Policymakers should revisit their initial thinking about charter schools so they can evaluate and improve their governance.
The United States has just 25 years of experience with charter schools. But in that short time, some 6,800 of these independently operated public schools have been created in 43 states and the District of Columbia. Those schools serve nearly 3 million students. Charters, in fact, account for the entire growth in U.S. K-12 enrollments since 2006.
They’re also as close to a disruptive innovation as American education has seen in decades, creating a new market and alternative delivery system that affords families access to options that are often quite different from those supplied by the traditional district structure. Along with the national movement to strengthen academic standards and accountability, chartering is the most substantial education reform of the modern era, one that at least 10 other countries have begun to pursue as well.
At the school level, charters have been spectacularly uneven in quality, with some schools succeeding wonderfully and others faltering, earning this sector a mixed reputation overall. However, opponents tend to slight every accomplishment, supporters often turn a blind eye to shortcomings, and battles over the very legitimacy of charter schools rage on — which is part of the reason, in our view, that they’ve only begun to fulfill their potential as an engine of change for American education.
Another part of the reason is that the charter sector has been beset by a host of unanticipated and unresolved problems related to the complexities of its approach to governance, which requires careful coordination among authorizers, boards, operators, and school leaders.
Let’s review the key players:
- Authorizer: Also known as a sponsor, this is the state-sanctioned entity that licenses a school to operate and is then responsible for monitoring its performance and renewing its charter if that performance is satisfactory. Authorizers’ failure to do this work effectively, combined with policymakers’ failure to create a well-functioning authorizing structure, is perhaps the biggest reason for weak school performance.
- Governing board: This is the school’s board of directors, responsible for it as a corporate entity, generally an IRS-approved nonprofit. The board adopts the budget, has fiduciary responsibility for its funds, and is accountable for academic results and legally responsible if anything goes awry. The board hires the school leader and staff directly or contracts with an outside operator.
- Operator: If the board hires an outside operator to run the schools, this organization is responsible for employing staff, selecting curriculum, managing resources, and dealing with students, teachers, and families, as well as vendors, community members, and others. (Keep in mind, though, that the majority of charter schools are not run by outside operators; 60% of the sector is comprised of free-standing, self-operating schools).
- Charter: This is the legally enforceable performance contract between authorizer and governing body that describes the school’s program and its expected results, as well as the practices it will use and the metrics by which it will be evaluated.
Typically, the governing board hires and oversees the principal, who is the school’s chief decision maker. In networks of charters, however — both the nonprofit charter management organizations (CMO) and the for-profit education management organizations (EMO) — school leadership tends to function somewhat differently. Whether the network includes a couple of schools or more than a hundred, near and far, its schools usually follow a standard education model, which individual school administrators have limited power to change. As is true of all charter schools, the governing board is formally accountable to the authorizer for the school’s performance. But when it comes to charter networks, the operating organization — not the local school leader — bears the greatest responsibility to produce those results.
Now let’s turn to the dilemmas that each of these players must confront.
Authorizers are a diverse lot. The U.S. contained 1,077 of them in 2014-15, ranging from 65 in Ohio and more than a hundred in Wisconsin to three in New York and just one apiece in Massachusetts, Arkansas, and the District of Columbia. In most cases, the authorizer is a local school district, but the power to authorize charter schools also has been granted to state agencies, universities, a mayor’s office, and even (in Minnesota and Ohio) nonprofit organizations that meet certain prerequisites. (The Thomas B. Fordham Foundation, with which all three authors have been associated, is one of Ohio’s 501(c)3 authorizers, currently responsible for 11 schools around the Buckeye State.)
The good and the bad
Some authorizers do exemplary work. More than 120 of them — including many of the largest, which together oversee more than half of all schools in this sector — adhere to the sound principles laid down by the National Association of Charter School Authorizers. (See list of principles on p. 69.) Yet most authorizers have not affiliated with NACSA, and some do a mediocre (or worse) job of overseeing the schools in their portfolios. Most egregiously, some have sought to maximize their revenues by taking on more and bigger schools, selling extra services to the schools they sponsor, and failing to curb mediocrity, lest pupil enrollments (and the funding attached to them) begin to decline.
