Erica L. Green of the New York Times wrote a detailed expose of charter schools, some with the backing of billionaire donors like Bill Gates and Michael Bloomberg, that have sought and received federal coronavirus aid intended for small businesses. Thus, they collect funding as “public schools,” yet collect federal aid as small businesses. Peer-reviewed studies have shown that charter schools, at least in Texas, already have more funding than public schools. The Bullis School, mentioned in the article, pleads poverty and need, but local public school parents and the local school board have long complained that the charter operates as an exclusive publicly-funded private school for rich families in Los Altos, California, who each contribute $5,000 to subsidize the school. Excellent investigative reporting by Erica Green.
Kudos to Marla Kilfoyle, grassroots coordinator for the Network for Public Education (veteran teacher and former national Director of the BATS), who scoured board minutes of charters to compile a partial list of those that took PPP funding meant for small businesses. The Trump administration refuses to release the names of recipients of coronacmvirus funding.
Green writes:
WASHINGTON — Charter schools, including some with healthy cash balances and billionaire backers like Michael Bloomberg and Bill Gates, have quietly accepted millions of dollars in emergency coronavirus relief from a fund created to help struggling small businesses stay afloat.
Since their inception, charter schools have straddled the line between public schools and private entities. The coronavirus has forced them to choose.
And dozens of them — potentially more because the Treasury Department has not disclosed a list — have decided for the purpose of coronavirus relief that they are businesses, applying for aid even as they continue to enjoy funding from school budgets, tax-free status and, in some cases, healthy cash balances and the support of billionaire backers.
That has let them tap the Paycheck Protection Program, which Congress intended to keep businesses and nonprofits from shedding jobs and closing their doors. Parents, activists and researchers have identified at least $50 million in forgivable loans flowing to the schools, which, like all schools, are facing steep budget cuts next year as tax revenue, tuition payments and donations dry up.
“To me, either you’re a fish or a fowl — you can’t say you’re a public school one day, but now because it’s advantageous, say you’re a business,” said Carol Burris, the executive director of the Network for Public Education, a group that scrutinizes charter school management, and whose early donors included a teachers’ union.
The group identified at least $48 million in funds from the Paycheck Protection Program going to 27 charter schools across the country by watching virtual school board meetings and poring over meeting minutes and news reports, which were also reviewed by The New York Times.
“They’re saying they want this money to protect their fund balance when you have people in soup lines,” Ms. Burris said.
To charter school critics like Ms. Burris, the bailout underscores the long-held sense that charter schools do not play by the same rules that apply to their conventional public school counterparts.
Charter leaders say traditional schools have long benefited from capital that they cannot obtain.
“Those who are questioning our eligibility for this program are those who question whether we should get money at all,” said Nina Rees, the president and chief executive of the National Alliance for Public Charter Schools.
But privately, the charters have been girding for a public-relations nightmare.
Blake Warner, a board member of Summit Public Schools, a charter chain on the West Coast, said during a virtual board meeting last month that he did not know how taking the Paycheck Protection Program loan would affect the schools’ position in the “charter school versus not-charter school war being waged in California.”
“But I do think that since P.R. is 90 percent of the issue, that is a pretty significant consideration,” he said.
Mr. Warner also expressed concern that the schools could face criminal penalties for claiming they faced “economic uncertainty.”
“If there is a risk that we run, it is the cash balances that sit on our balance sheet today, with the benefit of hindsight, somebody coming in and saying, ‘You didn’t need it,’” he said.
Elite private schools have already faced criticism for taking the coronavirus relief loans. But private schools were largely shut out of emergency aid, and their revenue streams, such as tuition, donations and endowments, are shrinking. Dozens of private schools have already announced closings related to or caused by the coronavirus crisis.
Charter schools are different. Although they are independently run, they operate as part of local school districts, do not charge tuition and are open to all students, albeit through lotteries. Like traditional public schools, they generally receive per-pupil funding from their districts, and as such, they were eligible to receive a share of billions of dollars in relief that Congress allocated to public education.
But because a vast majority are run by nonprofit companies, they also qualified for the Paycheck Protection Program.
Charter recipients of the forgivable loans include wealthy networks like Summit, whose most recent tax filings show it had assets totaling $43 million and an endowment, and it paid its chief executive nearly $500,000. The charter network receives donations from the philanthropic organizations of Mr. Bloomberg and Bill and Melinda Gates, and the Bezos Family Foundation. And its business-savvy California board of directors includes Meg Whitman, the chief executive of Quibi and former chief executive of eBay.
