Charter schools in the United States

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In 2003 Granada Hills Charter High School became the largest charter school in the United States

 

Charter schools in the United States are primary or secondary education institutions that do not charge fees to pupils who take state-mandated exams. These charter schools are subject to fewer rules, regulations, and statutes than traditional state schools, but receive less public funding than public schools, typically a fixed amount per pupil. There are both non-profit and for-profit charter schools, and only non-profit charters can receive donations from private sources.

As of 2016-2017 there were an estimated 6,900 public charter schools in 42 states and the District of Columbia (2016–17) with approximately 3.1 million students, a sixfold increase in enrollment over the past 15 years. In 2015 alone, more than 400 new charter schools opened while 270 schools closed due to low enrollment, lack of finances or low performance. Waiting lists grew from an average of 233 in 2009 to 277 in 2012, with places allocated by a lottery. They educate the majority of children in New Orleans Public Schools. Some charter schools provide a specialized curriculum (for example in arts, mathematics, or vocational training). Charter schools are attended by choice.

They may be founded by teachers, parents, or activists although state-authorized charters (schools not chartered by local school districts) are often established by non-profit groups, universities, or government entities. School districts may permit corporations to manage multiple charter schools. The first charter school law was in Minnesota in 1991. 

They sometimes face opposition from local boards, state education agencies, and unions. Public-school advocates assert that charter schools are designed to compete with public schools.

History

The charter school idea in the United States was originated in 1974 by Ray Budde, a professor at the University of Massachusetts Amherst. Albert Shanker, President of the American Federation of Teachers, embraced the concept in 1988, when he called for the reform of the public schools by establishing "charter schools" or "schools of choice." Gloria Ladson-Billings called him "the first person to publicly propose charter schools." At the time, a few schools already existed that were not called charter schools but embodied some of their principles, such as H-B Woodlawn. 

As originally conceived, the ideal model of a charter school was as a legally and financially autonomous public school (without tuition, religious affiliation, or selective student admissions) that would operate much like a private business—free from many state laws and district regulations, and accountable more for student outcomes rather than for processes or inputs (such as Carnegie Units and teacher certification requirements). 

Minnesota was the first state to pass a charter school law in 1991. California was second, in 1992. As of 2015, 43 states and the District of Columbia have charter school laws, according to the Center for Education Reform.

As of 2012 an authorizer other than a local school board has granted over 60 percent of charters across the country. Between 2009 and 2012, the percent of charter schools implementing performance-based compensation increased from 19 percent to 37 percent, while the proportion that is unionized decreased from 12 percent to 7 percent. The most popular educational focus is college preparation (30 percent), while 8 percent focus on Science, Technology, Engineering, and Mathematics. Another 16 percent emphasize Core Knowledge. Blended Learning (6 percent) and Virtual/Online learning (2 percent) are in use. When compared to traditional public schools, charters serve a more disadvantaged student population, including more low-income and minority students. Sixty-one percent of charter schools serve a student population where over 60 percent qualify for the federal Free or Reduced Lunch Program. Charter schools receive an average 36 percent less revenue per student than traditional public schools, and receive no facilities funds. The number of charters providing a longer school day grew from 23 percent in 2009 to 48 percent in 2012.

General structure and characteristics

The rules and structure of charter schools depend on state authorizing legislation and differ from state to state. A charter school is authorized to function once it has received a charter, a statutorily defined performance contract detailing the school's mission, program, goals, students served, methods of assessment, and ways to measure success. The length of time for which charters are granted varies, but most are granted for 3–5 years.

Operational autonomy

Charter schools operate as autonomous public schools through waivers from many of the procedural requirements of district public schools. These waivers do not mean a school is exempt from the same educational standards set by the state or district. Charter advocates believe this autonomy can be critically important for creating an environment where operators can focus on a strong academic program. Many schools develop a school culture that maximizes student motivation by emphasizing high expectations, academic rigor, discipline, and relationships with caring adults.

Affirming students, particularly minority students in urban school districts, whose school performance is affected by social phenomena including stereotype threat, acting white, non-dominant cultural capital, and a "code of the street" may require the charter to create a carefully balanced school culture to meet peoples' needs in each unique context. Most teachers, by a 68 percent to 21 percent margin, say schools would be better for students if principals and teachers had more control and flexibility about work rules and school duties.

