There is Virtually No Difference Between Nonprofit and For-Profit Charter Schools

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Stop kidding yourself.


Charter schools are a bad deal.


It doesn’t matter if they’re for-profit or nonprofit.


It doesn’t matter if they’re cyber or brick-and-mortar institutions.


It doesn’t matter if they have a history of scandal or success.


Every single charter school in the United States of America is either a disaster or a disaster waiting to happen.


The details get complicated, but the idea is really quite simple.


It goes like this.


Imagine you left a blank check on the street.


Anyone could pick it up, write it out for whatever amount your bank account could support and rob you blind.


Chances are you’d never know who cashed it, you’d never get that money back and you might even be ruined.


That’s what a charter school is – a blank check.


It’s literally a privately operated school funded with public tax dollars.


Operators can take almost whatever amount they want, spend it with impunity and never have to submit to any real kind of transparency or accountability.


Compare that to a traditional public school – an institution invariably operated by duly elected members of the community with full transparency and accountability in an open forum where taxpayers have access to internal documents, can have their voices heard and even seek an administrative position.


THAT’S a responsible way to handle public money!


Not forking over our checkbook to virtual strangers!


Sure, they might not steal our every red cent. But an interloper who finds a blank check on the street might not cash it, either.


The particulars don’t really matter. This is a situation rife with the possibility of fraud. It is a situation where the deck is stacked against the public in every way and in favor of charter school operators.


But most people don’t want to take such a strong stance. They’d rather find good and bad people on both sides and pretend that’s the same thing as impartiality.


It isn’t.


Sometimes one side is just wrong.


Policymakers may try to feign that there are good and bad charter schools and that the problems I’m talking about only apply to the nefarious ones.


But that’s a delusion.


There is no good way to write a blank check and leave it on the street to the whims of passers-by.


Most apologists want to draw the distinction between for-profit and nonprofit charters.


But as Jeff Bryant, an editor at Education Opportunity Network, puts it, this is a “Distinction without a difference.”


These terms only define an organization’s tax status – not whether it is engaged in gathering large sums of money for investors.


The law is full of loopholes that allow almost any organization – not just charter schools – to claim nonprofit status while enriching those at the top.


We live in an age of philanthrocapitalism, where the wealthy disguise schemes to enrich themselves as benevolence, generosity and humanitarianism.


So-called “nonprofit” charter schools are just an especially egregious example. No matter what label you pin to their name, they all offer multiple means to skim public funding off the top without adding any value for students.


For instance, take the use of management companies.


A for-profit charter school can simply cut services to students and pocket the savings as profit.


A nonprofit charter school can do the same thing after engaging in one additional step.


All I have to do is start a “nonprofit” charter school and then hire a for-profit management company to run it. Then my management company can cut services and pocket the profits!


It’s really that simple! I turn over nearly all of my public tax dollars to the management company that then uses it to operate the school – and keeps whatever it doesn’t spend.



Heck! It doesn’t even matter who owns the company! It could even be me!


The law actually allows me to wear one hat saying I’m nonprofit and then put on a different hat and rake in the cash! The only difference is what hat I’m wearing at the time!


SO I get to claim to be a nonprofit while enjoying all the advantages of being for-profit.


SOURCE: Florida Sun Sentinel


I may even be able to buy things with public tax dollars through my for-profit management company and then if my “nonprofit” school goes belly up, I get to keep everything I bought! Or my management company does.


So the public takes all the risk and I reap all the reward. And I’m still graced with the label “nonprofit.”


Oh, and speaking of spending, being a “nonprofit” doesn’t stop me from the worst kind of real estate shenanigans routinely practiced by the for-profit charter schools.


Both types of privatized institution allow for huge windfalls in real estate. If I own property X, I can sell it to my charter school (or management company) and then pay myself with tax dollars. Who determines how much I pay for my own property? ME! That’s who!


And I can still be a nonprofit.


Think that’s bad? It’s just the tip of the iceberg.


