Education Management Organizations and the Privatizing of Public Charter Schools

• In Event: The Walmartization of Charter Schools: A Road to Failure or the Salvation of Public Education

Abstract

One key objective of the presentation is to share an overview of the growth and diversification of nonprofit and for-profit education management organizations (EMOs). A second objective is to highlight key areas in which the public nature of charter schools is being undermined or blurred by private EMOs.

Education management organizations, or EMOs, emerged in the early 1990s in the context of widespread interest in so-called market-based school reform proposals. Proponents of EMOs claim that they will bring a much needed dose of entrepreneurial spirit and a competitive ethos to public education. Opponents worry that outsourcing to EMOs will result in already limited school resources being redirected for service fees and/or profits for another layer of administration. Opponents also have expressed concerns about public bodies relinquishing control or ownership of schools.

The theory behind market-based school reform proposals is that, by being forced to compete with other schools, existing public schools will necessarily improve or cease operating. While faith in market competition as an effective engine of reform provides a general theoretical basis for both EMO-run district and charter public schools, the specifics of the competition are somewhat different in each instance. Adherents of market-based school reform favor charter schools in the belief that they provide competition that will force existing public schools to improve their outcomes or be put out of operation. Support for private management of district schools, meanwhile, arises essentially from a belief that private business models are more efficient and effective than nonprofit, government-operated institutions. A for-profit company contracted to manage district public schools, it is reasoned, will have incentives (making a profit in the short term and retaining a profitable contract in the long term) to seek efficiencies and improve student outcomes and achievement. The competition, in this context, takes place not among schools or districts themselves, but among current or potential managers of schools.

Until recently, most attention has been focused on the for-profit EMOs. In recent years, however, more interests and private funds have been devoted to nonprofit organizations that manage charter schools. While concerns about profit motives are not as apparent with nonprofit organizations, there are still concerns about how public governance of these schools is being affected by private, nonprofit EMOs.

Currently, 98 for-profit EMOs operate 729 public schools, and 137 nonprofit EMOs operate 813 public schools. Together, these privately operated schools enroll more than 590,000 students.

Author

• Gary J. Miron, Western Michigan University