A year ago,
the National Commission on Philanthropy and Civic Renewal urged Americans to "give
smarter" and to support the community-based, results-oriented organizations that have
the greatest impact on people and neighborhoods. In its report, Giving Better, Giving
Smarter, the commission concluded that philanthropy must cultivate a new kind of
giver—the "civic entrepreneur"—if it is to invest its money and time
in ways that make a palpable difference in the lives of those in need.
Civic entrepreneurs build vibrant community institutions. They are as exacting in
their giving and volunteering as they are in selecting their family doctor, buying a
house, or choosing a college for their children. Their philanthropy is strategic, more
like a long-term investment than a one-time gift. They tackle specific problems in their
own communities by clearing paths to self-reliance and opportunity. They are willing to
back bold new solutions, but they insist that civic enterprises remain accountable and
achieve results.
Civic entrepreneurs need not be super-rich. Millions of ordinary people give money
to community institutions or volunteer their time. Our task here is to suggest just a few
of the ways in which civic entrepreneurs can play a crucial role in fostering one of the
best examples of such community organizations: charter schools.
Help Wanted
A charter school is an independent public school freed from most bureaucratic
hassles in return for producing superior results. If it delivers those results—for
the same money as "regular" public schools, or less—and succeeds in
attracting students, it gets to keep its charter and remain open. If it fails, it risks
institutional death from the loss of either its charter or its students.
It’s a tantalizing idea, and a popular one, judging from the length of the
waiting lists at most of the nation’s 1,000-plus charter schools, the frequency with
which new schools appear, and the eagerness of many states to pass charter-school
legislation. In a sphere of American life too fond of faddish "innovation,"
charter schools represent a genuine alternative to the status quo. At their best, they
hold out the promise of many benefits: They give freer rein to creative, entrepreneurial,
motivated educators; they welcome and encourage more involvement by parents; they subject
competing teaching methods and curricula to the judgment of education consumers; they spur
conventional public schools to improve their performance; and they offer a diverse set of
students a safe learning environment led by educators committed to achievement.
Furthermore, as charter schools help us reinvent education, they help us
reinvigorate civil society in America. They are community-based learning centers shaped by
shared needs, priorities, and expectations. These expectations create moral norms and
values that permeate these new schools. Charter schools offer educators the opportunity to
create new professional communities, freed from centralized micromanagement and run
according to a set of shared educational precepts. Finally, charter schools eschew rigid
contracts with teachers’ unions in favor of employment arrangements that value
initiative, entrepreneurship, and results.
Our experience with charter schools suggests, however, that their success and
continued proliferation are hardly assured. They need a lot of help if they are to
flourish as genuine options for more than a handful of American children. There are a
thousand ways in which civic entrepreneurs can help charter schools. For the purposes of
this article, however, we are addressing our suggestions to a particular subset of civic
entrepreneurs: those individuals and organizations best able to nurture fledgling charter
schools with financial support and technical expertise.
Like any new venture, charter schools encounter their share of start-up problems:
bureaucratic red tape, a dearth of facilities, cash-flow gaps, personnel problems,
unpredictable demand, and skimpy materials. Even with good planning, the first year is
usually grueling, and the second year brings fresh challenges. Without the help that only
civic entrepreneurs can provide, some will surely falter, while others will take longer
than necessary to prove their worth.
We have identified four critical needs that civic entrepreneurs can help satisfy:
start-up capital and facilities, technical expertise, protection from hostile regulators,
and effective accountability systems.
1. Start-Up Capital
If charter schools are to be an option for a significant number of families,
it’s obvious that there must be many more of them. Yet the barriers to entry are
high. It’s risky, costly, and onerous to bring a charter school into being. No, it
shouldn’t be too easy to start a new school. But today it’s thoroughly daunting.
The higher the barriers to entry, the fewer the people intrepid enough to start a charter
school or enroll their children in one.
By far the most difficult barrier is access to capital: acquiring a building;
refurbishing, furnishing, and equipping it; obtaining books and other instructional
materials.
As public institutions, charter schools are entitled to public funding in
proportion to the number of students they enroll. State laws authorizing charter schools,
however, typically leave two financial hurdles for start-ups. First, despite the urgent
expense of equipping and staffing a facility, the initial public funds typically do not
flow until after the school year begins. Second, state laws provide for public funding
only of the schools’ operating expenses, not of their facilities or other capital
needs. The schools have no access to bonds or other forms of public borrowing. Private
vendors regard them as poor credit risks, since they have little collateral and their flow
of operating dollars is assured only for the term of their charter, which rarely lasts
more than five years and sometimes just two or three. "Without private help,"
says Mark Kushner, the principal of a San Francisco charter school for 180 ninth- and
10-graders, "we wouldn’t be here."
