Peter Greene reviewed the Network for Public Education’s report on for-profit charter schools in Forbes, where he is a regular columnist.
He writes:
It has become cliche for politicians and policy makers to oppose “for profit” charter schools. It’s also a safe stance, because most people agree they’re a bad idea; for-profit charter schools are not legal in almost all states.
But charter school profiteers have found many loopholes, so that while they may not be able to set up for-profit charters, they can absolutely run charter schools for a profit. That may seem like a distinction without a difference, but the difference is that one is illegal in almost all states, and the other, as outlined in a new report, can be found from coast to coast. The new report, “Chartered for Profit,” from the Network for Public Education examines the size and reach of “the hidden world of charter schools operated for financial gain.” (Full disclosure: I am a member of NPE.)
The most common workaround for operating a charter school for profit is a management corporation. In this arrangement, I set up East Egg Charter School as a non-profit; I then hire East Egg Charter Management Organization to run the school, and that is a for-profit operation (known as an EMO).
An EMO is an educational management operator.
In some cases, the school and EMO are enmeshed with each other, sometimes with family ties. In Arizona, Reginald Barr runs a non-profit EMO that manages four charter schools; he also, with his wife Sandra, runs for-profit Edventure, which collects $125 per student for managing the schools. The schools lease property from a company owned by the Barrs and hire another Barr company to handle payroll. The four charter schools are controlled by a single board; Sandra Barr and her mother hold two of the three seats.
Some of these management operations are large scale; the report finds that just seven corporations manage 555 charter schools across the country. But chartering for profit can work on a small scale as well; of the 138 for-profit management companies NPE studied, 73 ran only one or two schools. In other words, the EMO is created specifically to run one particular school, not as a stand-alone business venture...
No matter the scale, “sweeps” contracts are a common tool. The management company provides virtually all of the school’s services (building, maintenance, curriculum, payroll, etc) and may even contract not for a set fee, but, as one EMO contract states, it receives “as renumeration for its services an amount equal to the total revenue received” by the school “from all revenue sources.”
There are other ways to pull profits from these operations. Many charter schools are part of lucrative real estate deals. One audit in New York found that the Diocese of New York was renting a facility to NHA for $264,000 per year; National Heritage Academy (NHA) sublet that space to its charter school $2.76 million. Jon Hage, CEO of Charter Schools USA, also owns Red Apple Development, whose website displays 66 CSUSA schools that Red Apple developed and, in most cases, owns and leases.
Cyber-charters are particularly profitable, with one recent report suggesting that Californians are overpaying cyber charters by $600 million.
Please open the link and read about the vultures feeding on public school money.
Diane Ravitch's blog 
Many politicians know nothing about the EMO or CMO scam that allows non-profits make lots of unaccountable money. One reason that non-profits continue to expand is that non-profit charter schools are highly profitable under the EMO arrangement that enables the non-profits to hide the profit. The result is charters seek to expand their territory in order to collect more tax dollars from unwitting communities.
Pennsylvania is another state whose taxpayers are being fleeced by over paying for special education students and cyber students. Gov. Wolf recently released the findings of a bipartisan committee on charter school funding. The group called for lowering both the special education and cyber charter payments. The charter lobby, some of whom serve in the state legislature, oppose the changes, but there are some Republicans that are willing to support changes to the charter funding formula. https://www.timesonline.com/story/news/2021/02/26/wolf-proposes-sweeping-charter-school-reforms/6841536002/
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The amazing part is that ed reformers DESIGNED all these systems. They wrote them and pushed state legislatures to pass them.
This is the quality of their work on “governance” – they set up systems that all but guaranteed corruption and self-dealing. They built this monstrosity from the ground up.
The voucher schemes will be worse. At least with charters there’s SOME arms-length regulation, although it’s captured by people who are ideologically committed to privatization. The voucher schemes they’re pushing all over the country will direct huge tranches of public funding to just about any entity that calls itself a school or provides “educational services”.
