Why do we see the same story in state after state? Wherever for-profit charter schools exist or wherever state law allows charter schools to hire for-profit management companies, someone is making a lot of money that was supposed to go for educating students.
The latest story comes from Florida, where for-profit charter entrepreneurs are making big dough.
Noah Pransky of WTSP writes about the financial success of for-profit Charter Schools USA.
“Charter schools are tuition-free public schools that are authorized by – but not operated by – each school district. For each student who “chooses” a charter, his or her school gets state dollars that would have otherwise gone to the school district.
“Charter Schools USA (CUSA) has been operating charter schools in Florida for 20 years, including recently-opened schools in Hillsborough County: Woodmont Charter, Winthrop Charter, and Henderson Hammock Charter. Although charter schools sometimes struggle financially at first, CUSA eventually collects a 5% management fee from each to provide administration and guidance.
“But 10 Investigates found a much bigger pot of money CUSA has been able to tap into: rent. When the company helps open a new school, its development arm, Red Apple Development, acquires land and constructs a school. Then, CUSA charges the school high rent.
“For example, Winthrop Charter in Riverview may struggle to balance its budget this year thanks to a $2 million rent payment to CUSA/Red Apple Development. The payment will equate to approximately 23% of its budget, even though CUSA CEO Jon Hage has been quoted as saying charter school rent should not exceed 20%.
“Both CUSA and Winthrop Charter officials tell 10 Investigates that the schools are operated as nonprofit entities, and robust FCAT scores and happy parents are proof of success.”
As long as the scores are high and the parents are happy, who cares what happens to taxpayers’ dollars?
Pransky interviewed Pat Hall of the League of Women Voters, which published a study critical of the financial dealings of the charter industry:
“But among CUSA’s critics is the League of Women Voters, which recently released a study suggesting a troubling lack of separation between a charter school’s advisory board and for-profit management companies. It also indicates charter school teachers aren’t often paid as well and profits all-too-often play a role in educational decisions.
“That means that children aren’t getting what they’re owed by the public funding,” said Pat Hall, a retired Jefferson High department head and Hillsborough County’s education chair for the League of Women Voters.
“The study also revealed school choice creates a higher risk of disruption to a child’s education, as “statewide closure rate of charters is 20%” and “Charters are 50% of all F-rated schools in 2011.” In the last week, last-minute problems displaced a hundreds of charter school students from St. Petersburg to Delray Beach.
“Hall acknowledges many charter schools are teaching children in unique and successful ways, but says Charter Schools USA isn’t offering students anything that’s not available in public schools. She adds that the schools are so focused on FCAT fundamentals, they forego many traditional aspects of the school experience.
“While many CUSA schools may not have amenities such as a library or cafeteria, a company spokesperson said moving those amenities to the classroom can improve a student’s learning atmosphere.”
Diane Ravitch's blog 
Yeah, if this goes on I predict we will see some real corruption in the formerly pristine real estate industry. Who knows what dominos will fall after that — perhaps even Savings & Loans, heaven for bid❢
CBS (Charter School-backed Securities), anyone?
I’m not sure this is the place to ask the question, “What happened to the post about White Hat Management in Ohio?” It can no longer be found on Diane’s blog. The content was very interesting, important, and alarming since some of us are seeing similar things happening in our district.
Erin – Does this link help?
https://dianeravitch.net/?s=%22white+hat%22+ohio
Thank you for the link. It does provide some good information. The post for which I’m looking is titled “Ohio: Will the Court Allow White Hat Management to Privatize Its Public Assets.” When I look for it, I get a 404 no longer found message.
Erin,
Contact Bill Phillis of the Ohio Coalition. For Equity and Adequacy
Erin, the reason you get a 404 page not found message is that I posted by accident and it comes out tomorrow with two other articles on same subject.
Erin, you will see it tomorrow
Thank you, Diane, for everything you are doing for our teachers, students, country. You provide information, inspiration, and a sense of purpose and belonging to everyone who reads and comments on your blog.
And, I will contact him!
I’ll be the first to admit that financial wheeling and dealing is not my forte and I often have trouble getting my head around deals like this, but it seems to me that someone (besides, of course, the kids, teachers and community I mean) must be getting screwed in this deal. If these charter schools are paying exorbitant rent to this management company, how in the world are they getting by, let alone making enough money to make it worth while for their own board/CEO/execs? I mean, not that I feel sorry for such charter execs, but I’m wondering what’s in it for them and why do they get into the racket? Are they getting kickbacks from the management company or what?
Excellent report by a reputable group. Appendix I has some profiles of charter vs public schools in a sample of counties. I hope this report becomes a model for a national effort. I attended elementary and secondary schools in Florida, so the county names register in special ways.
However a school comes into existence, as a public, private, or public charter institution, it cannot and should not be judged solely in terms of its highest-level finances. In each of these cases, quite apart from all that, there are examples of extraordinary schools, with visionary leaders and dedicated, hard-working teachers who form real learning communities where every child matters. It’s a terrible mistake to paint with too broad a brush–to overgeneralize. A school is not its facilities budget and its upper-level executive compensation. These are a tiny part of the whole. The essence of a school is to be found in millions of interactions among parents, kids, teachers, and administrators. It’s important not to lose sight of that. There are great public schools, great private schools, and, yes, great charter schools. If parent after parent after parent says, “All I know is that my kid is getting a great education and is excited to get out of bed in the morning,” then that should give people pause. Something special is going on there. And such is the case in many places in the country today.
There were one-room schoolhouses in nineteenth-century America with no gym, no cafeteria, no library, no track, no theater but with a teacher who cared deeply about her kids, about their well being and their intellectual, physical, moral, and spiritual growth. Often these schools were run by teachers who were extraordinarily idealistic–who had imbibed deeply at the spring of essays by Ralph Waldo Emerson and were very idealistic and actually walked the walk–took the time with individual kids to give them the attention they needed. One of the unwritten histories of our great nation is the history of the work of those legions of selfless, dedicated schoolmarms. Often, with charters, today, the facilities, in the beginning, are bare bones, not because some execs are raking in big bucks but because facilities are very, very expensive and the available funding is meager. But in some of these schools, amazing things are happening because there are teachers there who are exemplars of that tradition, ones who understand that the most noble of all professions–the profession of the Buddha and Zhuangzi and Socrates and Jesus and the Baal Shem Tov–is that of the teacher. And to be a teacher, as every teacher knows, is to make do with whatever is available while never losing sight of the goal–the development of the precious children in their charge.
I wish someone would investigate all the charter doings in Utah. A former state senator who pushed a lot of charter legislation (and then resigned in disgrace when he was caught driving drunk), and the son of the state senator who took his place both work for Academica West, a huge management organization in northern Utah. And that’s just my state senatorial district. There are others that I don’t know as much about that think that charter schools are awesome and that public schools are all a failure. I’m sure they’re making money hand over fist in charters, too.