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Charter Schools Are Run by Education Management Companies as Nonprofits as Well as For-Profits, Business and Industry Trends Analysis

Charter schools are special public schools, with public funding, which operate in any of the grades K-12.  They are allowed freedom from many of the most onerous rules and regulations that govern traditional public schools.  In return, they may be held more accountable for results and are expected to turn out higher achieving students, as evidenced by test scores that show higher comprehension.  To some extent, these schools can be considered as laboratories.  It is hoped that they will innovate best practices and better utilization of teaching methods and technologies that can then be adopted by traditional schools.  In the upper grades, they are expected to show lower dropout rates and higher rates of students going on to college or trade schools after graduation from grade 12.  Generally, charter schools have a college prep mission.  They often make much higher demands on students in terms of coursework, homework and expected results.  The school day and school year tend to be longer at charters.
One of the most controversial developments in primary and secondary education has been the charter school, because a charter school by its nature is designed to break all of the rules and shake up the status quo.  The maverick style of charter schools is particularly controversial because they receive public funding and compete with traditional public schools for students, teachers and money.  In addition, they operate in the highly sensitive, politically explosive K-12 grades that can generate high emotional responses from parents, taxpayers, legislators and teachers, all at the same time.
Many boosters of these schools hope they can be more cost-effective, while, at the same time, achieving better results.  Like other schools, they receive public funds based on per pupil enrollment.  However, in some states they receive less than 100% of the funds allocated to similar traditional schools.  In other states, additional funds or loans may be made under special programs, or the schools may receive additional support from private donors who are big boosters of the charter concept.  In most states, charters do not receive money to build physical school buildings.  However, it is becoming common for charters to take over buildings that were formerly occupied by traditional schools and are no longer needed for traditional operations.  In a few cases, charters share facilities with traditional schools—literally operating two different schools within one building.  Charter schools are entitled to federal funding for which their students are eligible, such as Title I and Special Education monies, and special education students are typically served by charters along with everyone else.  Federal legislation has been reasonably supportive of the charter system, and the federal government does provide grants to help charters to manage start-up costs.  A small number of charter schools are operated by for-profit companies.  Parents, churches and foundations are frequent donors to cover charter start-up costs and operations at nonprofit charter schools.  Foundations, including the Bill and Melinda Gates Foundation (Microsoft founders) and the Walton Family Foundation (Wal-Mart founders), are particularly keen to find solutions to the daunting challenges posed by certain public schools and districts that are consistently underperforming.

The Difference Between a Charter School and a Voucher System:
A charter school is a non-traditional school that may be nonprofit or for-profit.  Charters operate in the K-12 grades, but some offer only a limited number of grades.  Charter schools may be publicly funded by the same local school board budgets that fund traditional schools.  They operate under special regulations that let them bypass many of the rules that govern traditional public schools, with the hope of attaining a high level of student achievement in a cost-effective manner.  Thousands of charter schools operate within the U.S.A voucher system provides parents with a certificate that has monetary value which can be applied to tuition at the school of the parents’ choice, public or private.  The voucher is issued by a local or state authority and paid for out of state and local education budgets.  It enables the parents to have significant levels of choice as to where and how their children will be educated.  The first modern school voucher system in America was launched in 1989 by the Wisconsin state legislature, targeting students from low income homes in Milwaukee.

     Charter schools in the U.S. date back to the mid-1990s and were typically started by parents looking for an alternative to traditional schools.  Their motives may have included concern about the performance or safety of local schools, a desire to cater to exceptional children, religious concerns, or concerns about the geographical desirability of the normal schools to which their children would be assigned.  Nearly all U.S. states allow charter schools, at least to some extent.
One of the most admired charter school systems that operates on a large scale is the Knowledge is Power Program (KIPP).  Other well-established systems include Uncommon Schools, Achievement First, Green Dot and AspireKIPP’s founders, Mike Feinberg and Dave Levin, were teachers.  They began by launching a fifth-grade public school program in inner-city Houston, Texas.  KIPP is common sense in action.  Its basic tenets include a commitment from teachers (who must communicate personally with parents on a regular basis and be available after hours, by phone or otherwise, to assist with homework questions), longer school hours and a commitment by students to apply themselves.  Highly successful charter schools such as KIPP operate on a low- to no-tolerance of slackers basis.  There are no excuses for poor performance by students or teachers, and there are high expectations of parental involvement with both the school and the students.  These schools often focus on helping lower-income children.  Since nonprofit KIPP’s modest 1994 founding, hundreds of its schools are now nationwide, on campuses ranging from elementary to high schools.
The organization states that 96% of KIPP students are African American or Latino, and 88% are eligible for the federal free and reduced-price meals program, indicating that they are from homes of modest financial means.  Students are accepted regardless of prior academic record, conduct record or socioeconomic background.
The results of charter schools vary widely by city and state, as well as by years of operation.  Many have posted disappointing results.  The results at KIPP and other top charters, however, are extremely promising.  Despite the fact that students come from lower-income, low-achievement households, by the end of 8th grade, the majority of KIPP students outperform their peers nationwide in reading and math.  These are students who might have been stuck in dismal, underperforming public schools in poor neighborhoods without KIPP.

Internet Research Tip:  A Charter School’s Own Report Card
KIPP publishes extensive statistics on its enrollment, student demographics and educational outcomes.  It is a vital insight into a well-run charter school organization of significant size.  See

     Uncommon Schools, a network of public charters in Massachusetts, New Jersey and New York, won an Eli and Edythe Broad Prize for Public Charter Schools.  The prize committee found that Uncommon Schools students are outperforming their low-income and African American peers in the states where they operate, and they have closed income and ethnic achievement gaps four times as often as other large charter management organizations across the country.  Recent winners include DSST Public Schools, Success Academy, IDEA Public Schools, Noble Network and KIPP Schools.  See:
A study by CREDO, the Center for Research on Education Outcomes, published in 2015 found that charter students in urban schools gained proficiency equal to an additional 40 days of schooling per year in math, and 28 days in reading, compared to students in traditional schools, while the math gains were identical.  Low-income Hispanic and African American students did much better in charters than their peers in traditional schools, while white children did worse in charters on average.  Some major school districts, including those in Houston and Denver, have been experimenting with adopting what they believe to be the best practices of widely admired charter schools into their traditional schools.
For-Profit Charter School Models:  While charters are typically launched as nonprofits, an alternative for-profit charter school model has evolved.  This trend has added fuel to the entire charter school controversy, since public funds are being funneled to private enterprises.  As commonly happens in massive government-funded programs, such as Medicare and Medicaid, a certain amount of fraud and poor utilization of funds has occurred.  For the most part, however, for-profit charters are serious businesses with good intentions. 

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