In many cases, charter school leaders have openly acknowledged that they did not apply for the funds because they were in dire financial straits. The board chairman of one Oakland, Calif., charter school network, Education for Change Public Schools, said its $5 million loan would be a “cheap form of cash-flow financing.”
In North Carolina, the founding board member of one charter school, Pine Springs Preparatory Academy, told Ms. Burris that it was “like a private school for wealthy kids” — it accepted $550,000. In Washington, D.C., several charter schools have refused to say whether they took the loans. One San Diego charter was awarded a $2.25 million loan in May, then laid off a third of its teachers. One of the terms of the program is the loans convert to grants if recipients retain or rehire employees.
Parents and researchers in Oakland have tracked about $19 million awarded to charters in the Oakland Unified School District. A report released Monday by In the Public Interest, a policy and research group that scrutinizes the privatization of public goods, found that 70 percent of the district’s 43 charter schools had accepted the funding. Combined with federal relief funds available to all public schools, the report says, the district’s charter schools would receive at least $23 million in federal funding, which breaks down to an average of nearly $2,000 more per student than traditional schools.
“We have money for small businesses, we have money for schools. And when they’re using both of these sources for the same need, it’s doing a real disservice to the community,” said Clare Crawford, a senior policy adviser at the research group.
The report was done in partnership with a parent group, Parents United for Public Schools, whose members aggressively tracked the Paycheck Protection Program funds. The group’s co-founder, Kim Davis, came across the charter funding by accident while on a charter school meeting held on Zoom, and said she was “stunned.”
“Virtually all families in Oakland are doing GoFundMe because someone lost their job, and in part, it’s because their business did layoffs and didn’t have P.P.P.,” Ms. Davis said.
The National Alliance for Public Charter Schools lobbied hard to ensure Congress included the schools in the program, in part because charters schools in several states are not guaranteed district-level funding, let alone the $13.5 billion in emergency funds that Congress gave states wide discretion over….
Francis La Poll, the chairman of the board at Bullis Charter School in Silicon Valley, said that his school took a $2 million loan to help mitigate the impact of an anticipated 8 percent cut in state funding.
The school receives about $5,000 less per student than traditional schools, which its foundation, a separate entity, seeks to make up by asking parents to voluntarily donate $5,000 per year. Mr. La Poll said he turned to the program after the school’s foundation; Bullis had to cancel some upcoming fund-raisers because of the pandemic, and banks were reluctant to lend to the school because of the pandemic, and banks were reluctant to lend to the school because it did not have a history of borrowing.
“Charter school teachers are teachers, too,” Mr. La Poll said. “Are they not to be protected? Are they not part of the economy?”
But behind that certainty has been soul-searching. Summit’s chief executive, Diane Tavenner, brushed away several concerns at the May meeting, including “public shaming.” She urged the board to take the funds, saying that “the benefits far outweigh the risks.”
The board ultimately accepted the loan, identified only as more than $2 million because it is subject to audit, at its May 18 meeting. By that time, Ms. Tavenner said the money had come in, and with the recent announcement from Gov. Gavin Newsom of California of 10 percent budget cuts next year, “further bolsters our case, as a nonprofit that’s operating schools, of our economic uncertainty.”
She said the board could respond to critics by asserting that traditional schools have “always had access to resources that we’ve never had, and so this is our version of those resources that will create a bit of a level playing field.”
A spokeswoman declined to divulge the amount of the loan, but said Summit “met the requirements for the program, applied for the program, qualified for the program and accepted the loan award.”
When board members at Education for Change Public Schools, which runs seven schools in Oakland, debated whether to accept their $5.25 million P.P.P. loan last month, Mike Barr, a board member, warned that the organization could not “double-dip.” It would have to “treat this as a loan” and not cash that could not be used to pay teachers more or plug budget gaps, he said.
That was when the organization’s board chairman, Nick Driver, said the loan could be a “cheap form of cash-flow financing,” because it was low interest, according to a recording of the meeting reviewed by The Times. He also raised an “optics issue,” where “anti-charter folks are making this about charter schools getting money from the federal government when they’re not getting any.”
“I freaking welcome that conversation,” Mr. Barr replied.
In an interview, Hae-Sin Thomas, the chief executive of Education for Change, said the loan would be used by the school — where 90 percent of students come from low-income families — to support students whose families have been hit hardest by the virus.