Thanks to some Clinton-era tax breaks, an investor in a charter school can double the original investment in just seven years!

I can even get the public to pay for the same building twice! And even then taxpayers still won’t own it!


But that’s the complicated stuff. There’s an even easier way to get rich off the public with my “nonprofit” charter school, and operators do it all the time: write myself a fat check!


After all, I’ve gotta’ pay, myself, right? And who’s in charge of determining how much I’m worth? ME!


I can even pay myself way more than my counterparts at traditional public schools who oversee exponentially more staff and students.


For instance, as New York City Schools Chancellor, Richard Carranza is paid $345,000 to oversee 135,000 employees and 1.1 million students. Meanwhile, as CEO of Success Academy charter school chain, Eva Moskowitz handles a mere 9,000 students, for which she is paid $782,175.


And this is by no way a unique example.


There are just so many ways to cash in with a charter school even at a so-called “nonprofit” – especially if I want to dip my toe into legally dubious waters!


I could do like the almost exclusively “nonprofit” Gulen charter schools and exist solely as a means to raise money for an out-of-favor political movement in Turkey.


I could use charter funds to finance other businesses. I could decide to discontinue programs that students receive in traditional public schools such as providing free or reduced lunches but keep the cash. I could fake enrollment and have classes full of “ghost students” that the local, state and federal government will pay me to educate.


Fraud and mismanagement are rampant at charter schools because we don’t require them to be as accountable as their traditional public school counterparts.


If a traditional public school tried this chicanery, we’d almost certainly catch it at the monthly meetings or frequent audits. But charter schools don’t have to submit to any of that. They’re public money spent behind closed doors with little to no requirement to explain themselves – ever.


And all of this – nearly every bit of criticism I’ve leveled against the industry – doesn’t even begin to take into account the educational practices at these types of schools.


There is plenty of evidence that charters provide a comparable or worse education than children routinely receive at traditional public schools.


Where it is comparable, the issue is clouded by selective enrollment, inadequately servicing students with special needs and generally encouraging the hardest to teach to get an education elsewhere. Where it is worse, it is colossally worse, robbing children not just of funding but what is likely their only chance at an education.


But we don’t even need to go there.


We only need the issue of fiscal responsibility to bring down this behemoth.


Charter schools are no way to run a school. They are a blatant failure to meet our fiduciary responsibilities.


Traditional public schools are the best way to run a school. They protect the public’s investment of money and resources while providing a quality education to students.


So all this talk about nonprofit and for-profit charter schools is either a mark of supreme ignorance or a ploy for weak willed politicians to weasel their way out of taking a stand on an issue whose merits are obvious to anyone who knows what really happens in our education system.


It’s time to stop wasting taxpayer money on this expensive fraud.



It’s time for the charter school experiment to end.



And it’s way passed time to support fully public schools.


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55 thoughts on “There is Virtually No Difference Between Nonprofit and For-Profit Charter Schools

  1. Does it matter if the charter school is run by the local school board and all of the charter employees are employed by the local school board? That is the case in Virginia, Kansas, and for the vast majority of charter schools in Wisconsin.


    • It’s been a while, Teaching Economist, but we’ve been down this road together you and I. If you find me a charter school that is run by a duly-elected school board and MUST be run by them, a charter that not only is but MUST be as transparent and accountable, MUST do its business in public with public comment and open documents, that MUST follow all the rules of traditional public schools – then you have found a charter school in name only. At least, it should have to become a fully public school to relieve the redundancy. But no worries. That just means changing its name.

      Unlike you, I am extremely skeptical that there are states where the law creates something called a “charter school” where that definition is meaningless. If you see a hoop, there is a reason for it. Even with for-profit and nonprofit charter schools there is a reason for the distinction. The “Nonprofit” label allows a for-profit charter school to save face and hide what it truly is.

      In the cases you mention, someone is exploiting the difference – whatever that is – between traditional public schools and charter schools. We should either allow the innovations of these charter schools to public schools in general (thus eliminating the need for charters) or make it illegal for all schools (thus eliminating the need for charters). However, no innovations have come out of charter schools that I have ever seen. This is a failed experiment at best – highway robbery at worst.


