Pursuit of money, learning mix

Do the profit motive and learning mix? In Michigan, the answer, so far, is – yes.

Students at Michigan charter schools operated by for-profit companies perform the same or better academically as their peers at charters run by nonprofits, according to a Bridge Magazine analysis.

While they perform the same, they don’t always perform well. Some charter schools are among the best schools in the state, but a troubling proportion -- run by for-profits, nonprofits as well as self-managed -- perform far below the norm.

The findings are of critical interest to parents and policy-makers in Michigan, which has the highest proportion of for-profit charter schools in the nation. In December 2011, several legislators proposed a ban on for-profit charter operators, citing concerns that the search for profits undermined education.

The executive director of Royal Oak-based Education Trust-Midwest wasn’t surprised by the findings. Raising academic achievement “is not about governance of schools,” said Amber Arellano, “it’s about performance.”

Little difference found in data

The analysis, conducted in partnership with Public Sector Consultants, a Lansing-based research firm, builds upon Bridge’s State Academic Champs ranking, which scored traditional districts and charters by how well they fare compared to other schools with the same poverty levels. In essence, the analysis ranks schools by how much value they add to a student’s expected education. See how your school ranks in the state.

That analysis found that most charter schools are clumped at the ends -- among the top and bottom schools in the state.

In 11th-grade MEAP scores, 52 percent of charter schools scored in the bottom quarter of the Value-Added Matrix (VAM), compared to 21 percent of traditional districts. Overall, 48 percent of charters have VAM scores in the bottom quarter, compared to 22 percent of traditional districts.

But in that same analysis, three of the top five schools were charters.

Whatever separates high-performing charters from low-performing charters, it doesn’t appear to be the schools’ business models.

Charters operated by for-profit companies and those operated by nonprofit associations were similar in their students’ academic performance, with for-profit-operated schools scoring slightly better on average. How do nonprofit charters, for-profit charters and traditional schools compare?

Both had a VAM average just slightly below the average traditional school overall.

“What you found is what is found whenever it is looked at,” said Gary Naeyaert, senior adviser for the Gov. John Engler Center for Charter Schools at Central Michigan University. “There has been no research I’m aware of that shows any performance differential between a management company that is for profit versus nonprofit.”

Nevertheless, New York state banned for-profit operation of charter schools in 2010. Education reformer Diane Ravitch, once an outspoken proponent of charter schools, now rails against for-profits, telling The American Prospect magazine last fall that “corporations aren’t going to put more money into the school, they’re only going to make money. This should make people in America angry. There ought to be a public uprising about this effort to destroy public education.”

In 2011, after the Legislature and Gov. Rick Snyder lifted the cap on the number of charter schools, state Sens. Rebekah Warren, D-Ann Arbor, and Hoon-Yung Hopgood, D-Taylor, introduced legislation to ban for-profit companies from operating charters in Michigan.

“Our leadership is now opening the floodgates and sending tax dollars directly to for-profit, corporate managed schools,” Warren said at the time. “Public education has always been the great equalizer in our society and I remain steadfast in my dedication to that ideal. There is simply no place for profit in the classroom.”

“Despite my many attempts to prevent this forced privatization of our education system, Republican leadership in the Legislature is clearly determined to undermine public education as we know it,” Hopgood said in 2011. “The resulting system will push faltering districts to the point of failure and use our tax dollars to subsidize the bottom lines of for-profit education corporations around the country.”

Neither Warren nor Hopgood could be reached for comment on Bridge’s analysis.

Naeyaert argues that profit versus nonprofit “is not where the debate should be.

“People believe on the street that a nonprofit entity is more pure. But there is no difference here.”

Dan Quisenberry, president of the Michigan Association of Public School Academies, a charter school group, believes the debate going forward will be over “standards and metrics” that offer a nuanced view on school success, and how to spread that success. School reform “is about the quality of the education they’re providing, not the adults running it,” Quisenberry said.

National Heritage stands out

National Heritage Academies, a national for-profit company, stood out as operating the best-scoring charters in Michigan, with over half of its 46 schools ranking in the top quarter of all traditional schools and charters in the state.

“It’s a demonstration of the hard work we’re doing,” said NHA’s Todd McKee. “We want to get all our kids to a college readiness standard, but we want our competitors to get there as well . Our competitors aren’t there yet.”

Arellano admits that it’s “naive” to believe the profit motive doesn’t have an impact at some schools. Not all for-profit companies operate charters that are as successful as National Heritage Academies.

“We need to be honest about what may fuel the interest in opening more schools,” Arellano said.

Still, her organization has remained neutral on the profit/nonprofit debate. “It’s a quality issue (rather than governance,) Arellano said. “It’s hard for people to wrap their heads around that,” she said.

