For-Profit Charters Under Unfair Attack, Defenders Say

Published February 11, 2015

Bob Fayfich estimates fewer than 2 percent of the 176 charter schools in Pennsylvania have for-profit companies hired to run the nonprofit charter schools.

The executive director of the Pennsylvania Coalition of Public Charter Schools says that puts the lie to common criticism of charter schools as allowing “for-profit” companies to enter the business of public education.

A Harrisburg newspaper ran a Feb. 2 headline reading, “Big for-profit schools, big donations: the influence of charter schools on Pennsylvania politics.”

“Public education is a multibillion [dollar] business in this nation,” Fayfich said. “A lot of people are making a lot of money off the taxpayer dollars that go in education. Public education is a business whether they want to recognize that or not.”

The National Alliance for Public Charter Schools reports there are 6,000 charter schools in the United States. About 67 percent of charter schools are nonprofit, single-site schools. Nonprofit organizations running more than one school account for 20 percent, and for-profit companies run 13 percent.

Profiting from Taxpayer Money

Superintendent Michael Rice of Kalamazoo Public Schools in Michigan, Michigan Association of School Administrators Executive Director William Mayes, and Michigan Education Association President Steve Cook have all talked about charter school profiteers taking taxpayer dollars via charter schools.

All three have benefited financially from taxpayer dollars in traditional public schools.

Rice had a total compensation of $269,553 in 2013 for running a public school district. Mayes’ MASA makes its money by collecting membership fees from school districts and putting on conferences attended by public school employees. Mayes had a total compensation of $214,112 in 2013.Cook runs the largest teachers union in Michigan. The MEA makes much of its money off dues collected from public school teachers. Cook made $235,626 in total compensation in 2013.

Cook’s MEA union set up a nonprofit organization decades ago, the Michigan Education Special Services Association (MESSA), which offers health insurance to traditional public school districts. MESSA is now a $1 billion operation and pays Executive Director Cynthia Williams $285,729 in total compensation.

“There are millions of dollars in profit in Michigan for public schools,” said Gary Naeyaert, executive director of the Great Lakes Education Project, an organization set up to support choice in public education.

‘Anti-Choice, Anti-Parents’ Critics

Naeyaert objects to those who criticize the relatively few for-profit charter schools while giving a free pass MESSA and its billion-dollar-a-year operation running health insurance programs for public school employees.

“No one is pointing their venom at MESSA,” Naeyaert said. “It’s just another example of anti-choice, anti-parents policy to defend the status quo.”

For-profit charter criticisms are taking place at the national level, as well.

In June of 2014, Thomas Gentzel, the newly appointed executive director of the National School Boards Association (NSBA), wrote in a newsletter about concerns of “a deep-pocked school privatization movement that aims to greatly accelerate the proliferation of for-profit charter schools and voucher programs.”

As of 2013, Michael Resnick, associate executive director of the NSBA, made $583,801 in total compensation. Two other executives of NSBA had total compensation of $440,000 and higher. The NSBA made $16.1 million in 2013 in program service revenue, from conferences attended by public school employees.

National union leaders are also doing well financially.

Dennis Van Roekel, president of the National Education Association (NEA), received total compensation of $541,632 in 2014. John Stocks, executive director of the NEA, made $412,398 in total compensation in 2014.

More Quality Schools Needed

Todd Ziebarth, senior vice president for state advocacy and support for the National Alliance for Public Charter Schools, said the debate should be about whether the schools are of quality, not whether they are for-profit.

“We think it should be about the quality of options provided,” Ziebarth said. “We need more quality schools, not fewer. It is a bit curious that folks get hung up on charter school management companies that manage for profit. I don’t understand how that is fundamentally different than a food-management company that is providing services to public education for profit.

“Charter school opponents have a problem with one and not the other,” he said. “It’s more of a political point they want to use to try to stop charter schools.”

Tom Gantert ([email protected]) is senior capitol correspondent for Michigan Capitol Confidential, a daily news site of the Mackinac Center for Public Policy.

Image by Tracy O.