Improving public education is a top priority of countless private funders. Yet despite years of work and billions of dollars spent, donors have struggled to have an impact on sub-par schools. Too often, grants to existing schools have made little difference in students’ lives.
Enter charter schools. A new kind of public school—independently operated, typically started from scratch by impassioned education entrepreneurs—charter schools strike many funders as an ideal way to invest in public education. Since they are created anew, with freedom from many laws and regulations that constrict school districts, charter schools have the potential to be dramatically more effective than the typical public school. Since they are schools of choice, they have to satisfy families or go out of business. Since they are held accountable for results, they can be closed if they don’t work. If they are successful, they can serve as models for other schools. And if they reach a critical mass, they can induce school districts to improve their conventional schools.
Donors have been indispensable to the past decade of charter growth. Since Minnesota’s groundbreaking 1991 law passed, 40 states and the District of Columbia have followed suit, often with bipartisan backing. The number of charter schools has grown from just one in 1992 to nearly 3,000 today. Charter schools now educate about three-quarters of a million students nationwide—about 1.5 percent of the school-age population—most of them disadvantaged. Parents clamor for more charter schools as they line up on long waiting lists for the chance to enroll their children.
But today, the charter movement is at a crossroads. Funders are still excited by the possibilities of chartering, as we learned while interviewing dozens of leading charter donors for The Philanthropy Roundtable’s new guidebook, Jump-starting the Charter School Movement: A Guide for Donors . But the funders we talked with also expressed concerns about the future:
- Though the number of schools continues to grow, donors fear the expansion has leveled off. In some major cities, the supply of qualified charter applicants has slowed to a trickle.
- The quality of charter schools is uneven. It’s not uncommon to find charter schools among the best and the worst of a city’s or state’s public schools. Many fund-ers wonder if philanthropists have done enough to insist on high quality in the schools they support.
- Charter schools continue to be underfunded. Almost all states deny charter schools the capital funding needed for buildings and facilities, which forces charters to spend an average of 12 percent (and often much more) of their operating funds on facilities. In many states, charter schools also receive less operating funds than conventional public schools.
- Access to charter schools varies greatly across the country. Ten states have no laws permitting charter schools, and the laws of many other states hinder the growth of high-quality, truly independent charter schools. According to the Center for Education Reform, which publishes a semi-annual report card on charter school laws, only 20 states earn an A or B for the quality of their charter laws.
- Political backlash against charter schools has grown along with the movement. Controversial from the outset because of the threat they pose to established interests, charter schools have come under increasing attack as opponents seek to limit the number of charter schools, restrict their autonomy and funding, and place them under the authority of school districts and collective bargaining agreements.
Because of these challenges, philanthropists are even more vital now for the charter movement than before. At this ten-year mark, we can look at outcomes to date, assess the factors that facilitated or hampered success, and take advantage of new opportunities to build on what we’ve learned. The No Child Left Behind Act provides an especially good opportunity to strengthen the charter school movement. With its provisions requiring school districts to expand public schooling options, particularly for students in low-performing schools, and to increase the accountability of traditional district schools, charter schools are in a good position both to grow in number and to lead the way in creating meaningful systems of accountability.
But for this to happen, a broader spectrum of policy makers, education entrepreneurs, businesses, philanthropic organizations, and private individuals must take some new and different steps to help the charter school movement live up to its potential. The charter school movement especially needs an influx of smaller funders. Smart investments, even if modest, can be leveraged to produce big results.
At New Haven’s Amistad Academy—where 96 percent of the students are black and Latino, and 87 percent qualify for the federal meals program—students’ reading regimen includes two reading classes plus 40 minutes of independent reading every day. On the 2002 Connecticut Mastery Test, one of the country’s toughest, 71 percent of Amistad eighth-graders achieved the highest level in reading, whereas only 22 percent of the school’s student had done so as sixth-graders.