The network is facing a $4 million cut in state funding, and the staff members who are at risk of being laid off are the ones “doing the hard work of managing the 5-year-old temper tantrums, the 8-year-old who is having a hard day and storms out of class,” Ms. Thomas said.
“Every dollar that I can legally get to ensure stability for my community, I would be hard-pressed not to take,” she said. “It’s going to be a rough fall.”
The board of The Learning Community, a public charter school in Rhode Island, “struggled mightily” with its decision to turn down a $1.3 million loan, said Sarah Friedman, the school’s co-director.
The school faces “tremendous needs,” she said, with 84 percent of its students qualifying for subsidized meals and 100 percent coming from the communities hit hardest by Covid-19.
“While we are technically a nonprofit, our primary identity, mission and value is as a public school,” Ms. Friedman said. “We believe that we need to stand with all public schools in demanding the financial support, during and after this crisis, to meet the staffing and facilities needs to give all of the state’s children the safe and high-quality education they deserve.”
. . . public schools “. . . always had access to resources that we’ve never had, and so this is our version of those resources that will create a bit of a level playing field.”
It seems to me that even many charter people just don’t “get” the mire of foundational rot they are standing on. CBK
Charters also get loads of free advertising from ed reform “news outlets”
The 74 gave the CEO of Summit charters a whole series to promote and market her charter schools:
“Class Disrupted is a weekly education podcast featuring author Michael Horn and Summit Public Schools’ Diane Tavenner”
https://www.the74million.org/article/listen-class-disrupted-podcast-episode-4-why-are-we-doing-school/
Compare/contrast with ed reform coverage of public schools- relentlessly negative, failing students, no successful schools or students ever mentioned, etc.
Go look on any ed reform echo chamber outlet and try to find a single positive story about any public school or even public school student. It’s advertising, not analysis.
It’s brutally unfair to public school STUDENTS too- they’re always depicted as violent and low performing because they have to be to sell charters and vouchers to parents.
“As pandemic tests public schools, Betsy DeVos pushes school choice”
No one works on behalf of the unfashionable public schools. We’re paying thousands of ed reformers in government positions and they refuse to do any work on behalf of 90% of US students because they are ideologically opposed to public schools.
Public school students can do much, much better than this. They can find and hire and pay adults who perform some useful work on behalf of their schools.
These are good jobs! Let’s start filling them with people who have some interest in public education.
Can anyone point to a single practical effort anyone in ed reform has made on behalf of any PUBLIC school or student anywhere in the country during this crisis?
I have no earthly idea how the US public ended up paying thousands of people who are ideologically opposed to the schools the vast, vast majority of Americans attend.
Our students receive NO value from these folks. They contribute nothing positive.
Here’s what Fordham contributes to Ohio public school students as they return to school:
“Implement a revamped report card and issue school ratings
Pare back eligibility for performance-based EdChoice vouchers
Expand eligibility for income-based EdChoice vouchers
Require, subject to capacity, district participation in open enrollment
Remove geographic restrictions on charter schools
Expand the number of districts eligible for regulatory exemptions
Provide bonus funding to both high achieving and improving schools
Expand the quality charter school incentive fund”
Yes, you read that right. Once again their single contribution to our students is to test them.
Public school students apparently attend school solely for the purpose of being tested by people who lobby against public schools. This is the raw deal public school students get under ed reformers.
Chiara That’s part of the “first, starve the beast, then kill it” aspect of the problem.
If there’s any truth to the “public schools are bad” argument (and in SOME, not ALL cases, there is), we can look to the long-term starving of public education for a large cause. The de-funding and diminishing of public education is at the service of the multi-motivated movement to privatize all-things-public.
In a deeper vein, it’s also about controlling the curriculum according to many forms of funder bias, political and otherwise; for instance, anti-democratic, the erasure or rewrite of “certain” unflattering corporate historical moments, the corporatizing and capitalization of ALL things human, including how we think (transactional-only), and/or Betsy-type religious zealotry.
Some charters are probably serving their children well. However, it seems to me the ones who are truly heat-felt about what they do are extremely short-sighted . . . they fail to see that the privatization and capitalization of education rips education away from its democratic-community foundations . . . it’s in the business (literally) to serve not one master (the children) but two masters . . . the other being the sophistic whims of oligarchs who may or may not know and embrace the historical damage to democracy as such that they are doing. CBK
“While we are technically a nonprofit, our primary identity, mission and value is as a public school,” Ms. Friedman said. “We believe that we need to stand with all public schools in demanding the financial support, during and after this crisis, to meet the staffing and facilities needs to give all of the state’s children the safe and high-quality education they deserve.”