Plenty of authorizers also lack judgment, courage, and expertise. This is true especially among authorizers that have responsibility for just one or two schools, as is typical when the authorizer is a local school district. Given that charter oversight is such a small part of their work, they are unlikely to employ specialized staff for this function, and they may have no idea what good practice looks like in this sector. Further, since districts are accustomed to running all of their schools directly, they tend to be particularly clumsy when it comes to handling the delicate balance between autonomy and accountability that charters require. They are often far too lax in responding to shoddy school performance, and they sometimes err in the opposite direction, too, attempting to micromanage the charter schools in their portfolio.
All of this illustrates the challenges associated with every kind of regulated marketplace. Competition alone may not yield adequate quality, student-centric priorities, and sound business practices, but an increase in governmental regulation may cause more problems than it solves. That’s precisely why top-notch authorizers are essential. They can and must strike a delicate balance, neither insisting on the uniformity of an old-fashioned, bureaucratic monopoly nor tilting toward a laissez-faire regime, in which anyone can do whatever they wish in regard to the education of children. Calibrating all this and fine-tuning it when necessary is the core duty of authorizers.
Who watches the watchers?
How and to whom is the authorizer itself accountable? Where local districts and state agencies play this role, they are, in theory, accountable to the voters. That’s not entirely persuasive, however, as such public bodies can be captured by stakeholder factions and buffeted by politics.
But the challenge only deepens when authorizers are independent entities (including universities and nonprofits) rather than government units. In such cases, the authorizer functions as an agent of the state, and the state must approve it to serve in this capacity. That does not mean, however, that the state will necessarily be diligent about monitoring each authorizer’s probity and effectiveness. Often, the state has limited capacity to do this and is itself battered by politics and pressures, including pressure from authorizers and their friends not to fuss too much.
Ohio provides a useful illustration of how these issues can play out. Until 2015, when Gov. John Kasich signed a bill that overhauled the state’s charter law, Ohio was notorious for allowing all manner of nonprofit groups (as well as districts and the Ohio Department of Education) to authorize schools. Just about anybody who wanted to start a school could find a sponsor, with the state having little ability to monitor the process or take action against the most promiscuous authorizers, which approved nearly every application they received. With more than 60 authorizers in operation, the Buckeye State gained a reputation as the Wild West of chartering. And over time, “charter school” (often called community schools, in Ohio) became a term of opprobrium, referring to a school that was poorly run and under-enrolled.
Among the worst offenders were a handful of giant, statewide virtual schools, the biggest of which were run by for-profit firms. These included a network of dropout recovery schools that consisted mostly of computer terminals and a group of elementary schools operated by White Hat Management, owned by David Brennan. A major political donor and power broker in Columbus, the state capital, Brennan has won well-deserved accolades for his role in bringing school choice to Ohio. But may of the schools run by White Hat (most of which were later acquired by Pansophic Learning) were inferior, some of them so poorly operated that their governance boards tried to “divorce” themselves from the management firm — moves that the company fought.
A central role but stuck in place
Good authorizing can make a material difference in school performance. For example, analysts associated with the National Bureau of Economic Research found that authorizers’ work in closing and opening schools played a significant role in improving the quality of Texas charter schools from 2001 to 2011 (Baude et al., 2014). Yet, authorizers are plagued by a shortage of workable solutions to sundry difficulties that their schools may encounter.
In theory, charter schooling entails a bargain, with the state offering two clear options: If a school succeeds, its charter will be renewed; if it fails, it will have to close. In practice, however, such binary options are too limiting. What if a school is simply mediocre, or inefficient, or effective with some students but not others, or strong in some grades and subjects but weak in others? Must it be shut down? What are the alternatives to turning its pupils onto the street? Is it the authorizer’s duty to try to rectify the situation, and does it have the expertise to do so? Should it provide some services itself? Does it have the nerve — and legal authority — to restart a charter by finding a different operator, principal, or governing board while retaining the students?
Today’s charter laws and regulations tend to constrain authorizers’ ability to come up with creative responses to questions like these. They can point their thumbs up or point them down, but those are the only options.
