December 2, 2015

New Private School Management Organizations Come in Different Shapes and Sizes

By Bellwether

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Charter management organizations (CMOs) have driven much of the growth in quality charter school options in the public sector. An emerging group of private school management organizations (PSMOs) has the potential to do the same in the private sector.
In a paper released this morning, Juliet Squire, Andy Smarick, and I undertake what we believe to be the first-ever study of PSMOs. Through research and interviews with the leaders of 14 existing PSMOs—collectively operating 134 schools serving 42,000 kids—we explore the nature of PSMOs, how existing PSMOs are similar to and different from one another, and what it will take to support the growth of high-quality private school networks.
We define PSMOs as independent entities that operate or help operate three or more private schools. This means that PSMOs (1) are neither governmental agencies nor embedded within a church hierarchy; (2) directly operate or support the operation of schools including hiring staff, procuring supplies, providing back-office supports, and more; and (3) run at least three private schools.
Through our research we identified five key factors that differentiate the PSMOs in our study:

  • Whether they operate new or existing schools: Similar to CMOs, some PSMOs operate “takeover” or “turnaround” schools while others open new schools.
  • The type of growth they are pursuing: In some cases networks are looking for ways to help schools make their financial ends meet, usually through growing enrollment in existing schools. We call this “sustainability” growth. Other PSMOs plan to add more high-quality seats by opening new schools. We call this “footprint” growth.
  • Their funding models: Most commonly, PSMOs rely on tuition, philanthropy, public programs, or a blend of those three sources.
  • Their degree of independence from a religious institution: PSMOs often operate faith-based schools and in some cases have to navigate complex church hierarchies. We classify PSMOs into three categories: church-operated PSMOs, which are operated by an office or body within the church but are separate from the traditional reporting structure of the church; church-affiliated PSMOs, which are separate 501(c)(3) organizations that manage a subset of schools through a negotiated contract with the church; and independent PSMOs, which are fully independent of a religious institution.
  • Their degree of operational and academic centralization: We sought to understand whether the PSMO central office or individual schools are responsible for decisions related to securing facilities, curriculum, classroom materials, scheduling, and hiring teachers and other school-based staff.

Using these five dimensions we categorized the PSMOs in our study into three types:

  1. Redemptive Networks generally operate existing schools, have a sustainability-focused growth mindset, are either church-operated or church-affiliated, and are academically decentralized but operationally centralized. These networks typically rely on either philanthropy or family-paid tuition to support the operating costs of the schools in their portfolios. Six networks—the Catholic Partnership Schools, Faith in the Future, Independence Mission Schools, Jubilee Schools, Partnership Schools, and the San Jose Drexel Schools—fit in this category.
  1. Expansion Networks look most similar to the CMOs found in the public sector. They open new schools, have plans to grow their footprints, are funded primarily through either tuition or public programs, are fully independent of religious institutions, and are generally academically and operationally centralized. Five networks—Blyth-Templeton, HOPE Christian Schools, LUMIN, Thales Academy, and The Oaks Academy—fit in this category.
  1. Hybrid Networks share some characteristics with both Redemptive and Expansion Networks, but have undertaken innovative approaches to their models that distinguish them in important ways from other PSMOs. Notre Dame ACE Academies, Cristo Rey, and the Denver Street Schools are all Hybrid Networks.

Many private schools have a long track record of providing a high-quality education to low-income and minority students living in our nation’s inner cities. While there is limited evidence to date of the academic track records of PSMOs, they have the potential to greatly expand the private school options to which families have access. Understanding the key differentiating factors among existing PSMOs is key to understanding how social entrepreneurs, practitioners, policymakers, advocates, and philanthropists can support the creation, growth, and development of PSMOs and more high-quality private schools for families.

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