Accountability for student achievement

Charter schools are accountable for student achievement by their sponsor—a local school board, state education agency, university, or other entity—to produce positive academic results and adhere to the charter contract. While this accountability is one of the key arguments in favor of charters, evidence gathered by the United States Department of Education suggests that charter schools may not, in practice, be held to higher standards of accountability than traditional public schools. Typically, these schools are allowed to remain open, perhaps with new leadership or restructuring, or perhaps with no change at all. Charter school proponents assert that charter schools are not given the opportunities to restructure often and are simply closed down when students perform poorly on these assessments. As of March 2009, 12.5% of the over 5000 charter schools founded in the United States had closed for reasons including academic, financial, and managerial problems, and occasionally consolidation or district interference. A 2013 Study by the Center for Research on Education Outcomes (CREDO) at Stanford University institute linked overall improvement of the charter school sector to charter school closures, suggesting that charter schools as a whole are not getting better, but the closure of bad schools is improving the system as a whole.

Many charter schools are created with the original intent of providing a unique and innovative educational experience to its students. However, charter schools are still held accountable for test scores, state mandates, and other traditional requirements that often have the effect of turning the charter school into a similar model and design as the public schools.

Although the U.S. Department of Education's findings agree with those of the National Education Association (NEA), their study points out the limitations of such studies and the inability to hold constant other important factors, and notes that "study design does not allow us to determine whether or not traditional public schools are more effective than charter schools."

Chartering authorities

Chartering authorizers, entities that may legally issue charters, differ from state to state, as do the bodies that are legally entitled to apply for and operate under such charters. In some states, like Arkansas, the State Board of Education authorizes charters. In other states, like Maryland, only the local school district may issue charters. Some school districts may authorize charter schools as part of a larger program for systemic improvement, such as the Portfolio strategy. States including Arizona and the District of Columbia have created independent charter-authorizing bodies to which applicants may apply for a charter. The laws that permit the most charter development, as seen in Minnesota and Michigan, allow for a combination of such authorizers. As of 2012, 39% of charters were authorized by local districts, 28% by state boards of education, 12% by State Commissions, with the remainder by Universities, Cities and others.

Charter operators may include local school districts, institutions of higher education, non-profit corporations, and, in some states, for-profit corporations. Wisconsin, California, Michigan, and Arizona allow for-profit corporations to manage charter schools.

Caps

According to the National Alliance for Public Charter Schools, twenty-six states and the District of Columbia have some type of limit or cap on charter schools. These states restrict the number of charter schools that may be authorized or the number of students a single school can enroll.

Andrew Rotherham, co-founder of Education Sector and opponent of charter school caps, has written, "One might be willing to accept this pent-up demand if charter school caps, or the debate over them, were addressing the greater concern of charter school quality. But this is not the case. Statutory caps as they exist now are too blunt a policy instrument to sufficiently address quality. They fail to differentiate between good schools and lousy schools and between successful charter school authorizers and those with a poor track record of running charter schools. And, all the while, they limit public schooling options and choices for parents."

Demographics

The U.S. Department of Education's 1997 First Year Report, part of a four-year national study on charters, was based on interviews of 225 charter schools in 10 states. The report found charters tended to be small (fewer than 200 students) and represented primarily new schools, though some schools had converted to charter status. Charter schools often tended to exist in urban locations, rather than rural. This study also found enormous variation among states. Charter schools tended to be somewhat more racially diverse, and to enroll slightly fewer students with special needs or limited English proficiency than the average schools in their state.

In 2012, the annual survey produced by the Center for Education Reform, a pro-charter school group, found that 60% of charter school students qualified for free or reduced lunches. This qualification is a common proxy for determining how many low-income students a given school enrolls. The same survey found that half of all charter school students fall into categories that are classified as 'at risk'."

Funding

Charter school funding is dictated by each state. In many states, charter schools are funded by transferring per-pupil state aid from the school district where the charter school student resides. Charters on average receive less money per-pupil than the corresponding public schools in their areas, though the average figure is controversial because some charter schools do not enroll a proportionate number of students that require special education or student support services. Additionally, some charters are not required to provide transportation and nutrition services. The Federal Elementary and Secondary Education Act, Part B, Sections 502–511 authorizes funding grants for charter schools. 

In August 2005, the Thomas B. Fordam Institute, a pro-charter group, published a national report of charter school finance. It found that across 16 states and the District of Columbia —which collectively enrolled 84 percent of that year's one million charter school students—, charter schools receive about 22 percent less public funding per-pupil than the district schools that surround them, a difference of about $1,800. For a typical charter school of 250 students, that amounts to about $450,000 per year. The study asserts that the funding gap is wider in most of twenty-seven urban school districts studied, where it amounts to $2,200 per student, and that in cities like San Diego and Atlanta, charters receive 40% less than traditional public schools. The funding gap was largest in South Carolina, California, Ohio, Georgia, Wisconsin and Missouri. The report suggests that the primary driver of the district-charter funding gap is charter schools' lack of access to local and capital funding. 

