Friendly competition: sleek education management firms are a vital component of the charter school movement, but innovation is more likely from the visionaries who create unique, grassroots charters - Forum

Education Next, Wntr, 2003 by Bryan C. Hassel

VERYONE HAS READ THE UBIQUITOUS FEATURE STORY about a charter school--Jane and John Q. Public and their friends, sitting around somebody's kitchen table, dream up a different kind of school for their kids. Putting in hours of sweat equity, charging start-up costs to their credit cards, maybe even mortgaging their homes to bring their dream to reality. Making the economics work by raking parent involvement to a whole new level--parents driving buses, cleaning school bathrooms, mastering the intricacies of state financial reporting requirements.

Charter schools with origins like these can be compelling and unique, models of the outside-the-box approaches these schools are supposed to pilot. And most of the dramatic success stories from the charter world come from schools founded by teachers or community members. For example:

* KIPP Academy, Houston, At KIPP, a middle school founded by two former Teach for America members, one recent class entered with passing rates of 35 and 33 percent on state math and reading tests. The following year, the class's rates rose to 93 and 92 percent.

* The Accelerated School, Los Angeles. Opened by two teachers in 1994 and named Time magazine's "Elementary School of the Year" in 2001, the school reports that its scores on the Stanford Achievement test have jumped 97 percent since 1997.

* North Star Academy, Newark, New Jersey. Based on preliminary results from the spring 2000 state test, 88 percent of the school's first 8th grade class scored proficient or above in language arts (compared with 47 percent citywide), and 66 percent scored proficient or above in math (versus 21 percent citywide).

Numbers like these are eye-catching. But can these standalone, typically small charter schools serve as the basis for a sustainable, large-scale movement for change in education? Or are they likely to remain the exception rather than the rule? After all, starting an innovative, successful charter school is extraordinarily difficult, and few entrepreneurs seem cut out for the job.

Small Businesses

There are certainly reasons to think of successful stand-alone charter schools as an interesting but ultimately marginal phenomenon. Starting a public school from scratch is, in a word, difficult, It has become a cliche that charter schools, in addition to being educational institutions, have to succeed as small businesses--balancing their budgets; negotiating leases, financing packages, and contracts; and making payroll. Individuals and small teams--often teachers, parents, or community activists who have never run schools--are apt to possess some but not all of these skills and backgrounds.

Opening a new school also requires capital. Most charter schools receive federally funded start-up grants of $10,000 to $150,000 for one to three years. Beyond that, they cannot expect any public funds to flow until, if they're lucky, the July before they open. However, expenses can't wait, Principals need to be hired a few months before school starts, Ideally, teachers start at least a few weeks before students arrive, Then there are books and bookshelves, desks and desktop computers, and all the other supplies that need to be purchased. And all of that doesn't include the big kahuna of start-up costs: the charter school facility.

The first decade of charter schools has unearthed entrepreneurs who are willing and, in some cases, able to take on these herculean tasks. They've proven themselves able to secure the requisite start-up capital--by becoming enterprising fundraisers, by "partnering" with others who have deeper pockets, by finding creative ways to keep start-up costs down, or by going without amenities that are standard-issue in the typical district school. Even with all these challenges, approximately 2,700 charter schools will be open during the 2002-'03 school year, educating some 700,000 students.

This supply of entrepreneurs can work if we're talking about a reform that captures just 1 percent of the nation's public school market share. But what if we're interested in creating a set of schools that educate 10 percent, 20 percent, or an even greater share of American students? Are there enough social entrepreneurs out there to do that?

Let's consider this question. Nationally, the growth of charter schools was dramatic in the years following the passage of the initial charter laws (see Figure 1). In 2001 and 2002, however, the number of new charter schools opening in the fall actually declined compared with the previous year.

Statutory caps on charter schools have caused some of this leveling, but not all of it. Even in jurisdictions with few restrictions on new starts, the numbers tend to decline over time. It appears that within a given geographical area lives a limited supply of entrepreneurs willing to undertake starting a charter school, a supply that peters out over time. Not to zero, but to what amounts to a drop in the bucket of public schooling in a city or state.

Enter the EMOs

"Education management organizations," or EMOs, are sometimes touted as the solution to these challenges. According to the Center for Education Reform, 19 of these companies ran 350 charter schools in 2001-'02, about 14 percent of the nation's charter schools. Since EMO-run schools are typically larger than the average charter school, EMOs actually educate an even higher percentage of charter school students--perhaps 25 to 30 percent.