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A 2010 protest against charter schools in Minneapolis, Minnesota. (Photo: Fibonacci Blue/flickr/cc)

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

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

Steven Singer

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 organizationnot just charter schoolsto 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.

funding schools

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.

Our work is licensed under Creative Commons (CC BY-NC-ND 3.0). Feel free to republish and share widely.
Steven Singer

Steven Singer

Steven Singer is a husband, father, teacher, blogger and education advocate. He often writes at his own blog,

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