Civic entrepreneurs can help charter schools get started by assisting with the
acquisition of facilities, equipment, and materials. Here are suggestions on how to do
that, along with examples of what’s been done.
Provide direct support. Through outright grants or access
to borrowed capital on reasonable terms, civic entrepreneurs can help charter schools
obtain the wherewithal to begin. The Fenton Avenue Charter School, in Los Angeles, for
example, received grants totaling $164,000 from the Riordan Foundation to purchase new
high-tech equipment and computer software. This purchase became a magnet for financing
partnerships with Educational Management Group and General Telephone Electronics worth
nearly $1.2 million. These partnerships have supplemented Fenton’s educational
program with computer software, multimedia computers in every classroom, a fiber-optic
cable network, and a closed-circuit TV channel that is unique among California elementary
schools.
In Texas, the Financial Foundation for Charter Schools has secured more than $3.5
million from local businesses and banks to help charter schools with startup costs. More
than 25 schools have applied for these loans.
Support for facilities is less common but now growing. For example, the Ball
Foundation of Glen Ellyn, Illinois, has entered into an innovative agreement with a
real-estate developer, Continental Homes of Arizona, to build Ball-operated charter
schools in three Continental communities around the Sunshine State. The firm is selling
Ball the land at cost, and the foundation will pay for buildings. These schools will also
function as community centers, including adult education and after-school care. The
foundation has also provided a grant of $221,000 (mostly for facility renovations) to a
group in Chandler, Arizona, that wants to open a Ball Charter School. In Denver, several
foundations and business groups have raised more than $4 million to rehabilitate a
historic school building for a new charter school.
Create a financing authority. Like other public entities,
charter schools can benefit from using either public or private financing authorities to
build or renovate facilities. Such an outfit may secure bond-financing on favorable terms,
pool loans to several charter schools to reduce the risk to lenders, or furnish a
revolving loan fund of privately raised dollars. A group of D.C.-based philanthropists and
investors have launched a nonprofit venture called the Charter School Development
Corporation. Supported by private money, its mission is to provide both early working
capital and capital for school facilities and equipment. It wants to create a foundation
partnership for pooling funds to help guarantee construction bonds. Ultimately, it hopes
to develop a model for a nationwide program. Says program director Danny Rose, "Many
banks are hesitant about approving credit for charter schools, but the risk level of many
charter schools is better than a lot of small businesses."
The Prudential Foundation began a $10-million revolving fund so that New Jersey
charter schools can borrow money for start-up expenses as early as seven months before the
school opens. (The money may not be used for buildings and must be re-paid within a year
or two.) It offers an interest rate between 2.5 and 5 percent, depending upon the
school’s collateralization.
Public dollars can also sometimes be leveraged in this way. For example,
Chicago’s public-school system provided $2 million to the Illinois Facilities Fund to
create a revolving loan fund for charter-school facilities, equipment, and start-up
expenses. So far, six schools have received help this way, including three that would have
folded without it. A North Carolina program called Self Help channels both public and
private dollars to its Community Facilities Fund, which helps charter schools acquire and
renovate facilities, lease equipment, and meet other start-up needs. So far, it has
supplied loans and working capital to five charter schools two of which would have closed
without this help.
Donate or lease property. A former parochial school, an
unused warehouse, or part of a shopping mall can be turned into a terrific site for a
charter school. Carole Little and her business partner, Leonard Rabinowitz, donated a
$6.8-million former designer-clothing factory to the Accelerated Charter School, a
facility for low-income children in South Central Los Angeles. The site has five buildings
(totaling 200,000 square feet), some of which will be remodeled as school buildings. The
gift is a godsend to a school with 170 kids enrolled and another 900 on the waiting list.
Rabinowitz also serves on a panel that has promised to undertake a $50-million fundraising
effort over the next two years to aid the school and establish a teacher-training center
for the school district.
Civic entrepreneurs can raise capital for charter schools in other ways. They can
prod public authorities and community development agencies to unlock mothballed buildings
for use as charter schools; they can lobby individual philanthropists, local foundations,
companies, and nonprofit groups (especially youth service groups, universities, and
professional organizations) to support these schools; and they can help with fundraising
campaigns.
2. Technical Assistance
How do charter schools develop the leadership and expertise they need to flourish?