  2. Steven I’m curious about your definition on innovation. Would you consider Teacher led schools, where the elected school board is made up of a majority of teachers innovative? Would you consider schools that are designed in the model of Ted Sizers Essential Schools and keep class sizes to a maximum of 15 students while the neighborhooding districts regularly have 35, despite the fact that the district schools receive more funding innovative? Would you consider schools that have students co-creating their own learning through all day project based learning innovative? Would you consider schools that provide students with 15-20 overnight learning experiences at no cost to students & families (without doing fundraisers) innovative? Would you consider schools that provide some of the most struggling and disenfranchised students with safe, caring and non-judgemental learning environments where they can progress at their own pace and receive the supports they have been lacking at their home schools innovative? I could go on. If you’re willing to actually spend some time and learn about the options that are available to students and families I can give you the contacts for dozens of schools that were created by dedicated, caring, committed educators who were not able to do the important, innovative work that they believe is best for students. If you’re willing I can share with you the stories of teachers, students, alumni and parents who will tell you how their charter school provided them with a path that wasn’t available to them in their district school. Finally if you are willing I will share with you my school’s annual required audit, and our annual report. Steven, I agree that there are several states that have very problematic charter laws, and quite frankly I wouldn’t shed a tear if they were closed, but to put all charters in the same bunch and claim that none of them are innovative or public either comes from a place of ignorance, or fear that the traditional district schools are not keeping up with the needs and wants of the 21st century learner?


    • Peter, first let’s deal with the issue of fiscal accountability, the central issue of the article on which you’re commenting. Even if these are great innovations, there is the question of whether the charter school model is fiscally sound. If I leave a blank check on the street, you might pick it up, cash it and use the money to buy me a pony. I may love the pony. The pony may change my whole life for the better. But that doesn’t mean I should go around leaving blank checks everywhere. Maybe it worked out this one time. It won’t in the great majority of cases. If I keep doing it, I’m going to lose my pony and a whole lot more.

      Second, charter schools are not emblematic of the kind of innovations you describe. They are much more likely to enact zero tolerance discipline policies, engage in “true grit” pedagogy and test prep on top of test prep. Taken as a whole, they are not centers of innovation if what we’re interested in is student well-being and not making bundles of cash for ourselves and our investors.

      Third, many of these innovations could easily be achieved at traditional public schools if they were equitably funded. In fact, you’ll find frequent innovation at the public school level – especially in schools where funding is not at an all time low.

      Fourth, given the lack of transparency and accountability at charter schools, the innovations of which you speak cannot be adequately evaluated. It’s like conducting an experiment outside of laboratory conditions or without peer review. Non-tested factors need to be controlled. You need to be able to prove that the experimenter doesn’t have his or her thumb on the scale. That can never happen at a charter school because they exist in the wild west of education.

      So in summary, I think we should examine charter schools so-called successes with an eye on proving they actually work and are reproducible at a school that is accountable and transparent – a fully public school. My suggestion to you would be to find ways to make charters like yours not only accountable but ESSENTIALLY accountable. Don’t just do the right thing because you’re a good person. Commit your schools to the legally binding path of fiscal responsibility. Meanwhile, where regulations serve no purpose, remove them for all schools. In other words, if there are good charters, make them fully public. If there are net benefits to some freedoms from regulation, extend them to public schools. That’s what’s best for all students, not a series of separate school systems some of which may actually provide a quality education.


  3. As a legal scholar I’m often taken aback by how effectively the ruling class has deceived the public on the issue of 501(c)(3) “non-profit” corporations. Aside from their ability to further the fringe-right’s agenda, and their main purpose to extract public wealth from the commons with no oversight or transparency, 501c3s are an instrument to buttress what Professor hooks calls the “white supremacist capitalist patriarchy.”

