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Peter Greene: There is No Meaningful Difference Between a For-Profit Charter and a Non-Profit Charter

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Throughout this presidential campaign, we have been treated (or subjected) to statements by both Democratic candidates Clinton and Sanders about charters: They don’t like “private charters” (Sanders) or “for-profit charters” (Clinton).

There are no “private charters.” All charters receive public funding. That’s what makes them so attractive to investors. That secure stream of government funding.

At the very least, we can be glad that Clinton is opposed to the for-profits, which rip off taxpayers and divert public funding to their stockholders and owners. Let’s hope that means she is prepared to cut off federal funding that goes to the scam artists of the charter world. No more 3-card Monte with public dollars.

But is there a difference between “for-profit charters” and “non-profit charters”?

Peter Greene says it is a distinction without a difference.

He writes:


In this scenario, I set up my non-profit school– and then I hire a profitable management company to run the school for me. The examples of this dodge are nearly endless, but let’s consider a classic. There’s the White hat management company that was being dragged into court way back in 2011. This particular type of arrangement was known as a “sweeps contract,’ in which the school turns over close to all of its public tax dollars and the company operates the school with that money– and keeps whatever they don’t spend. The White Hat story is particularly impressive, because the court decided that White Hat got to keep all of the materials and resources that it bought with the public tax dollars.

Or consider North Carolina businessman Baker Mitchell, who set up some non-profit charter schools and promptly had them buy and lease everything– from desks to computers to teacher training to the buildings and the land– from companies belonging to Baker Mitchell. From Marian Wang’s 2014 profile:

To Mitchell, his schools are simply an example of the triumph of the free market. “People here think it’s unholy if you make a profit” from schools, he said in July, while attending a country-club luncheon to celebrate the legacy of free-market sage Milton Friedman.

Real estate grabs

All charter schools– even the non-profits– can get into the real estate business as a tasty sideline for providing a school-like product. Charter producers can find money to fund a building and then– voila– they own a tasty piece of real estate. Remember– thanks to some Clinton-era tax breaks, an investor in a charter school can double the original investment in just seven years!

In fact, there are real estate companies in the charter school business. And this can be a particularly terrible deal for the taxpayers. Bruce Baker lays out here how the public can pay for the same building twice– and end up not owning it. Read the whole thing– it’s absolutely astonishing.

Write a big fat check

If you have the giant cojones for it, you can just write yourself a big fat check with all those public taxpayer dollars. To use one of everyone’s favorite data points– Carmen farina is paid $200,000 to oversee 135,000 employees and 1.1 million students. Eva Moskowitz’s Success Academy chain handles 9,000 students, for which Moskowitz is paid almost half a million dollars. And while Moskowitz gets plenty of attention, she is by no means unique….

And that’s just the profit issue

This is before we talk about every anti-democratic, school-destroying, segregation-spreading, education-failing, community-disrupting, and achievement-gap-increasing aspect of charter schools. As readers of this blog know, while charters can (and once were) a good thing, the modern charter movement has turned them into one of the most destructive forces in education today.

But we’re going to maintain focus

We’re going to stick to one point, and the point is this– to pretend that there is a substantive difference between profit and non-profit charter schools is either willfully ignorant or deliberately misleading. I’ve said it many times– a modern non-profit charter school is just a for-profit school with a good money-laundering plan.

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