Spring 2013 – Magna Charter

Our schools won t thrive until the charter ethic replaces the urban school district itself, says this leading reform expert.

The traditional urban public school system is broken. It cannot be fixed. It must be replaced.

Unfortunately, however, most persons working to improve urban education, including many philanthropists, assume that the conventional school district is essential and immortal—that because of its age and standing, it must be the focus and driver of reform.

But the district is not part of the solution; it is the problem. The natural state of this institution that our predecessors placed at the heart of urban public schooling is persistent low performance. No city will ever realize a broad renaissance in K–12 education so long as the district continues to be its dominant, default delivery system for public education.
For great results, the conventional mass school district must be replaced by a new “system of schools,” governed by the revolutionary practices of chartering. By using four innovations introduced into public education by chartering—diversity of options, new starts, replications/expansions, and closures—we can create dynamic, responsive, high-performing, self-improving urban school systems.

In many ways, the new system will look and behave like other healthy industries. Quality, consumer choice, a wide array of alternatives, and innovation will play much larger roles than in today’s district-dominated arrangement. But the system will not be a freewheeling marketplace. There will be public management and public oversight, and the new structure will carefully preserve the key elements of public education, such as universal access, open enrollment, and non-discrimination.

Once operational, this new system of schools will not only deliver improved results, it will feel extraordinarily familiar. For years, other critically important government functions (not to mention most private transactions) have been carried out in the manner recommended here. As soon as a more flexible and naturally varied system of schools is in place, we’ll realize just how anomalous and deeply flawed our centrally controlled urban public-school system actually was.

If philanthropists take this argument seriously, they will be confronted with a number of uncomfortable questions: Were our past investments in the urban district a misallocation of scarce resources? Will continued investments in traditional districts serve to prop up broken institutions? How can my giving help bring about the all-new delivery system for urban K–12 schooling that is needed? While we’re making this transition, what about the students still assigned to failing district schools? A fuller understanding of the genesis of the urban district and the alternative on the table will bring some clarity to these challenges and light a path forward.

The School District as a Relic of the Factory Era

The misleading term “school system” hides the problem at the heart of U.S. urban public education. “System” normally refers to a collection of many independent moving parts working together to form an integrated whole. The traditional urban school “system” is no such thing.

The district is a monolith. For decades and decades in all of our major cities, the district was the sole owner and operator of all public schools. Every public school in the city belonged to it, and it controlled all aspects of those schools. This hulking monopoly became synonymous with public education.

Yet it’s simply not the case that a single delivery system has to define public schooling. The principles of public education can be carried out in any number of ways. Indeed, there’s nothing to say that the district had to be one of these ways. The district was born of the particular events, beliefs, and politics of a specific historical period.

The decades around the turn of the 20th century were marked by industrialization and mass immigration. America’s cities grew crowded, and poverty and other problems mounted. The existing public schools were too few to match the burgeoning demand, and they were ill-equipped to deal with the growing challenges of the time. Across the nation, ascendant Progressives sought to replace the messy machine politics of the day with cleaner, more professional “good government.” The Progressives also believed in elevating the city’s “best men,” leading figures in academia and industry, to positions of political power. These pillars of the community would rise above petty politics and ably advance the public good.

The combination of these principles led to the creation of the district. A school board, like a corporate board of directors, would be populated by respected city leaders and provide governance. The superintendency would be filled by a trusted executive who would lead operations like a CEO. The large, centralized bureaucracy would fully control the city’s public schools, providing continuity and stability, achieving economies of scale, rooting out nepotism, and delivering consistent offerings and results.

The district’s creation was anything but inevitable. Had immigration’s peak not coincided with Progressivism’s rise, had machine politics not temporarily given neighborhood control of schools a bad name, or had the public realized sooner the dangers of large, vertically aligned monopolies, the district may never have come into being. Moreover, while the rest of the world has evolved in staggering ways over the last 100 years, the urban district, amazingly, has gone virtually unchanged. It is aged and sclerotic, and has generated heartbreakingly poor results for generations. Put together, these points should compel donors to question the district’s long-protected status and wonder if something else is possible. Perhaps the district structure and the failings of urban public education are knit in a single fabric?

