Bill Proposed To Clamp Down On Profit-Making Charter Schools
From Forbes.com
In almost every corner of the U.S., charter schools are non-profit. And yet, there are numerous ways to run a non-profit for profit.
In two reports (Chartered for Profit and Chartered for Profit II), the Network for Public Education showed numerous examples of the most common techniques. Some charters lease their buildings back from related businesses. In one New York case, a chartering organization leased a space from the diocese, then leased that space to its own charter school for over ten times the amount it was paying.
There are “sweeps” contracts, where a non-profit charter hires a for-profit management organization to handle everything, in return for nearly every dollar the charter takes in. As one EMO contract cited in the report states, it receives “as renumeration for its services an amount equal to the total revenue received” by the school “from all revenue sources.”
In many cases, a non-profit charter school simply serves as a pass through for money headed to a for-profit business.
Why be concerned? Because every dollar spent on students is a dollar that the company doesn’t get to keep. Every dollar that makes it into the classroom doesn’t make it into the company’s pocket. When profit-making businesses provide human services, there is a conflict of interest between the company and its customers.