We’re just getting started with the corruption. Now they’ve really unleashed the whirlwind with the voucher schemes, as we’ve seen in Florida. They will have no regulatory capacity or reach AT ALL for the private schools they’re now eagerly lobbying to fund. They’re hiring private boards with no transparency or accountability to pass out hundreds of millions in private funds to fund vouchers. The scandals will be epic.
Ohio had the largest state corruption scandal in the states history with a charter scandal, in terms of taxpayer money stolen. The Ohio voucher scandal will be bigger. Inevitable. Designed for corruption.
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Vouchers have unlimited potential to do harm to public schools. Public schools have no way to stop the bleeding of funds. The schools become the host to parasitic voucher schools of questionable quality. It is like turning the public school into an ATM, and many of the schools are not educationally sound.
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cx: many of the voucher schools are not educationally sound.
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yes, often education is not the first or even second or third interest
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Look at charter and voucher systems and the lack of regulation and oversight and know this- these are the systems the ed reform “movement” wants. They designed this governance scheme.
Deliberate. They’re designed not for “good government” but instead to comply with the ideological beliefs of ed reformers.
All those ed reformers you saw in the Bush and Obama and Trump Administrations, where only true believers were hired? These systems are what they came up with.
They’re ideologically anti-regulatory and so their systems include no safeguards or oversight.
Just as the massive charter scandal in Ohio broke, and every newspaper in the state started covering the theft of tens of millions in public funds, the charter cheerleaders in the Obama Administration sent tens of millions in federal funds to the same charter operators. They’re anti-regulatory. Ideologically.
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Here’s the voucher program the ed reform echo chamber are lobbying for all over the country:
“There is little public oversight for state funds. There is no financial audit requirement for the scholarship organization to ensure that they are appropriately using public funds, nor are participating students required to take, or submit, the statewide assessment that public and charter school students are required to take. There is no requirement that participating students take any assessment of any kind, in order to ensure that public dollars are going towards programs that provide the opportunity for an adequate education.”
Completely unregulated. Designed that way.
The scandals aren’t an accident. They’re inevitable. They exempt private schools from all of the mandates they impose on public schools, because they PREFER private schools over public schools. They’re manipulating the market – saddle public schools with thousands of junk ed reform mandates and require nothing at from the private companies they prefer.
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I think the refusal to regulate privatized school systems is mostly ideological but also part and parcel of ed reformer’s belief that charter operators are better PEOPLE than public school employees.
They POLICE public schools, treat them as if they must prove they don’t have bad intent, mete out punishments, etc. while depicting charter school employees (and lobbyists) as crusaders for children.
Charters need less regulation because charters are run by ed reformers, and everyone knows ed reformers are morally superior to the yucky labor union members who staff public schools.
The whole “movement” is infused with this insane bias towards the charter schools they prefer. I suspect it’s because it’s an echo chamber- all the big movers and shakers know one another and hire one another. It’s why you see the same 25 names over and over and over and why they all sound the same.
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Chiara, what you are describing is that legislators have bought the charter lobby’s propaganda that they are inherently better because they are private but get public dollars.
Some people are gullible and believe that private is always better than public.
I wonder how many Texans think that private is better after the collapse of the privatized power system during the snow storm.
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Recognizing that prevailing opinion decided the promotion of “ed reform” merits chastise while the politicking of the state Catholic Conferences and Catholic state legislators who “serve” in prominent policy roles (e.g. Sen. Matt Huffman of Ohio), doesn’t … a statistic from Ohio is of note. Enrollment in Catholic schools in Ohio approaches 10% of enrollment in traditional public schools.
Significantly, the focus of Catholic lobbying for school choice policy differs little if at all from the Koch network’s focus, IMO.
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In Ohio, Catholic schools enroll 34,000 more students than sponsored charter schools do.
The libertarian goal of no unions, student and employees without civil rights, little or no regulation of operation, families forced to assume greater financial responsibility for schooling, etc. can be achieved with any type of non-public school, whether it is a religious, a for-profit or a not- for-profit charter school.
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Do the charter schools which show a profit generally have very poor educational results?
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