique used in indirect characterization. Keep in mind that in this short story, it is one of the most important modes of indirect characterization because it fully supports the main theme of the story, which is the disconnection between a troubled teenager and the adults around him. The speech and thoughts of others about Donny's performance in school, his behavior, and his general attitude may or may not be entirely revealing of his true character, but they show how his behavior is defining his character in a world where the adult expectations and values are not understood nor lived up to by the main character.
In the very beginning of the story Daisy learns from the principal that her son is "noisy, lazy, and disruptive," and that he fools around and won't respond in class. Her response to the principal after summarizing her strict home rules is that Donny tells his parents he doesn't have any homework or already finished it, indicating he is lying. Another session with the principal later reveals (to both parents) that Donny's behavior and performance are getting worse.
In his sessions with Cal, however, we get to see characterization from Donny's point of view. It is through Cal's open-ended questions (and relationship building techniques) that Donny starts to reveal himself. Cal later tells Donny's parents that he believes the child is "underestimated," has low self esteem, and doesn't feel like anyone listens to him.
Ultimately, even though he builds a more personal relationship with Cal, Donny's behavior never does actually change. Instead of admitting he failed, Cal labels Donny as "emotionally disturbed."
Through the thoughts and speech of each of the other adult characters in this story, it is obvious that Donny is a troubled teen whom none of the characters fully understands. It is also ironic, however, that it is precisely because of the misunderstanding and disconnection he has with the people who should care about him the most that Donny is ultimately such a failure.