Often, the thumb points down. Thousands of charter schools have been closed, some 1,100 of them in just the past five years alone. Some have been closed because of low academic performance (and such closures are increasing with time, which suggests that authorizers are looking more closely at student performance), but most of those schools were closed not for academic reasons but due to financial miscalculations, faulty governance, flawed leadership, misbehavior by teachers and staff, lack of student demand, and pure bad luck (e.g., a key leader died or moved away). In situations like these, the authorizer may pull the plug, or auditors or law enforcement may do so, or the school may simply implode. But one way or another, shutting down the school appears to be the only choice.
But shouldn’t authorizers have more options than this? Today’s challenges began 25 years ago, long before advocates knew how intricate authorizers’ responsibilities would become. Over that period, much has been learned, and many guidelines have been codified, both in law and by groups like NACSA. But the authorizer’s key role in quality control remains unsettled in most states, and much still remains to be done by way of strengthening state policy frameworks and adding both to authorizers’ options and to their own oversight.
Many charters begin when a group of parents, teachers, or community leaders comes together to write an application that, if successful, enables them to form their own school (or convert a district school), select its leaders, and get underway. In those cases, the initial group usually morphs into the school’s governing board.
In other instances, a strong school founder recruits its board, which may end up more beholden to the leader’s desires than to student needs and the public interest. Board capacity and competence are challenges, too, as schools need all manner of know-how related to issues including finance, real estate, pedagogy, human resources, community relations, and stakeholder engagement. Traditionally, assembling and deploying such expertise has been a district responsibility (which isn’t always done well). Such an array of talent is far harder to muster within a five- or seven-member board for a stand-alone school that has a tiny leadership team and serves a few hundred kids.
California has 1,260 charter schools, which are governed by 560 boards. At an average of seven board members each, they need almost 4,000 individuals to serve on them. Multiply by five to get national estimates of how many board members are required. The daunting task and identifying and recruiting such quantities of people has led to the emergence of new organizations like Charter Board Partners, whose mission is to recruit and train individuals for governing boards in Washington, D.C. (whose 62 charter boards include more than 690 individuals), and BoardOnTrack, which operates nationally and already provides training to nearly 3,000 board members. This is also a further reason for the emergence and rapid growth of CMOs and EMOs — virtual districts in many ways — that can handle sundry duties and muster many kinds of expertise on behalf of the schools they run.
Many of America’s highest-performing and most respected charters participate in networks, meaning they’re operated by management organizations that are semi-separate from the schools themselves. There’s much to be said for this arrangement. For example, large networks can offer economies of scale, sophisticated back-office services, and multi-talented leadership teams.
Not every operator delivers consistent quality, however. That’s true of a number of nonprofit CMOs, but the most troublesome issues involve profit-seeking firms that contract with schools to oversee the whole operation. In some instances, such firms have spearheaded the entire school-creation process, forming their own nonprofit shells to hold the contracts, then stocking those governing bodies with handpicked teams of compliant individuals. This makes it highly unlikely that a school’s governing board will warn, penalize, or dismiss the operator, no matter how poorly the school performs. In such situations, the entire accountability burden rests with others, such as the authorizer or the state.
Private investments contribute much energy, inventiveness, and resources to public education, and they often provide remarkable examples of entrepreneurism in action. We’re all for them continuing. But we’ve also seen some large for-profit operators that operate dismal schools and that fight — in courtrooms, legislative corridors, and the media — all efforts by governing boards, authorizers, and public authorities to terminate the relationship.
In such cases, someone with authority must look after the best interests of the school’s pupils and the state’s taxpayers. Because we’re dealing with children’s futures, along with sizable amounts of taxpayer dollars, risk needs to be kept within bounds. Not just any group of people can be counted upon to run a viable public school. At the end of the day, scrupulous authorizers must monitor all school operators and rigorously vet the competence and track records, as well as the character, of those to whom they entrust a charter.
In a few tightly run networks, charter school principals function more like unit managers than educational leaders. But in most charters, principals have wide-ranging authority and weighty responsibility. They resemble independent-school heads more than typical public-school principals, as they have the power to make staffing, budget, and curriculum decisions and must also deal with boards, parents, community leaders, and local politics.
