Profiting from Education

Published October 1, 1998

Many public school teachers and administrators are disdainful of the notion that private companies should be permitted to profit by providing educational services to children. Education and profit are incompatible, they argue, because the bottom line in public schools is the children, while the bottom line for a private company is profit.

At the recent Edventures ’98 Conference in Evanston, Illinois, John C. Ronine of JCR Associates, a Beacon Management affiliate in Michigan, tackled the issue as a series of questions.

Is it appropriate to profit from public funds?

No one regards it as improper for private companies to make a profit from the tax dollars they receive for building and repairing roads (“Your Tax Dollars at Work”). Many for-profit firms are funded by tax dollars to provide such services as garbage collection, tree trimming, and sewer construction. Why not teaching?

Is it appropriate to profit by serving children?

Children are already served by for-profit firms, including textbook publishers and suppliers of desks, pencils, and chalk. Why is this an issue with teaching?

What does the potential for profit bring?

“The potential for profit brings competition and we see that in every segment of society,” said Ronine. “But, for some reason, education has not been part of that equation.”

What are the benefits of competition?

Competition brings higher quality and lower cost. For example, Chrysler CEO Robert A. Lutz said that Chrysler’s high-quality product today was brought about by competition from Toyota twenty years ago. Competition motivates people to perform better, as in sports and in music. Why not in education?

Does a management company increase costs?

The management company takes the place of the central office and functions as purchaser, superintendent, secretary, and financial controller, reducing costs rather than increasing them.

Are children short-changed by charter schools operated by a management company?

Most charter schools are started by teachers and people associated with education. They need the management company to run the school while they focus on teaching.

Is it OK to make a profit?

“It is OK to make a profit in education if it is the result of producing quality education for children,” said Ronine.