Education Reform

Laura Chapman: Charters in Ohio Shaking the PPP Money Tree

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Our reader Laura Chapman lives in Ohio. She contacted NPE Execurive Director Carol Burris to find out which Ohio charter schools asked for and received money from the Paycheck Protection Program, even though they already received funding allotted to public schools; even though they lost no income, unlike the hundreds of thousands of small businesses that were closed by the pandemic and had NO income; even though public schools were not alllowed to apply for PPP funds. Under the CARES Act, the average public school received an average of $134,500. Charter schools for their share of that money, plus qualified to double dip into the PPP funds,, thanks to their skilled lobbyists.

Chapman writes:

Diane, You beat me to it. I found the headline this morning: “Charter’s PPP loan called into question. School gave shareholder company a $10M bonus.” That report from Craig Harris of the Arizona Republic (Dec 19, 2020) referred to Primavera, an online charter school based in Chandler. “The school received “a PPP loan of nearly $2.2 million, the largest forgivable loan among the 132 Arizona charter schools that obtained them. https://cdn.newseum.org/dfp/pdf19/AZ_AR.pdf

This scam is about to be repeated if more PPP money is allocated for so-called public charter schools now reinvented as small businesses.

I have been looking at the first round of Paycheck Protection Program (PPP) in Ohio, thanks to Carol Corbett Burris, Executive Director of the Network for Public Education who sent me an Excel database. I have been adding to that and doing some analyses that may be of interest.

Technically PPP loans are to protect jobs, but they are also functioning as if they can become grants without the need for repayment. Details on how that works can be found here https://home.treasury.gov/system/files/136/PPP-Forgiveness-Factsheet-508.pdf

Of the 79 Ohio charter schools that received PPP loans, eleven omitted the number of employees who received funds or reported zero jobs protected. According to a local business analysis, these errors were present in many applications that were nevertheless approved.

Among the many surprises in Ohio’s charter school loans, one was awarded to the Hillsdale/Barney Northwest Ohio Classical Academy receiving $174,000 PPP for 20 employees. That is an average government handout of $8725 per job. Hillsdale College is so anti-government and so free market oriented that the college does not accept any federal money. College students receive privately funded scholarships if needed. I was even more astonished to learn that The Barney Charter School Initiative of Hillsdale College operates over two dozen schools for nearly 12,000 students in 11 states.

Students in grades 6 -9 progress though Latin I, Latin II, and Latin III. In the high school they may study advanced Latin or another language. The Initiative provides an existing or start-up charter school with a curriculum, teacher trainings, and other branded supports. These are funded by the Barney Family Foundation with assets of about $29.5 million. The anti-government Hillsdale Trustees have no problem in seeking federal PPP for the Ohio Barney Charter school. The hypocrisy is not really surprising.

Of the 79 charter schools that received PPP money, eight charter schools received from $1 to $3.5 million to “protect” 787 employees. On average each employee in these schools should have received $17,227. However, that average can be misleading because administrators, teachers, and staff do not have the same pay… and hidden from view may be payouts as absurd as the one reported in Arizona.

In addition to the Hillsdale/Barney franchise, 24 other charter school franchises cashed in.

KIPP Columbus, Ohio operates five adjacent schools, some with collegiate-like facilities. This charter management organization (CMO) received $2,229,000 for 191 employees. KIPP receive one of the highest average PPP checks per job at $13,136. KIPP Columbus serves 1,194 students in grades Kindergarten-10. The latest test scores placed this operation in the bottom 50 percent of the state. KIPP knows how to find dollars and it is not embarrassed by its riches. According to a recent IRS statement, the KIPP Foundation had about $67.3 million in assets and the Foundation paid the dubious Relay Graduate School almost $600,000 for professional development.

Performance Academies LLC, located in Columbus, operates twelve K-8 schools in Ohio. These schools have a standard curriculum organized around an extended school day and the systematic use of McGraw Hill Reading and Saxon Math materials, both Common Core compliant. This franchise received $3,591,124 for 375 employees. It is not clear whether this sum was for the six Columbus schools or the entire Ohio franchise. In any case, the average PPP was $9,396 to protect a job.

I looked into four other charter school franchises, schools with the same brand name.

The Intergenerational School franchise has three schools in the Cleveland area. The average PPP for each job “saved” was $12,695. These schools have partnerships with community and state organizations for various programs and perks. Six of these arrangements are with Catholic institutions. The Intergenerational Schools are part of The Cleveland Public Schools “portfolio district.” Since 2015, The CPS portfolio district has been working to prove that it is compliant with the Bill and Melinda B. Gates Foundation’s District-Charter Collaboration Compact. These Gates-funded Compact agreements specify in detail how districts and charters should work together. City districts sign the Gates Compact in exchange for money from the B&MGF, distributed at several stages of documented compliance. CPS has found that this Compact has complicated the district’s legal compliance with the Ohio’s byzantine school rating scheme. https://www.igschools.org/wp-content/uploads/2020/12/CMSD-Portfolio-Report-Annual_Sponsorship_Report-2019-20.pdf

The Breakthrough Schools franchise operates twelve college prep schools in Ohio, but only three K-8 schools applied for and received PPP loans. These Cleveland area schools are part of the Cleveland Plan for the Cleveland Metropolitan (portfolio) School District. The Cleveland Plan is intended grow ”the number of excellent schools in Cleveland, regardless of provider, and giving these schools autonomy over staff and budgets in exchange for high accountability for performance.” Schools that participate in this plan outsource many programs to volunteers, to non-profits (e.g., arts education), and to for-profit contactors. This franchise is also supported by money from “Friends of Breakthrough Schools.” According to the latest IRS form 990 for this non-profit, the mission is “to perform fundraising and advocacy activities that exclusively support the operations and growth of the Breakthrough Charter Schools management organization and all its member schools.” The IRS form submitted in 2020 showed assets of $49.2 million, with the President raking in $180, 849 in compensation.

The PPP loans were sent to Ohio’s 18 Gulen charter schools. A dozen operate as Horizon Science Academies. Four others operate under the brand names of Nobel (2) and Zenith (2). Taken together these schools pulled in $7,800,037 dollars with $10,029 the average for each job protected. One Gulen school, with 28 jobs, received a mind-boggling $12,885 per job. Inexplicably, another Gulen school with 29 jobs was awarded $ 6,379 per job. This is to say that the whole PPP compensation process has no clear rationale for the “worth” of a person who is technically supposed to be on the payroll. For recent information on this national network of Turkish schools see https://dianeravitch.net/category/gulen-charter-schools/

Ohio is also home for the charter-loving Thomas B. Fordham Institute. It is the sponsor/authorizer for eleven schools. Six of these received PPP money. These schools took in $5, 251,155 to protect 422 jobs. The respective average “loan” per job, per school were: $14,459; $14,177; $13,162; $13,136; $11,015, and $9,857. I am still investigating how a new Heir Force Community School in Lima, Ohio with only 5 employees managed to get $210,125, with that a mind-boggling $42,025 per job.

Just as a reminder, in Ohio the charter industry has managed to mislabel its schools “community schools.” This is another rhetorical move calculated to be misleading, just like speaking of “public charter schools” when that is convenient and then magically becoming “small businesses” when that shakes the money tree.

Do you want to know how much PPP money the charters in your state collected? Write Carol Butris at [email protected]

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