    Everyone on the left should read and discuss the definitive book by [INCITE! Women of Color Against Violence]( on the issue of non-profits. This passage is quite informative:

    > “So, essentially, foundations provide a cover for white supremacy. Reminiscent of Rockefeller’s strategy, people of color deserve individual relief but people of color organized to end white supremacy become a menace to society.” (7) — Andrea Smith


    • Fascinating book suggestion, Robert. I’ll have to check it out. The quote you cite may help explain the charter industry’s insistence that it is only looking out for the needs of children of color while civil rights organizations like the NAACP and Journey for Justice call for a halt to school privatization. There is something extremely paternalistic about the business community getting rich off the backs of black and brown children without even providing them a quality education in the process. Racism and capitalism have walked hand-in-hand since long before our country was founded. And they are still marching together today.

      Liked by 1 person

  4. Steven, using your initial analogy – if I get a blank check and I buy you a pony and that pony changes your life for the better then I have done my job as a teacher and an administrator. Even if it doesn’t work for every student every time, it’s like the story of the old man walking on the beach who throws the starfish back in the ocean and the young man says why are you doing that there are thousands of them on the beach, what difference does it make? The old man says it made a difference to that one and keeps walking down the beach throwing starfish back. As a teacher and administrator I can never save them all, but I damn sure can work hard to save the ones I have. I also find flaws in your general blank check and pony analogy. First of all I have never in 15 years seen a check that was anywhere near blank. Charter schools in my state receive the same per pupil funding as the district schools, minus any local levy dollars. We don’t have an October 1 count like other states, funds are adjusted throughout the school year. We are required to have elected school boards, open meetings, annual financial audits and yearly reviews by an independent authorizer. Furthermore, in my experience I am not providing a pony, but a healthy meal, a safe place to be, and a future, so yea many times those things do make considerable long term improvements.

    As a follow up I feel as though you and many of your contemporaries share the same habit of throwing out the baby with the bathwater. As I stated earlier, there are many flaws with charter schools throughout the country, I have been an outspoken critic of many of the models, and I have been involved in helping improve charter schools, (as well as traditional districts schools) through legislation, board work and statewide committees. I am not blind to the issues with charter schools, but neither am I blind to the problems with traditional district schools. We need to work towards improving all schools, while recognizing and replicating the things that schools, whether they be district schools, charter schools, private schools, on-line schools, or home schools do well. I find it interesting that you ask me to “examine charter schools so-called successes with an eye on proving they actually work”. How are we examining traditional district school success and proving that they actually work – standardized test scores, graduation rates, student engagement, student hope and happiness? If those are the measures of success we aren’t doing the best job with many segments of the population. There are many, many problems with education in America, but charter schools don’t scratch the surface of those problems.

    You also state that, “many of these innovations could easily be achieved at traditional public schools if they were equitably funded.” If that were true why don’t we see these kinds of innovation? Fifteen years ago I looked at the education landscape and said I am tired of seeing teachers not respected, teachers not being able to innovate, watching money go to sports fields and not students, seeing administrators come and go, and having precious student time taken away for test prep. What I found was that it wasn’t necessarily a funding issue, but an issue of funding allocation and general aversion to change. Not wanting to wade into that mess I figured I had two options, I could take the legislative track and fight an immovable system, or I could jump ship and help co-create a school that was more in balance with my beliefs in student learning and youth development.

    Thankfully I was blessed to be able to stand on the shoulders of giants like Ted Kolderie, Wayne Jennings, Ember Reichgott-Junge, Milo Cutter, Bill Wilson, Joe Nathan, Doug & Dee Thomas, and many others. I was able to join a group of passionate, dedicated, innovative educators and co-create a school that worked for a group of students that had been mostly forgotten by their district schools. Our philosophy was and always has been, we are not going to be able to change the entire education establishment, but we can make a difference in our own ecosystem.