Four Strategic Priorities for Charter Funders
Given both the promise of charter schools and the urgent need to prevent the charter school movement from being marginalized, The Philanthropy Roundtable commissioned Jump-starting the Charter School Movement in order to provide donors of all shapes and sizes with ways they can support a strong charter school movement in their communities and nationwide.
The book draws on the deep experience of many of the movement’s most active funders. It reflects their thinking about how donors can move the charter school movement to a new level of success in the next ten years. These funders have different ideas about the best ways to support chartering. As a result, the guidebook does not offer a simple recipe for all donors to follow. Instead, it provides a menu of possibilities to choose from and adapt.
The menu is built around a set of strategic priorities that we distilled from our conversations with donors. Dollars targeted at these four needs will have maximum effect:
Building a Robust Supply of High-quality New Schools . The first decade of charter schooling thrived on the ready supply of educational entrepreneurs who stepped forward to launch schools. This source of new schools has slowed, and the quality of schools it produced has been highly variable. Priming the pump of new supply is a key challenge for the second decade of chartering.
Addressing Critical Operational Challenges . Severe operational challenges have made it difficult for charter schools to start and thrive. Obtaining adequate back office services, financing facilities, and developing healthy boards of trustees are some of the most prominent trouble spots. Tackling these challenges would help more schools start and help existing schools focus on creating great learning programs.
Improving Charter School Quality Controls. Charter school authorizers are the organizations that grant charters and oversee charter schools. In theory, they exert quality control in chartering, screening out unqualified charter applicants and holding schools accountable for results. But too few authorizers are equipped to perform these roles well. And beyond authorizers, there is minimal information available to families and the public about how well charter schools are doing. More training for authorizers and more information for parents would give charters a big boost.
Forging Charter-friendly Public Policies. Laws and other public policies establish the conditions under which a state’s charter schools must operate. Yet in too many states, bad charter school policies are hindering the potential effectiveness and the scale of the charter movement. In other states, good policies are under attack by charter opponents. Charter advocates are rarely as well-organized or well-funded as those who challenge chartering. Many funders we interviewed insisted the policy arena will determine if the charter school movement plateaus as a minor player on the public education stage—or changes the whole story line of how children are educated.
The heart of Jump-starting the Charter School Movement discusses these four strategic priorities. For each one, we describe the challenge in more detail and explain ways that funders are addressing it or hope to. A concluding section pulls back for a broader view, offering general tips from these donors on how philanthropists can make the most of their charter-related giving and investing. At the back of the book are two appendices. One offers a set of guiding questions for funders who are considering supporting the charter school movement; the second provides sources of background information on charter schools, as well as contact information for funders and grantees highlighted in the guide.
Almost universally, the funders we spoke with emphasize the importance of drawing additional funders into the charter movement. No one can quantify precisely what it would cost to build the movement from its current size to its potential scale, but the price tag would surely reach into the hundreds of millions.
Current donors see this need at all levels of the movement, from national organizations needing support for scaled-up efforts to individual schools just starting out. Though the numbers are daunting, the donors we interviewed believe it can be done. They emphasize that even funders with limited resources can make a difference by focusing their funds on strategic priorities like the ones described above, or by pooling their resources with other funders.
Leveraging Smaller Instruments
Most foundations do not have tens or hundreds of millions of dollars to invest in any single issue. Having a more modest sum to direct, however, does not mean that a philanthropist cannot have an important impact on the quality of the charter school movement. Generally, there are two main strategies for using sub-million-dollar sums and still wielding influence. One is to combine grant money with that of other funders to create a larger pool of resources. A funder can do this independently, simply by talking with other potential donors and developing a fund, the uses of which are left to the investors’ joint discretion. Or a funder can contribute money to already-established funds, such as those managed by community foundations or those initiated by other funders for the express purpose of drawing multiple funders into the support of charter schools.
