The Business of Charter Schooling: Understanding the Policies that Charter Operators Use for Financial Benefit

This research brief details some of the prominent ways that individuals, companies, and organizations secure financial gain and generate profit by controlling and running charter schools. To illustrate how charter school policy functions to promote privatization and profiteering, the authors explore differences between charter schools and traditional public schools in relation to three areas: the legal frameworks governing their operation; the funding mechanisms that support them; and the arrangements each makes to finance facilities. They conclude with recommendations for policies that help ensure that charter schools pursue their publicly established goals and that protect the public interest.

Four major policy concerns are identified:

  1. A substantial share of public expenditure intended for the delivery of direct educational services to children is being extracted inadvertently or intentionally for personal or business financial gain, creating substantial inefficiencies;
  2. Public assets are being unnecessarily transferred to private hands, at public expense, risking the future provision of “public” education;
  3. Charter school operators are growing highly endogenous, self-serving private entities built on funds derived from lucrative management fees and rent extraction which further compromise the future provision of “public” education; and
  4. Current disclosure requirements make it unlikely that any related legal violations, ethical concerns, or merely bad policies and practices are not realized until clever investigative reporting, whistleblowers or litigation brings them to light. 
Research Brief