    Steven, let me ask you, as an educator and an ethical leader yourself, – if you had the opportunity to co-create a high school that is based on a philosophy of a small learning community (no more than 200 students) with small class sizes (no more than 16 students), where you as a teacher were a member of the publicly elected school board, and your voice was actually listened to and valued would you take the chance? If you could be part of a professional organization where teachers are the leaders and tensions between teachers and administration doesn’t exist, because you all have equal standing, wouldn’t you welcome that challenge? If you could have a student advisory of sixteen 9-12 graders that you mentor from the time they start with you until the time they graduate. Where you could develop long term meaningful relationships with your students that are based as much on social/emotional needs as they are on academic needs, would you do it? If you could be considered an educational professional and co-design learning experiences that are based on student interests and passions instead of state curriculum and testing, wouldn’t you do it? Fifteen years ago I did just that and quite honestly I don’t spend a lot of time worrying about what others are doing, I worry about my students and I help make changes to the system by welcoming multiple teachers, administrators and students from all over the state, country and the world every year to discuss what we are doing and help them replicate the parts that they think will work best for their schools.


    • Peter, please understand that none of my criticism of charter schools is personal. I don’t know you. You seem to be an honest person who really cares about his students. I have met other charter school teachers who also seem to have a real desire to do well for their students. However, that doesn’t change the fact that the system of charter schools vs traditional public schools as a whole is an abject failure. Nationwide, it has failed to increase learning. It has done just the opposite.

      The industry you have aligned yourself with has misused the public trust and caused much more suffering than success. Meanwhile, it has drained traditional public schools of limited funding and resources.

      My point stands. Charter schools cannot work simply because of people like you. They have to work because the law forces them to be transparent and accountable. That may not be important to you in your role, but it is important to the public at large. It’s important to me as a taxpayer. It’s important to me as a teacher at a public school where I have to do more with less in part because of an unaccountable local charter school. It’s important to me as a father whose daughter goes to a traditional public school that has to do more with less because of a charter school parasite sucking away funding. It’s important to me as a citizen who has to deal with a more ignorant population because we do not meet our obligation to educate everyone due in part to school privatization chicanery.

      In short, if you buy me a pony with my blank check, I’ll be happy today, but tomorrow someone else will take the next blank check I offer and rob me blind. I won’t get to keep my pony. So your efforts will be wasted.


  5. Steven, thank you for the civil discussions. I think we can both agree that we are not going to see eye to eye on the charter school issue. I do, however, respect your writings. I read your book and I regularly follow your blog. I don’t always agree with your positions or analysis, but you are always thought provoking. I would like to leave you, for now, with a couple of thoughts.

    The first one is from a recent conversation I had with Bob Wedl, former Commissioner of Education in MN, with regard to the perceived issue of charter schools “stealing” funding from district schools. He reminded me that district schools don’t have kids, charter schools don’t have kids – parents have kids and they choose the best opportunities for their children.

    It seems like you are a well read, scholarly learner, so I would also like to recommend a book for you. If you have not already read Wayne Jennings’ School Transformation, I would strongly recommend it. If you are not familiar with Wayne, he is no flash in the pan reformer, Wayne has been supporting education in all forms for more than 60 years.

    Steven, have a wonderful school and I am sure we will be conversing more in the future.


    • Thanks for commenting, Peter. It’s nice to be able to speak to someone and not at them.

      When the government forces schools to compete for funding, there will always be winners and losers. That’s a terrible way to administer resources. And forcing parents to move their kids around like they’re in a game of musical chairs isn’t good for anyone, either. I think if we truly cared what was best for all students, we could find much more equitable solutions. We may not always agree what those solutions are – when does anyone ever agree with everyone else? But we must try to reform the system with the best interests of all children at heart.

      Thanks again for engaging and doing what you think is right.


  6. […] And Gov. Tom Wolf is refusing to let them continue to gorge on public funding meant to nourish everyone. Last week, he took executive action to hold these schools accountable and force them to be more transparent – even if the legislature won’t. Charter schools are publicly financed but privately run. Unlike authentic public schools, charters are often administered by appointed boards. They don’t have to provide the same level of services for children, don’t have to accept all students, can make a profit and don’t even have to be transparent about how they spend their money. […]


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