Even the best-intentioned founders often lack crucial know-how. They may, for example,
have terrific ideas about education but have no clue about the complex financial side of
charter operations. Or they may know a lot about business but next to nothing about
curriculum and testing. A successful charter school must master a bewildering array of
issues, including curriculum development, contract negotiation, liability protection,
educational theory, governance structure, personnel policy, facility management, academic
assessment, and budgeting, among others.
In the near term, schools need an instant source of the expertise they lack. Over
the long run, the charter movement urgently needs to augment its supply of people with
both the know-how and the desire to create and lead successful schools. Today’s
would-be charter leaders have no training centers, no clear "apprenticeship"
route, and no clearinghouse for expertise. Civic entrepreneurs can help those who are
already interested in creating charter schools—and boost the supply of such people
for tomorrow. They can, for example:
Supply training and technical assistance. Civic entrepreneurs can
underwrite centers for training and technical assistance that help charter schools
anticipate or solve the pitfalls of start-up and operation or that prepare individuals to
establish or work for charter schools. These centers can also assess a school’s
organizational strengths and weaknesses during on-site management reviews, research policy
issues, brief legislators, educate the news media, and raise money for individual schools.
Creating such technical assistance centers has been a common form of support for the
charter movement, though much more is still needed, especially in states and communities
that are new to the charter idea.
The Pioneer Institute’s Charter Schools Re-source Center assists schools in
Massachusetts. The center publishes a handbook on developing curriculum, managing
enrollment, assessing results, and handling a budget. The center also helps schools raise
funds from private sources to pay for facilities and other start-up costs; issues annual
research reports on the status of the state’s charter schools; and keeps state
legislators informed on how charter schools are working. The center’s work is
supported by individual donors, foundation grants, and an organization of Bay State
business leaders called CEOs for Fundamental Changes in Education.
The St. Paul and Minneapolis foundations have formed a partnership to launch a new
resource center, the Twin Cities Charter Schools Project, within the University of
Minnesota’s Center for School Change. The center provides technical assistance in the
form of workshops, consultants, and networking opportunities to nearly 20 charter-school
groups in the Twin Cities, particularly in financial and legal issues. The foundations
backing the center want to deploy the charter idea as a community development strategy in
low-income neighborhoods.
The charter-school movement
needs to augment its supply of people
with the know-how and the desire to
create and lead successful schools.
The Charter Schools Development Center, housed at California State University
in Sacramento, provides charter-school directors and boards with comprehensive guidance on
starting up and operating charter schools. It’s particularly known for its how-to
guides and its intensive and rigorous "boot camp" workshops for starting up,
managing, and financing charter schools. Supported mainly by private foundations, the
center estimates it has helped half of California’s charter schools so far.
The New Jersey Institute for School Innovation, a nonprofit coalition of corporate
CEOs and leading foundations, helped create the Charter School Resource Center of New
Jersey. The center has supplied all of New Jersey’s 39 charter schools with guidance
on funding and legal issues as well as opportunities to network with more experienced
charter-school leaders. It is now receiving support from more than a half dozen
foundations in New Jersey and New York.
The Charter Friends National Network, based in St, Paul, Minnesota, is researching
a "consumer’s guide" to promising models for facilities financing. Similar
projects are planned for "governance" issues that charter schools face, for
special education, and for accountability issues.
Leadership for Quality Education (LQE), a group of Chicago business leaders
seeking to advance the cause of local education reform, has established itself as a major
incubator of charter schools. It has been particularly helpful to prospective groups
trying to raise seed money and navigate the Windy City’s tough charter-approval
process. "LQE provided us with a great deal of help with grants and research,"
says Michele Smith, the director of a technology-oriented charter school in west Chicago,
at a critical point when "we did not have the knowledge or the time" to raise
funds alone.
The Morris and Gwendlyn Cafritz Foundation of Washington, D.C., provided the local
Apple Tree Institute for Education Innovation with $200,000 for operating support to start
charter schools in D.C. The funds supported a successful application to the federal
Department of Housing and Urban Development for a grant to convert unoccupied government
offices into two new charter schools.
Some foundations directly support charter schools or groups that want to create
such schools. For example, through the Fisher Family Foundation, Donald and Doris Fisher
of San Francisco (founders of the Gap clothing chain) will give $25 million to groups in
the Bay Area that wish to become Edison charter schools. The money will help pay for the
schools’ start-up costs. The Texas-based Challenge Foundation and the Arkansas-based
Walton Family Foundation both support individual charter schools, particularly in the
areas of curriculum and staff development.