Except they don’t “stand with public schools”. They don’t do any advocacy at all for students in public schools, including on budget cuts, ESPECIALLY on budget cuts.
“While we are technically a nonprofit, our primary identity, mission and value is as a public school,” Ms. Friedman said. “We believe that we need to stand with all public schools in demanding the financial support, during and after this crisis, to meet the staffing and facilities needs to give all of the state’s children the safe and high-quality education they deserve.”
What they are actually doing with this argument is:
using the children they serve as hostages–let us in on the deal or the children will suffer.
It’s just another kind of distortion–and the simpletons working for them may not even understand that, in fact, they are perpetrating a fraud. CBK
But this quote is from a school that decided to turn down the smallbiz loan they supposedly qualified for, no? I think they are saying they are publicly-funded, therefore see themselves in solidarity w/ public schools demanding appropriate funding.
I am tired of hearing about the lack of funding for charter schools. The eagerness of charter schools to tap small business loans is another example of the charter industry’s greed and hot air marketing of the lie that charter schools are underfunded (and public).
It is estimated that since 1995, the Federal Charter School Program has distributed about $4 billion, not counting the recent $65 million Secretary DeVos is forking over to 13 charter management franchises to create and expand charter schools (April 10, 2020).
No less than nine federal grant programs are available for charter schools, including two funds for facilities, two for national marketing and leadership, and others for creating, “replicating,” and expanding these schools. Replicating is an apt word for the franchise-like branding of many charter management organization operating across state lines with a “one size must fit all” instructional and financial package.
Add billions for charter schools from private foundations, including the Walton family (Walmart), Bill and Melinda Gates Foundation (Microsoft), more recently the Chan-Zuckerberg Initiative (Facebook) and many more, especially in the tech industry.
The push for charter school expansion with federal funds can be traced to NCLB, 2001-02. Although many districts offered magnet schools and other choices, this law promoted schools that could bypass oversight by elected school boards, and ignore teacher unions in matters of seniority, salary, and benefits. These school could also avoid some requirements of NCLB. These schools were labeled “public” only because they were eligible for a per-pupil tax subsidy. Charter schools were and still are “authorized” by independent chartering agencies established by state laws, easily rigged to allow for fiscal mischief.
Under Title V, NCLB actually paid for the cost of charter school construction or leasing along with salaries, materials, and other expenses for up to three years. Additional funds were earmarked to market the concept of charter schools and to establish bank-like entities, exclusively devoted to securing investments for charter schools and managing these for their benefit (for example, providing loans for operations or for facilities).
Charter schools were also free of the draconian NCLB requirement of making AYP (adequate yearly progress) in raising testing scores. Charter schools could become exempt from other NCLB requirements through “waivers” granted either by state chartering laws and agencies or at the federal level, by the secretary of education.
NCLB also opened opportunities for an emerging “education industry trade association” set up to market for-profit schools and to show entrepreneurs how they could secure federal funds and market “education” as an investment. The endgame was a rapid expansion of for-profit schools and services, including per-pupil tax-support for online programs. A history of the 1990s movement toward privatization and corporate profiting from schools can be found here. https://www.mackinac.org/archives/1995/s1995-05.pdf
Online education has been riddled with fraud. This should be a major concern with the current and foreseeable reliance on “remote” education to address the COVID-19 virus. New federal funding for online instruction in the CARES Act and the not yet authorized HEROES Act is sure to invite fraud and abuse, unless we all learn lessons from recent history.
One horrible example is Ohio’s Electronic Classroom of Tomorrow (ECOT). ECOT was the biggest charter school in Ohio, with a peak enrollment of over 15,000 students. That allowed ECOT to collect over $100 million a year in per-student state funding. Ohio’s charter law did not require proofs of online class participation until 2015-16. Under those new requirements, ECOT mustered documentation for 6,300 students but was funded for 15,300 students. Fraud continued in the following year and since then. The story of ECOT’s $60 million (plus) fraud is here. https://www.cleveland.com/metro/2018/05/ecot_officials_could_face_criminal_charges_for_hiding_data_from_state_ohio_auditor_dave_yost_says.html
For a recent account of mischief, fraud and abuse in the charter industry and other efforts to privatize education, and the growing resistance to those efforts: read Slaying Goliath: The Passionate Resistance to Privatization and the Fight to Save America s Public Schools by Diane Ravitch.
