October 10, 2024

Conscious Coupling: Exploring and Executing Charter Mergers and Partnerships

By Emile Session | Evan Coughenour

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Across the country, many charter school and network leaders are struggling to adjust to the new reality of K-12 enrollment declines and shrinking school budgets. While the federal government provided $190 billion to support COVID-19 recovery through the Elementary and Secondary School Emergency Relief Fund, schools and networks had to allocate the last of their funds by Sept. 30, 2024. For charters grappling with the possibilities of staff reductions or school closures, it may be time to consider alternate solutions.

Charter networks throughout the U.S. are now considering mergers as a promising path to stability. In addition to shoring up budgets, merging two or more charter networks can allow the networks to serve more students, expand programming, use staff more efficiently, share best practices, and strengthen their capability to work toward a shared mission. 

At the same time, executing a merger successfully requires a clear rationale, compatible school philosophies and models, committed leaders, and buy-in from the school community. Given the massive amount of time most mergers require, leaders must consider whether each school or network has the capacity to undertake and realize the benefits of a merger. The stakes are high: A merger that doesn’t achieve what the schools set out to accomplish can leave both entities weaker academically, culturally, and financially. While charter boards may initially consider a merger with the goal of increasing impact in a year, the reality is that successful exploration and implementation may span multiple school years. The two school cultures must create new collaboration practices, shared knowledge, and mutual trust to realize the benefits of the merger for all the stakeholders involved.

What circumstances make for a successful merger? How do schools know when a merger isn’t the right solution? In the past three years, Bellwether has learned key lessons while supporting charter networks as leaders confront questions about the future of their schools.

Lesson No. 1: A Longer Time Frame Gives Schools the Chance to “Go Deep”

The successful execution of a merger is more likely if all parties involved have a sufficient planning runway — typically 12-18 months. Bellwether partnered for one year with a K-8 charter school in a large northeastern city preparing to graduate its first eighth grade class. With ambitions to add a high school to its network and eventually expand to new geographies, they began to have exploratory conversations with a 9-12 charter high school that wanted to secure a stable middle to high school enrollment feeder pattern.

Bellwether facilitated early conversations between the schools to explore the risks and benefits of a potential merger. Over a five-month process, leaders at each school articulated an approach and a timeline for aligning the schools’ practices and identifying the systems that needed to be in place before they could operate as a unit. The schools also undertook due diligence with their respective legal counsel to understand their areas of incompatibility and the legal and political ramifications of moving forward with a merger. All the while, they engaged authorizers, funders, and their state charter association to build momentum with policymakers.

After signing a memorandum of understanding to move toward executing the merger, it was time to create an integration plan. Teams from each school created immediate communications and branding strategies along with longer-term programs to ensure student success. Bellwether then launched a larger merger planning team consisting of functional staff from both organizations who used the time to get to know each other and the schools’ corresponding programs.

The merger was ultimately approved at the end of the year-long engagement and the two charter networks moved forward as a combined K-12 school. The leaders prioritized transparent communication during this time, building confidence among staff and parents about what a “merger” meant for their jobs and children, respectively. This clarity ensured a smooth transition for an entire community adjusting to a new school configuration. 

The long project timeline was crucial to the success of the merger. It gave leaders from each organization the bandwidth to grapple with their different beliefs and working styles, which were as important as the on-paper characteristics and academic models of each organization. It also gave the network’s leadership the opportunity to consider the involved risks and trade-offs from all angles. For instance, resolving potentially hot-button issues like parental leave and staff redundancies before moving forward created clear expectations for all parties; it also allowed future colleagues to develop a mutual understanding and camaraderie they may not have achieved in a shorter merger time frame. Ultimately, the deliberate process meant that the two organizations were able to merge with complete confidence and build a foundation for their new organization.

Lesson No. 2: Thoughtful Decision-Making Leads to Long-Term Partnerships

Admittedly, the success of this network merger relied on large planning and administrative capacity, enabled in part by robust city, state, and private philanthropic funding. Many charter schools and networks don’t have this same capacity, especially in states with lower funding levels for schools. Regardless, thoughtful planning and communication can still ensure the possibility of mutually beneficial mergers. 

For example, Bellwether partnered with two midwestern urban networks about 90 minutes apart —  one K-8 and one a full K-12 — who were interested in expanding their impact and long-term sustainability. Bellwether’s team explored whether a merger would serve their mutual goals. 

The planning process, however, surfaced a number of early challenges. Each network had a small leadership team, meaning staff members weren’t able to dedicate significant time during the school year to have exploratory conversations about a merger without stepping away from their day-to-day operational duties. Additionally, urgent challenges that affected mission and stability, including high staff turnover and pervasive transportation challenges, required more time than expected from those same leaders.

Aligning on instructional approaches was also difficult. Both networks served students in grades K-8, making common curricular standards an early priority. But Bellwether and the schools soon learned that there simply wasn’t time or bandwidth to have deep, necessary conversations about curriculum and instruction within the five-month time frame allotted for the exploratory engagement. Compounding these challenges, the 90-minute drive between the two charter networks removed any possibility of shared enrollment pipelines or talent pools in the short term.

These constraints made a formal merger less appealing in the immediate term. However, the exploration process highlighted how each school could learn from the other’s strengths in areas like data management, staff retention, and school culture. As a result, Bellwether pivoted from helping to draft a merger plan to helping the networks create an exploratory learning partnership, bringing together experts from each school to build relationships and share best practices. The partners agreed to return to the question of a closer relationship via a merger in the future, and the learning partnership is now creating the mutual trust and infrastructure that are indispensable to explore that possibility.

In this case, taking a step back and slowing down the merger process allowed each school’s leadership team to focus on the current challenges at hand and learn more about their counterparts. By not rushing into a complex, high-risk formal merger — one that could have been disruptive to each network’s community — each network was able to learn how to collaborate with a peer organization and build trust that will serve them well in the long run.

These different experiences showcase that a measured approach with charter network mergers is the best approach. Success doesn’t always look like a formal merger; sometimes, it means moving slowly to create strategy, vision, and community buy-in. A prudent evaluation process with a healthy dose of transparent communication can set charter networks up for sustainability and result in a successful collaboration at the right time for everyone involved.

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