In fact, they are. And we’ll have strong hints as to the kind of system that ought to replace today’s disappointing institutions if we can understand exactly why current arrangements have led to continuous poor performance. The short answer? The district’s standing as a uniform corporation-like organization prevents urban public education from possessing the characteristics of a healthy industry or ecosystem.

The dynamic process of “creative destruction”—in which new firms emerge, existing ones compete, failing ones disappear, and successful ones grow—can be very rough on incumbent institutions. It guarantees, however, that the overall system will succeed and improve over time. Said simply, no single entity can compete with a strong system.

For urban education, the implications are tremendous. Basing the delivery mechanism of urban public schooling on a corporation was, in the end, a poor idea. The district’s ubiquity, continuity, stability, and uniformity may have seemed sensible in 1900. But these characteristics are lethal if high performance and continuous improvement are the goal. The district’s replacement must be a system that generates the dynamism of a thriving industry.

This means we must develop an entirely new approach to managing a city’s collection of schools. The approach must include strategies that address new schools, great schools, and failing schools. Most importantly, the new approach must challenge a core feature of the district mentality, held dear by many in the education establishment: that a single government entity must own and operate all of a city’s schools.

Many will argue that for public education to be truly public, all schools must be run by the government, and that it is rational to vest this authority in a single entity of government. For that matter, many philanthropists probably like the idea of there being one central office to channel projects and donations through. Superficially, that seems sensible for reasons of scale, accountability, and simplicity.

Such a structure, however, runs counter to both the best new thinking and the starkest daily experience with the delivery of important services. Today’s most effective and admired systems generally empower households to select among alternate providers. They allow community-based organizations to deliver locally appropriate, personalized services. This decentralization of power causes service deliverers to focus on mission, outcomes, and customer satisfaction. It turns citizens into customers able to exercise choice.

How do we transition from today’s monolith to a consumer-driven system like this? How do we help the sprawling, expansive “third sector” deliver customized public services? How do we empower families and communities? How do we ensure that the new system smartly addresses new schools, failing schools, and exceptional schools, bringing about the continuous improvement and healthy churn of dynamic industries?

Chartering in New Orleans: Big but Not Easy

In mid-March, New Schools for New Orleans announced large awards from the city’s new Charter Excellence Fund to help expand the reach of two high-performing school operators. The fund, a combination of mostly local investments and a large gift from the Laura and John Arnold Foundation, aims to create 15,000 high-quality school seats, and transform New Orleans into the first major American city “where every public school student is able to attend an excellent school.”

This and other developments in the schools of post-Katrina New Orleans show the potential for fundamental change in cities across the nation. Forward-thinking donors are teaming with entrepreneurial nonprofits to dramatically expand the number of high-quality charter-school slots available to disadvantaged boys and girls. It’s an audacious goal, and the failed city school district is, thankfully, nowhere to be seen.

After the devastating storms of 2005, Louisiana and New Orleans leaders decided to replace the city’s notoriously low-performing school district with a system of charter schools. Today, an amazing four out of every five public-school students in the city attend a charter. This was unmarked territory, and getting there required creative thinking, careful strategy, and a high degree of risk-tolerance—a trio of characteristics seldom used to describe government-led action.

Fortunately, the philanthropic community stepped up. Those at the heart of today’s extraordinary New Orleans experiment say it would never have materialized were it not for the leadership of private donors. One estimate is that philanthropists are pouring about $20 million into the city annually—about 5 percent of total spending. This has been sufficient to pull the city away from business as usual.

How those funds are being used is the real story. Rather than sending dollars through old channels, rebuilding familiar institutions, or subsidizing longstanding programs, donors have primarily invested in four sets of activities that are helping the city’s leaders start fresh and keep their eyes on the ultimate goal.

First, funding has gone to the development of new, autonomous charter schools rather than to dysfunctional existing schools controlled by a dysfunctional central office. The new approach includes support for new school organizations as well as existing groups seeking to replicate the high-performing schools they currently operate.