The second main strategy for using smaller funds wisely is to target local charter-related initiatives whose existence is significantly affected by your $50,000 investment. For all of the multi-million-dollar possibilities there are smaller-dollar counterparts at the local level. Here are just a few examples:
Building a Robust Supply of High-quality New Schools
• Provide funds to an existing brand-name organization that operates top-flight charters so they can open one or more charter schools in your community
• Provide start-up funds to one or more local charter founding groups with real potential for success
• Pay for a prospective leader of a local charter school to be trained in a national leadership development program
Addressing Critical Operational Challenges
• Join forces with other funders to create a loan guarantee pool for area charter schools seeking facilities <•> Develop a board leadership training program for the charter schools in your area
Improving Charter School Quality Controls
• Help a group of local charter schools purchase (and be trained to use) a software program that collects and analyzes data on their results
• Support a local study comparing the value-added of charter schools versus similar district schools in the community
Forging Charter-friendly Public Policies
• Fund a community organization hoping to provide accurate information about charter schools to its constituents
• Develop a report to be disseminated to local leaders outlining the benefits of charter schools
Veteran donors stress the importance of the present moment: Though funders are poised to guide and support the next phase of the charter movement, they will need the assistance of their peers. But when spent wisely, every dollar will count, and the lives of America’s schoolchildren will change for the better.
Homework Comes First
An important caution to all donors: The charter school landscape differs vastly from state to state. New funders, and especially those targeting a specific city or state, must take time up-front to learn about this landscape. A donor must investigate the state’s charter law—if the state has one. A good source of information is the Center for Education Reform’s website (edreform.com), which analyzes and ranks charter laws. The website uscharterschools.org contains links to many actual charter laws, and the site charterfriends.org/contacts.html includes state-by-state contact information for organizations that are knowledgeable about the terrain.
Small Grants, Big Results
The following foundations offer concrete examples of the ways modest grants can make a difference for charter schools.
The Achelis Foundation made a $50,000 grant to Civic Builders to help solve the real estate challenge confronting charter schools in New York City. Civic Builders is a nonprofit that helps community leaders identify, secure, and finance facilities for new charter schools. The organization helps the schools to lower construction costs, gain credit enhancement, obtain commercial debt at optimal rates, and avoid defaulting to landlords. By providing expertise in real estate development that charter school visionaries often lack, Civic Builders saves school found-ers much time, energy, and money. The Achelis Foun-dation has been involved in the charter school movement for a number of years, supporting new charter schools, professional associations, resource centers, policy research, parent groups, and an independent, outside evaluation of New York state charter schools.
The Kimsey Foundation gave $50,000 to New Leaders for New Schools to support that group’s efforts to recruit and train extremely talented people to become school principals in Washington, D.C. New Leaders provides rigorous training for its recruits; places them in a year-long, full-time residency with an exemplary principal; helps them find leadership positions in urban schools; and offers continuing professional development and support. Ten fellows were selected from a pool of 291 applicants for the D.C. program, and four of them are slated to head charter schools. The cost to sponsor a new leader is $40,000, although charter school placements typically require additional private funding. New Leaders has programs in Chicago, New York, and the Bay Area, but the D.C. program is the first to successfully negotiate more autonomy for its principals in exchange for high performance. The Kimsey Foundation, established in 1996 by James V. Kimsey, founding chairman of America Online, focuses on educational and cultural initiatives in Washington, D.C.
As Philanthropy has reported (“Great Local Grants,” Nov./Dec. 2003), the Challenge Foundation of Texas makes seed grants to school founders, generally in the range of $75,000 to $100,000, to help with heavy start-up costs. The key to the foundation’s strategy is (1) highly selective screening of applicants and (2) funding only in states that are charter-friendly. For example, in 2001 they gave seed money to launch Gaston College Preparatory in North Carolina. The majority of the school’s original students, nearly all low-income, scored below grade level. Two years later, the school is the state’s sixth highest performer.
Bryan Hassel is co-director of Public Impact. This article is adapted from Jump-starting the Charter School Movement: A Guide for Donors, recently published by The Philanthropy Roundtable.