Senior Writer Ron French joined Bridge in 2011 after having won more than 40 national and state journalism awards since he joined the Detroit News in 1995. French has a long track record of uncovering emerging issues and changing the public policy debate through his work. In 2006, he foretold the coming crisis in the auto industry in a special report detailing how worker health-care costs threatened to bankrupt General Motors.

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James Joseph
Thu, 02/28/2013 - 8:51am
The glaringly absent item in this story is the location of these high-achieving charters. Are any of the high-achievers in socio-economically challenged areas? Or are these charters for the financially gifted? Please compare apples to apples. The real question should be are the charters out-performing the public schools under the same conditions. Are they required to follow the same rules that are mandated on public schools? Are they required to serve emotionally and physically impaired students? Are they required to have their teachers state certified? The reasoning behind opening up more charters was to provide options for students who aren't being served by their public school. If the real reason is to get a piece of the pie from quality school districts, then the "for-profit" charters are not doing a service for Michigan's citizens, but rather skimming the cream from the pot.
Thu, 02/28/2013 - 10:25am
You know why Heritage Academies score so well? Look at where they are located. Nice, upper-middle class communities, for the most part. The THREE Heritage schools within my district's boundaries (and we are a high-performing, middle- to upper-middle-class district) draw their student population not from poor, underserved families, but rather from families who have the financial resources to be able to transport their students to and from school each day. In addition, at least one of their schools has a racial makeup VERY different from the rest of the district, with an overabundance of Indian and Chinese students who wanted to get into our district's Talented and Gifted program but just missed the cutoff. As the commenter above stated, you are not comparing apples to apples.
Ron French
Thu, 02/28/2013 - 10:32am
You would be right if we were comparing raw test scores. But we're not. What we've done is place all schools on a grid that takes into account the percentage of students who are eligible for free and reduced lunch, and then compares schools to how similar socioeconomic schools to see how much value they're adding above expectations. It's not uncommon in this value-added matrix for a high-poverty school with mediocre test scores to have a very high Value Added Matrix score - because the school is being ranked by how they are doing with the kids who walk through their door. If a National Heritage school scores well in our Value Added Matrix, it's because the school's students are performing better than students at schools with similar levels of poverty.
Charles Richards
Thu, 02/28/2013 - 1:41pm
This is very good. I particularly appreciated the Value Added Matrix, but I wonder if you can take it one step further and apply standard statistical procedures to test whether or not the averages of the diffeent classes of schools are significantly different. Also, why not refine your VAM one further step by adding the percentage of adults with a four year degree or better. I think you will find it adds considerable explanatory power.
Thu, 02/28/2013 - 4:33pm
It all begs the question, "Why would we want public dollars to go into private pockets as profits, when they do not perform as well as traditional schools?" Why? It is money wasted. Put it into teacher salaries, buildings and materials that serve the public welfare now and in the future.
Gene Markel
Thu, 02/28/2013 - 5:42pm
In a for profit venture owners and/or stock holders expect a return on their Investment. In the case of for profit schools income must exceed expenses to compensate owners and/or stock holders. In the case of government funded schools an given amount in excess of expenses must be charge to the state to satisfy the owners and/or stock holders. To me this should be classified as corporate welfare.
Ron Lemke
Sun, 03/03/2013 - 10:40am
I find it iinteresting that with such varying degrees of success the State continues to fund and expand the number of for Profit Charter Schools. They dont have to play by all the same rules as the Public Schools do. Whats wrong with this picture. What do they do for Special Education and CTE or Vocational Education?
Chuck Jordan
Sun, 03/03/2013 - 11:47am
"While they perform the same, they don’t always perform well. Some charter schools are among the best schools in the state, but a troubling proportion — run by for-profits, nonprofits as well as self-managed — perform far below the norm. - See more at: http://bridgemi.com/2013/02/pursuit-of-money-learning-mix/#sthash.m29oar..." So why isn't the headline: Charter schools "perform far below the norm?" I also wonder how many "disadvantaged" kids go to these top 3 charters? Are the numbers statistically valid?
Bill Bock
Mon, 03/04/2013 - 10:24am
Why compare for-profit and not-for-profit charter schools? Why not compare for-profit and public schools? Let's start with Muskegon Heights, and let's begin with the number of teachers, required by law to be certified by the state of Michgan, who are NOT certified, and are working illegally there? I'm sure those teachers are earning a profit for the corporation that owns the education of Muskegon Heights students. Is that how we're measuring educational success now? By how much money is earned by for-profit entities? As a witness to the dimantling of public education in Michigan, and the resulting widening chasm between haves and have nots, I am disheartened to say the least by the premise upon which this article was written. I expect more from Bridge, and Center for Michigan.