Altogether, EMOs now operate more than 30 percent of the nation's charter schools

Contact:  Gary Miron, (269-599-7965); gary.miron@wmich.edu Mark Schwerin, WMU, (269) 387-8400, mark.schwerin@wmich.edu William Mathis, NEPC, (802) 383-0058; William.Mathis@colorado.edu

BOULDER, CO and KALAMAZOO, MI (December 15, 2010)—The world of school management companies is changing. While the growth of for-profit education management organizations has, for the past several years, been slow, their nonprofit counterparts show sustained and steady growth, a study by researchers at Western Michigan University (WMU) has found.

The new report, "Profiles of Nonprofit Education Management Organizations - 2009-2010," was released jointly by the WMU’s Study Group on Education Management Organizations and the National Education Policy Center, housed at the University of Colorado at Boulder. It was written by Gary Miron, WMU professor of educational leadership, research and technology, and Jessica Urschel, a WMU graduate research assistant. Miron and Urschel also co-authored, along with Arizona State University professor Alex Molnar, a report released last week, on for-profit EMOs.

Education management organizations are for-profit or nonprofit entities that manage schools receiving public funds, including district and charter public schools. The new Nonprofit Profiles report documents the number of nonprofit firms managing publicly funded schools, identifies the schools they manage, and records the number of students those schools enroll.

The EMO sector emerged in the 1990s as part of an effort to use market forces to reform public education. Until a few years ago, most attention had been focused on for-profit EMOs; however, more recently interest and funding have increasingly focused on the nonprofit management sector. Taken together, for-profit and non-profit EMOs now operate more than 30 percent of the nation's charter schools.

“While concerns about profit motives are not as apparent with nonprofit organizations, there remain concerns about how public governance of these schools is being affected. The nonprofit EMOs are quite diverse," Miron says. "Some of them charge similar fees and behave similarly to for-profit EMOs.”

One emerging distinction noted by Urshel is that some of the more prominent and successful nonprofit EMOs have received a great deal of philanthropic support. “An increasing number of the nonprofit EMOs are bringing additional financial resources to the charter schools they operate. These are resources they receive from private foundations."

The report identifies 137 nonprofit EMOs operating in 26 states, with the greatest concentration of schools in Texas, California, Arizona and Ohio. It identifies 19 large nonprofit EMOs (operating 10 or more schools), 52 medium-sized nonprofit EMOs (operating four to nine schools) and 66 small nonprofit EMOs (operating three or fewer schools). The largest by far is KIPP, the Knowledge is Power Program, which now operates a total of 82 charter schools.

Altogether, nonprofit EMOs operate 813 schools, compared with 729 operated by for-profit EMOs. The share of schools managed by large, medium-sized and small nonprofits is more evenly distributed than in the for-profit sector, however. While large organizations manage 74 percent of all schools in the for-profit EMO sector, they manage only 45 percent in the nonprofit sector.

Adequate Yearly Progress (AYP) ratings were collected for 738 of the 813 schools managed by nonprofit EMOs. AYP provides an indicator, although only a crude one, of the extent to which schools are meeting state standards. Of the schools managed by nonprofit EMOs, 60% made AYP and 40% did not. This can be compared with the schools managed by for-profit EMOs, 53% of which made AYP and 47% did not.

The report is likely to be of interest to policymakers, educators, philanthropists, school district officials and school board members who wish to learn more about current or potential contractors. Like the for-profit Profiles series, the nonprofit Profiles may also be of interest to journalists and researchers studying education management organizations.

Nonprofit profiles report--other findings

• Nonprofit EMOs operated public schools in 26 of the nation’s 50 states last year, with the greatest concentration in Texas, California, Arizona and Ohio.
• More than 97 percent of the schools managed by nonprofit EMOs are charter schools.
• Growth in the number of different nonprofit EMOs, the number of schools managed, and enrollment in the nonprofit EMO sector continues to grow. Since the previous year alone, the number of nonprofit EMOs has increased by 2.2%, the number of schools operated by nonprofit EMOs increased by 10.0%, and the number of students enrolled in these nonprofit EMO schools increased by 22.2%.
• KIPP, the Knowledge is Power Program, a national charter school network, experienced the largest net increase in schools during the past school year, growing from 64 to 82 schools.
• In total, the nonprofit EMO-operated schools profiled in this report enrolled 237,591 students during the 2009-10 school year.

Find Profiles of For-Profit Education Management Organizations – 2009-2010, by Gary Miron, and Jessica Urschel, on the web at:  http://nepc.colorado.edu/publication/EMO-NP-09-10

The mission of the National Education Policy Center is to produce and disseminate high-quality, peer-reviewed research to inform education policy discussions. We are guided by the belief that the democratic governance of public education is strengthened when policies are based on sound evidence. For more information on NEPC, please visit http://nepc.colorado.edu/.

Learn more about the Study Group on Education Management Organizations, based at Western Michigan University, by visiting its Web site. http://www.wmich.edu/leadership/emo/.

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