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For-profit education management organizations (EMOs) and nonprofit charter management organizations (CMOs) represent a small but growing portion (approximately 9 percent) of charter schools nationally. Many are finding that the work of management organizations is proving more difficult and more expensive than anticipated, in part because charter opponents have been able to impose high political and legal costs on them. However there are ways management organizations can begin to address these barriers and ensure the long-term viability of their management organizations.
Common Challenges*
Starting and running charter schools simultaneously in many different locations, each with its own politics and finances, is a herculean task. It has been shown that management organizations struggle with five obstacles:
Political Risk. The creation and development of independent public schools continues to be a task dominated by political risk. Political conditions change with a new mayor, city council, school board, some other elected state or municipal official, city manager, superintendent, local events, or newspaper stories. Over the course of a year local politics may shift several times. Such risks constitute a continuing tax on MOs, as they must work harder to get and keep their charters.
The Challenge of Business Plans. Because they are highly dependent on external funding from private investors or foundations looking to invest in ambitious projects, MOs are often tempted toward unrealistic promises of fast growth and low central costs in their business plans. The pressure to keep those promises adds to the urgency to open new schools quickly and, too often, to enter into agreements with unfavorable terms or into partnerships with groups that do not fully understand or embrace the MO’s core principles. Such “bad deals” can quickly result in uneven school quality, placing pressure on the MO to create bigger, more expensive central offices with tighter controls over school operations.
Start-Up Overload. The challenge of building an MO requires an entirely different skill set than those skills required to start one—or even three— schools. There is an immediate need to build management capacity and systems capable of supporting a very large organization. But new MOs often fail to recognize that need and seem caught by surprise.
Undisciplined Client Acquisition. Client selection often has an impact on an MO’s financial sustainability. However, ideal opportunities to start charters or work with new or established schools are not abundant. Thanks to growth-hostile regulatory and political environments, opportunities are scarce and almost always include unattractive features. This reality means that MOs often have to, or choose to, pursue opportunistic and scattered growth, including partnerships under varied authorizers, local contexts, and state laws.
Uneven Design Implementation. Interviewees reported difficulties in putting their instructional models into operation. Many said expectations for local partners to simply follow the MO’s model are unrealistic. School sites often “cherry pick” certain elements of the design, or start with a faithful replication but drop many elements over time. MOs also struggle to find leaders and staff who understand and can implement their designs well. These problems can quickly lead to uneven results.
Coping Strategies*
These difficulties are sobering, but may not be insurmountable. It is suggested that charter managers have developed coping strategies through additional investment, experience, trial, error, and determination. These strategies should not yet be considered “best practices,” as there is no way of confirming yet whether or not these strategies have lead to better results:
Anticipating Political Risk. MOs need to do on-the-ground work with local community groups as well as savvy politicking at the state level.
Settling on a Geographic Market. There are numerous and significant financial and political advantages for MOs that stay regionally focused, at least until they have a proven track record on quality.
Paying Close Attention to Client Acquisition. Strategic market research and effective screening of potential partners is crucial to MO success.
Clarifying What Is Meant by “Design Fidelity.” Establishing realistic expectations is important, but it is also necessary to define the essential features of a model as clearly as possible and make it easy for everyone to observe whether the model is being implemented.
Paying Attention to School Staff Pipeline. Strategies for improving the supply of principals and teachers include broad recruitment campaigns, clarity about desirable staff characteristics, investment in training, and “grow-your-own” methods.
Reinforcing Means of Quality Control. Through principal selection, performance measurement systems, and tighter legal and managerial controls, MOs can help ensure greater adherence to their design principles.
* Excerpts from US Charter Schools' report titled Quality Counts: The Growth of Charter School Management Organizations available in our resource section
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