Second, philanthropists have significantly invested in human capital. This includes support for “pipeline” organizations, like Teach For America, which recruit and train educators, and “educator-effectiveness” organizations, like The New Teacher Project, which provide assistance in areas like educator preparation, evaluation, development, and compensation.

Third, to ensure that the forces of habit and legacy politics don’t pull the city back into old, unproductive ways, private funding has supported an array of advocacy organizations. Groups like Stand for Children and the Black Alliance for Educational Options make sure that the right policies are being created and sustained, and that the new system’s story is being told.

Finally, philanthropists have helped construct the pieces of infrastructure made necessary when the district apparatus was not restored. For example, given the choice-based nature of the new system, the city found it necessary to build a new type of enrollment system, provide far more information to families, and so on.

The list of investors deserving credit includes well-known national names like the Eli and Edythe Broad Foundation, the Bill & Melinda Gates Foundation, the W. K. Kellogg Foundation, the Carnegie Corporation, the Walton Family Foundation, the Fisher Fund, the Robertson Foundation, and the Louis Calder Foundation. It also features numerous local contributions from groups such as the Booth-Bricker Fund, the RosaMary Foundation, the Patrick F. Taylor Foundation, Baptist Community Ministries, Entergy, Capital One, and Chase.

The results to date have been exciting. Information is flowing to parents, talent is streaming into the city, low-performing schools are closing, and great schools are growing. In the last few years, New Orleans has registered big gains in state tests, graduation rates, and the ACT.

No organization has done more to lead and manage these efforts than New Schools for New Orleans. It is a prototype for the kind of “ecosystem” organization essential in the urban school system of the future. Its remarkable leader, Neerav Kingsland, succinctly summarized the city’s progress and trajectory, and the indispensable role of private funders to the work.

“The New Orleans transformation could not have occurred without the coordinated, strategic investment of philanthropists,” she explained. “The fruits of this giving include dozens of high-quality schools opened, thousands of educators recruited and developed, and public-education governance re-invented. Since the storms, private funding has helped us move from ‘F’ to ‘C.’ In the years ahead, it will be vital as we progress from ‘C’ to ‘A.’”

A System of Schools, Not One School System

The answer to all of these questions—and the blueprint for philanthropists’ role in building the urban school system of the future—can be found in charter schooling.
The systemic innovation of chartering has already shown that the government need not be the exclusive operator of all public schools. A wide array of organizations can deliver a public education, creating a public-schools marketplace.

Chartering has also already demonstrated that there can be variety and churn within public education: Diverse new schools can be continually created, failing schools can be closed, and great schools can be replicated and expanded. What remains to be seen is whether these revolutionary characteristics can form the core of a comprehensive, coherent new system.

They can, and philanthropists can play a leading role. The key is shifting urban governments primarily into the business of managing portfolios of schools operated by others. But this requires philanthropists to take a daring intellectual leap.

Today, most subscribe to an enervated view of chartering. It is seen as a way to create a handful of autonomous public schools. If it is credited with having created a new sector within public education, that sector is thought to be an auxiliary. If chartering is recognized as having any systemic influence, it is as an R&D arm, a means of developing and testing new ideas that will then be shared with the real system—the district.

Many donors currently accept, at least tacitly, this view. Their primary grantees are districts or nonprofits that spend the vast majority of their resources on districts. This is not to say that chartering is ignored, only that it is treated as subsidiary.

Instead, we must see chartering not as a sector and not even as a system but as the system for urban education’s future. A consequence is the permanent demotion and the potential for the cessation of the district.

Importantly, bringing about this type of system is no longer a fanciful intellectual conceit, and philanthropists deserve a great deal of credit for turning a concept into reality. Thanks to the policy innovation of chartering—supported by countless donors across the nation for two decades—districts can no longer claim to have a proprietary right to public education. Today, in most cities, a diverse assortment of nonprofits, supported by an array of local, regional, and national foundations, operate public schools.

Moreover, chartering has shown that the key practices advocated for here can work in public education. A diversity of new schools can be started from scratch. Low-performing schools can be closed. Great schools can be replicated.