In most states, charter principals need not hold conventional administrator certificates. Leading — and often founding — charter schools has turned out to be a grand opportunity for visionary education reformers, inspired entrepreneurs, good-hearted community leaders, and, alas, some sorely inadequate (and sometimes greedily corrupt) individuals. This freedom to hire almost anyone to lead a school cuts both ways. It creates the opportunity for charters to recruit outstanding individuals who would likely never seek a standard school administrator credential. Yet that same freedom means that some people with no relevant experience of any kind have founded and led charters and then ended up pleading guilty to fraud and theft of public dollars.
Considering that no industry consisting of nearly 7,000 start-ups is going to have great leaders at the helm of every single unit, the charter sector has generally fared well on the leadership front. Burnout has been a problem in some of the self-operated, one-off schools, many of which are founded by highly motivated individuals who exhaust themselves trying to make their schools succeed. But some of the most highly respected charter networks (such as KIPP, Building Excellent Schools, and High Tech High) have focused their growth strategy on identifying and preparing top-notch principals. And here, too, diligent authorizers have a role to play, as one of their duties is to vet a proposed school’s leadership and governance arrangements with an eye toward the long-term.
Tangled governance: An ongoing challenge
Legally, the responsibility for finding a new leader is vested in the school’s governing board. And since most charter boards are self-perpetuating, their members usually are responsible for finding their own replacements, too. But this arrangement can foster in-group coziness and obliviousness to other constituencies, sound business practices, and potentially superior education strategies. Further, it creates a serious risk that board members might collude with an avaricious school operator or crooked school head, or that boards will be filled with friends and family members who don’t know enough about dubious school practices to recognize and put a stop to them.
But this only hints at the many other structural and governance quandaries that chartering has surfaced and which need to be resolved.
Consider this: Is a charter school best viewed as a district in its own right or as a component of a traditional district? What happens — and who pays — when it draws students from other districts or other states? And how should education leaders even define, much less govern, charter networks that function like virtual districts in their own right but which sprawl across municipal borders and sometimes state lines?
Nothing in America’s history of locally based, geographically bounded public schooling, with its layering of three or more levels of government (and funding and regulations from all of them), aligns well with the charter phenomenon. Of course, we would argue that the shortcomings of the traditional arrangement created a demand for chartering in the first place so we shouldn’t be so surprised that this new model of public school governance rubs up against the old one. But the policy theorists, political leaders, and advocates who gave birth to chartering failed to think such questions all the way through.
In hindsight, we also can see that this wasn’t just heedlessness. The founders of this sector believed charters were needed to improve public education and to serve needy children. But they also knew their efforts would alarm those with a stake in the traditional approach to school governance. Tactically speaking, they were prudent to avoid surfacing every thorny challenge in advance. Instead, they opted to let matters take their course and devise ad-hoc solutions to specific problems as they arose.
But this does not mean that improvisation remains the wisest strategy today or for the future. Rather, it is time to revisit some fundamental decisions about how charter schools and their networks are governed, both in order to tighten arrangements that are excessively loose and to encourage further innovation. We must ask, for example, why should state laws require every school to have its own governing board? What about creating more options (other than threatening closure) for authorizers faced with mediocre schools? Can we design a system that pays for charter authorizing without creating incentives for authorizers to go easy on lousy schools and that bar them from selling ancillary services to schools in their portfolios? Should we consider statewide financing for charters that draw pupils from multiple districts, or multistate authorizers to oversee sprawling CMOs and EMOs?
This list can easily be extended, but the main point is that the future of chartering should not be a linear extension of the past. If we left some problems unsolved in 1991 (or had no idea that they would become problems), that is no reason not to take stock of things as they stand today and to set matters right as we move forward.
Baude, P.L., Casey, M., Hanushek, E.A., & Rivkin, S.G. (2014). The evolution of charter school quality. National Bureau of Economic Research, Working Paper #20645. www.nber.org/papers/w20645
National Association of Charter School Authorizers (NACSA). (2016). Principles and standards. Chicago, IL: Author. www.qualitycharters.org/for-authorizers/principles-and-standards
This article is based on the authors’ book, Charter Schools at the Crossroads: Predicaments, Paradoxes, Possibilities (Harvard Education Press, 2016).
Originally published in March 2017 Phi Delta Kappan 98 (6), 63-69. © 2017 Phi Delta Kappa International. All rights reserved.