Also pay attention to the extreme reliance on “remote” delivery of instruction falsely marketed as online learning. Learning is NOT the inevitable outcome of encounters with computer screens. School plans for remote learning due to COVID-19 are in process and running smack into a brick wall of inadequate funding. The first and low-hanging cuts are in personnel, not replacing teachers who retire, and in support staff just at the time they are most needed–social workers, nurses, and counselors. Time to see if we can make a silk purse from a sow’s ear. Call in the creatives.
bethree5 I read this: ““We believe that we need to stand with all public schools in demanding the financial support, during and after this crisis, to meet the staffing and facilities needs to give all of the state’s children […]
. . .”
. . . as equating their charter school with public schools (looking for an “equal playing field)”); not as supporting public schools and “standing with” them. But there ARE some fuzzy semantics at work there.
If they turned down the money (??), then it’s either (1) their whole-hearted ignorance of the destructive relationship at the heart of the whole public-private debate (whatever charter schools want to call themselves); (2) an attack of conscience, probably temporary; and/or (3) the awareness of the bad PR that is mentioned in the note. CBK
In response to complaints that Betsy DeVos and the US Department of Education do no work on behalf of students in public schools, DeVos’ PR team released a schedule.
You can read it here:
https://www.washingtonpost.com/local/education/betsy-devos-coronavirus-private-schools/2020/06/15/0c484d94-a50b-11ea-b473-04905b1af82b_story.html
They’ve accomplished 11 phone calls and 5 media interviews in the last 4 months- all the interviews went to conservative outlets- true believers in the anti-public school cause.
That’s the entire response to a pandemic that closed every public school in the country.
Public schools will open in the fall and they’ll do a good or bad job, but none of that will have anything at all to do with the thousands of ed reformers we’re paying at the federal level- they did nothing for our schools. Maybe it’s better. Perhaps they best we can hope for is they ignore our schools and students completely.
I am very pleased to be a member of NPE. The appearance of this well researched article in THE New York Times is important. It will turn heads. Thanks to NPE for contributing to the research. Charter businesses are private businesses that should be put out of business so that public schools can do the work that needs to be done without the funding drain, just as charter businesses should have to give back all the financial assistance so that legitimate businesses can pay their employees to do the work that needs to be done without the funding drain. Charter school businesses suck the life out of society in so many ways. There is no benefit from them, only loss. There is no place for them.
Thanks, LFT. NPE did the research. The Times verified it, got quotes from charter advocates defending the practice, found some who admitted it was reprehensible, and published a terrific article. This was a signal effort by NPE and represented many hours of work by Burris and Kilfoyle. Since you have joined our Wednesday night sessions, you have met the entire NPE staff: Burris, Kilfoyle, and Cimarusti. Small but powerful!
Yes, indeed! I find the Wednesday Zoom meetings very enlightening. NPE and you do a great job of hosting insightful guests. I downright regret having to miss you tomorrow to attend a UTLA area meeting. I’ll be back after that.
powerful and dedicated: a great combination
Biden must be elected president…ok. But that should not let him and whoever he chooses as his vp running mate to have a license to agree to continue to let public schools be abused by charter schools, as well as some of the emerging, poorly defined schools of choice.
Years ago, Ms. Green used to write for the Baltimore Sun.Since the B.S. was pro-charter, so was she at the time. She was guest on a call-in radio show about education, and I asked her directly to look at the money that charters were siphoning away from public schools. Her answer “YOU could do that yourself”. I notice that the research of this article was done by a parent group, which Green then generously turned into a story.
Baltimore might be in better shape, with less charters draining our resources, had she come around sooner, or if we had a better newspaper willing to print the truth.
Long live the New York Times.
Paz,
The editorial board of the NY Times–mainly, one person who writes the education articles–has been stridently pro-charter.
Erica Green wrote a terrific article. It is not easy to stand up to the most powerful people in society. Much of the research was gathered by the Network for Public Education, and it was necessary to say that we had accepted money from a teachers’ union some years ago (the Chicago Teachers Union gave NPE start-up money back in 2013-2014), but we are not union-funded. We are funded by our members’ small contributions. Isn’t it bizarre that it is okay for the charters to be billionaire-funded, but suspicious if a pro-public education group gets any funding from people who work in public schools? NPE continues to receive new information about charters that received millions of dollars from the PPP, which was supposed to go to small businesses to enable them to pay their workers instead of laying them off.