Donate services. Business owners can loan employees from
their firms—or recruit others to do so, or pay for consultants—to help
individuals start charter schools or work with school operators to train the people they
need. For example, the San Diego Chamber of Commerce Business Round-table for Education
assembles a group of consultants three times a year to assist a consortium of 15 local
charter schools. It pays for—and enlists those who will donate—advisers on
financial, legal, and management issues, among others. The Colorado Lawyers Committee
recruits attorneys and law firms to provide help pro bono for charter applicants,
including writing proposals and assisting those whose charter requests are rejected and
then appealed to the state. (They are often successful.)
Support professional development. Civic entrepreneurs can provide
scholarships, fellowships, and other "mentoring" relationships to incubate the
future creators of charter schools. For example, they can fund site visits to successful
schools that can serve as role models for others. San Diego’s Business Roundtable for
Education subsidizes the expenses of school employees to attend an annual statewide
conference on professional skills. It also links principals and members of school budget
committees with mentors from the business world.
In addition, civic entrepreneurs can serve on the boards of existing charter
schools and on committees exploring the creation of new ones, and they can urge corporate
training centers to open up to charter-school personnel.
3. Safeguarding Freedom
Charter schools have myriad political foes who do their utmost to prevent enabling
legislation from being enacted in the first place. If they can’t stymie the movement
as a whole, they strive to keep charter schools few and weak. One favorite strategy is to
regulate them to death, or at least into conformity with conventional public schools.
Insofar as they succeed, charter schools lose their essential raison d’être.
The basic bargain is freedom for results. Yet the education system balks at giving these
schools real freedom, so the danger of re-regulation is omnipresent.
The danger arises from several sources: bureaucratic creep, interest groups that
prefer the status quo, and scandal and catastrophe. Anything that goes wrong in any
charter school in the land leads someone somewhere to say, "We must develop new
procedures and safeguards to ensure that such a thing never happens again."
Gradually, inexorably, the regulations and procedures accumulate.
Charter schools have myriad
political
Foes who strive to keep them weak
and few. One favorite strategy is
to regulate them to death.
Much of this is stuff for politicians and policymakers, but civic
entrepreneurs can help to fend off the re-regulation of charter schools in at least two
ways:
Organize watchdog and advocacy groups. These organizations
can counter assaults on charter autonomy by regulators and, conversely, can check
tendencies by charter schools to grow stodgy, complacent and self-interested. The North
Carolina Education Reform Foundation (NCERF), which receives financial support from
several sources, was initially created to promote greater parental choice in education.
Since passage of the North Carolina charter law, it has been the state’s most vocal
watchdog for charter schools.
When the state’s advisory board on charter schools tried to meet behind
closed doors, NCERF blew the whistle. It has also sponsored mock "legislative
hearings" on charter-school issues, run by challengers to political incumbents and
open to the public, to protest the senate’s inaction on charter-school laws.
NCERF’s director, Vernon Robinson, is also something of a one-man army watching out
for those charter enthusiasts who, in his words, become "wimpy or satisfied or lose
interest in building a movement after they get their charters."
Some of the charter-school technical assistance centers described above also
strive to keep state and local policymakers informed about the problems and triumphs of
charter school. For example, a key purpose of the Colorado League of Charter Schools is to
"educate" the legislature on charter schools—and to keep its own membership
from complacency. The Michigan Association of Public School Academies (charter schools are
called "academies" in Michigan) and the Goldwater Institute in Arizona see their
roles in a similar fashion.
Establish "friends groups." These groups serve both to support
true charter friends and counter false friends and outright foes. Several regional, local,
and national foundations—particularly the Walton Family Foundation and the Kinship
Foundation—are supporting the creation of these groups at the state and national
levels. These convene meetings and develop publications on topics of concern to charter
schools. One of the largest of these is the California Network of Education Charters. It
holds an annual state-wide conference, drawing attendees from California and around the
country.
If the movement can live up
to its commitment to be accountable
for student achievement, conventional
public schools will face
more pressure to follow.
Another example is Minnesota’s Charter Friends National Network, which is
negotiating with the state’s education department over how broadly charter schools
may define teacher licensing. The Minnesota Association of Charter Schools parleys with
state agencies to ensure that schools receive all the public funding to which they are
entitled. Development of such a "friends" group in Ohio is one of the projects
of the Thomas B. Fordham Foundation (with which both authors are associated).
4. Fostering Accountability
A charter school’s best defense against death by regulation is a bulletproof
accountability arrangement, but it needs help in getting there. If these schools are to
succeed, parents and policymakers need solid assurance that they are truly delivering
better results for less money. Just as important, if the charter-school movement as a
whole can live up to its commitment to be accountable for student achievement,
conventional public schools will experience even more pressure to follow.