Thanks to visionary giving strategies by many philanthropists, organizations like the National Alliance for Public Charter Schools, the National Association for Charter School Authorizers, NewSchools Venture Fund, the Charter School Growth Fund, and a wide array of charter-management organizations, human-capital providers, and support organizations, these revolutionary systemic innovations have been brought to life and continue to be improved.


Student at a YES Prep charter school in Houston

As a result, we are witnessing what was once thought impossible: the replacement of the failed urban district. In New Orleans, nearly 80 percent of students attend charters. In Detroit and Washington, D.C., the charter market share is approaching 50 percent. In Kansas City, St. Louis, Cleveland, Dayton, and Indianapolis, it’s at 25 percent or higher.
Best of all, when the principles of chartering are followed faithfully and implemented with care, the student achievement results are extraordinary. A large and growing body of research shows that cities that have embraced smart chartering, like New Orleans, New York City, Newark, and Indianapolis, have remarkably high-performing charter sectors.

The Vital Role of Philanthropists

It is hard to overstate how valuable a role philanthropists could play in bringing about the urban school system of the future. Those who are serious about fixing the failures we’ve long endured should establish a fundamentally different strategy. The new approach should be to end the century-old monopoly of the centralized urban district.

In the short run this will involve supporting the expansion of chartering. Helping great charter schools expand is the surest way to increase the number of high-quality seats available to needy kids. Funds can be provided to single-site schools, organizations that manage multiple schools, or intermediary organizations like the NewSchools Venture Fund and the Charter School Growth Fund. Philanthropists can also help incubate and launch new schools, for example by underwriting organizations that train future charter leaders, help with facilities, assist with business systems, or incubate new school models, including those using innovative approaches to technology.

Support for charter authorizers is also a high-leverage giving strategy. These organizations can weed out applicants lacking the capacity to start great schools, identify schools for expansion, and close persistent low performers. They are often under-resourced, though, and unable to adequately collect and analyze data, visit schools, and monitor financial and operational behavior.

Another short-term strategy is advocacy. Our old existing system is supported by longstanding policies, practices, and advocates for the status quo. Cities need reform-oriented advocacy organizations to bring about changes in charter laws, funding formulas, and enrollment policies, and to publicly support new strategies like the closure of failing schools and the expansion of programs like Teach For America.

At the same time these practices are building steam, some longer-term, mindset changes are required. To put it bluntly, philanthropists may need to pick sides—and commit to building a new system and bringing the old system to an end. To date, many philanthropists have chosen and instead of or. They have supported some activity in the charter sector while also trying to improve the urban district. Attempts at the latter, however, have proven amazingly ineffective. This not only diverts scarce resources, it also props up a system that we ought to wind down.

Dozens of micro-decisions can support this new macro-approach. If a great principal and team of teachers want to start a new school, a donor could choose to support this effort only if it takes place in the charter sector. If a new program intends to recruit and train high-quality school leaders, a donor might stipulate that those leaders be directed to new charter schools, not to failing district schools hoping to “turn around” (something for which there is hardly any successful precedent). Related strategies could include wresting under-utilized facilities from a district, and declining to contribute to efforts to pay for “reform” provisions in a new union contract with a conventional school district.

Though “picking sides” might, at first blush, seem brash, it is the logical conclusion of a 20-year reform effort, and commensurate with the enormity of the challenge we face. Half a century of work hasn’t come close to adequately improving the urban district. It is now clear that tinkering is not the answer.

Philanthropy was essential to the genesis and development of chartering. In the process it created a policy mechanism that was at first considered just a boutique tool for erecting a handful of educational alternatives. But the innovations at the heart of chartering actually create the spine of the optimal replacement for today’s failed centralized districts. Most of all, chartering has shown us the value of breaking monolithic governance into a more organic network of multiple alternatives. Now is the time for donors to invest strategically and bring about a full flourishing of the principles of chartering to create the urban school system of the future.

Andy Smarick is a partner at Bellwether Education Partners. He served as Deputy Commissioner of Education under Gov. Chris Christie in New Jersey, and is author of The Urban School System of the Future, from which this article is adapted.

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