Accountability remains an acute problem for charter schools across the land. As
best we can tell, only Massachusetts has in place a solid, statewide charter
accountability plan. Promising strategies are arising in Colorado and the District of
Columbia. But there’s a long way to go. The hallmarks of a good system of student
accountability for academic results include: (1) measurable standards for what students
are expected to learn; (2) regular tests that permit parents and policymakers to both
measure progress over time and compare each charter school to the rest of the district and
the state; and (3) rewards for mastering standards and consequences for failure. Besides
student performance, charter schools are legitimately held to account by their sponsors
for the other claims and promises made in their charter applications: tending the
youngsters in their care, handling public dollars responsibly, and obeying those laws and
regulations that have not been waived.
But how to know whether these things are in fact happening? Many essential
indicators remain to be developed. We’ve seen lots of pious promises in charter
applications and plenty of lofty claims by state charter programs. But we’ve seen few
viable instruments or systems so far. How can civic entrepreneurs help on the
accountability front?
Create accountability boards. These independent (state or local) boards
would weigh evidence about charter-school performance and problems and present sober,
balanced reports to the public. Those interested in creating such a group might look to
California and its bipartisan "Little Hoover" Commission as a model. In 1996,
the commission issued one of the first-ever statewide examinations of charter schools in
response to early assaults on California’s charter program by those it termed
"critics, some with vested interests in the existing system." Its generally
positive report helped to set the fledgling charter movement in California on solid
ground. Although the commission is an independent state oversight agency created to
promote efficiency, economy, and improved service in government, civic entrepreneurs could
generate private-sector counterparts to play similar watchdog roles.
Help fund individual school and state-level task forces. Such panels would
design genuine accountability systems that set measurable goals and standards for students
and educators and that can then be assessed to determine whether these goals have been
reached. Help is also needed for those charter schools that get into
accountability-related trouble—for example, problems related to finances, governance,
or staffing.
For example, a Boston group named Learning Contract has received foundation
support to develop an advanced information-management system that allows schools and
parents to track what students have been taught and which pupils have mastered which
academic skills. Eventually such information could be available via the Internet. So far,
16 schools around the country have signed on as pilot sites. The Gates Foundation is
helping the Colorado League of Charter Schools to develop an accountability plan for
Colorado schools that are using the Core Knowledge curriculum of E.D. Hirsch.
The D.C. Public Charter School Board has received a foundation grant to create a
cooperative for the 10 schools it has chartered. Called the D.C. Charter League for
Accountable Schools (DC CLAS), the group’s purpose is to help each of its schools
create an accountability plan for fulfilling its mission. This might include audits of the
school’s finances and management practices and measures of student performance and
attendance. CLAS offers consultants and conducts workshops on accountability issues.
Finally, several technical assistance centers have undertaken their own
evaluations of charter schools. The Pioneer Institute surveys Massachusetts schools
annually. The University of Minnesota’s Center for School Change produces ongoing
studies of charter schools. The most recent of these investigated how a sample of charter
schools measures student achievement, whether the schools are boosting achievement, and
what these schools are doing to meet their accountability requirements.
A Subversive Influence
Charter schools are a subversive influence with the potential for doing great harm
to the educational status quo and great good for children. Implicit in them is a
fundamental redefinition of what we mean by public education and a profound alternative to
the familiar bureaucratic monopoly. In the face of relentless attacks by forces that find
the prospect of charter-school success alarming, however, we must wonder whether the
charter-school movement will be allowed to get big and strong enough to demonstrate its
full potential.
Charter schools are a powerful engine for the renewal of civil society,
particularly those aspects that attend to the community’s neediest members. The
participation of individuals in the creation of charter schools is itself an exercise in
citizenship: people rolling up their sleeves, joining together, and working side-by-side
to improve one of the most fundamental institutions in any community: its schools. The
process of creating charter schools cannot but help to recharge our democratic batteries.
These schools are, in Peter Drucker’s formulation, "[N]ot the collectivism of
organized governmental action from above" but "the collectivism of voluntary
group action from below."
That is exactly the sort of project that civic entrepreneurs should be embracing:
clearing their path, solving their problems, assisting their creation, repelling their
foes, and propelling them to success.
Chester E. Finn Jr. is the
president of the Thomas B. Fordham Foundation and John M. Olin Fellow in the Washington,
D.C., office of the Hudson Institute. Bruno V. Manno is a senior fellow with the Hudson
Institute and a member of the Fordham board of directors. Both authors participated in the
National Commission on Philanthropy and Civic Renewal (supported by the Lynde and Harry
Bradley Foundation).