A 2010 study found that charters received 64 percent of their district counterparts, averaging $7,131 per pupil compared to the average per pupil expenditure of $11,184 in the traditional public schools in 2009/10 compared to $10,771 per pupil at conventional district public schools. Charters raise an average of some $500 per student in additional revenue from donors.

However, funding differences across districts remain considerable in most states that use local property taxes for revenue. Charters that are funded based on a statewide average may have an advantage if they are located in a low-income district, or be at a disadvantage if located in a high-income district.

Virtual charter schools

In November 2015, the first major study into online charter schools in the United States, the National Study of Online Charter Schools, was published. It found "significantly weaker academic performance" in maths and reading in such schools when they were compared to conventional ones. The study was the result of research carried out in 17 US states which had online charter schools, and was conducted by researchers from the University of Washington, Stanford University and Mathematica Policy Research. It concluded that keeping online pupils focused on their work was the biggest problem faced by online charter schools, and that in mathematics the difference in attainment between online pupils and their conventionally educated peers equated to the cyber pupils missing a whole academic year in school.

State-specific structure and regulations

State laws follow varied sets of key organizing principles based on the Citizens League's recommendations for Minnesota, American Federation of Teachers guidelines, or federal charter-school legislation (U.S. Department of Education). Principles govern sponsorship, number of schools, regulatory waivers, degree of fiscal/legal autonomy, and performance expectations.

Center for Education Reform ranking

Current laws have been characterized as either "strong" or "weak." "Strong-law" states mandate considerable autonomy from local labor-management agreements and bureaucracy, allow a significant number of charter schools to be authorized by multiple charter-granting agencies, and allocate a level of funding consistent with the statewide per pupil average. According to the Center for Education Reform, a pro-charter group, in 2015 the District of Columbia, Michigan, Indiana, Minnesota, and Arizona had the "strongest" laws in the nation. Maryland, Virginia and Kansas are home to the nation's "weakest" laws, according to the same ranking.

National evaluations

Multiple researchers and organizations have examined educational outcomes for students who attend charter schools. In general, urban charter schools may appear to be a good alternative to traditional urban schools for urban minority students in poor neighborhoods, if one looks strictly at test scores, but students in suburban charter schools do no better than those in traditional suburban schools serving a mostly middle-class white population.

Center for Research on Education Outcomes

CREDO studies charter schools and has completed two national reports for 2009 and 2013. The report is the first detailed national assessment of charter schools. The reports analyze the impact of charter schools in 26 states and find a steady improvement in charter school quality since 2009.

The authors state, "On average, students attending charter schools have eight additional days of learning in reading and the same days of learning in math per year compared to their peers in traditional public schools." Charter schools also have varying impacts on different demographic groups. Black students in charters get an extra 7 days of learning in reading. For low-income charter school students the advantage is 14 days of extra learning in reading and 22 days in math. English Language Learner students in charter schools see a 43-day learning advantage over traditional public school students in reading and an extra 36 days advantage in math.

Charter schools showed a significantly greater variation in quality between states and within states. For example, Arizona charter school students had a 29-day disadvantage in math compared to public school students but charter school students in D.C. had a 105-day advantage over their peers in public schools. While the obvious solution to the widely varying quality of charter schools would be to close those that perform below the level of public schools, this is hard to accomplish in practice as even a poor school has its supporters.

Criticism and debate

Stanford economist Caroline Hoxby criticized the study, resulting in a written debate with the authors. She originally argued the study "contains a serious statistical mistake that causes a negative bias in its estimate of how charter schools affect achievement," but after CREDO countered the remarks, saying Hoxby's "memo is riddled with serious errors" Hoxby revised her original criticism. The debate ended with a written "Finale" by CREDO that rebuts both Hoxby's original and revised criticism.

The National Education Policy Center has criticized the methods that CREDO has used in its studies. They criticized the CREDO studies for: "over-interpreting small effect sizes; failing to justify the statistical assumptions underlying the group comparisons made; not taking into account or acknowledging the large body of charter school research beyond CREDO's own work; ignoring the limitations inherent in the research approach they have taken, or at least failing to clearly communicate limitations to readers."

National Bureau of Economic Research study

In 2004, the National Bureau of Economic Research found data that suggested Charter Schools increase competition in a given jurisdiction, thus improving the quality of traditional public schools (noncharters) in the area. Using end-of-year test scores for grades three through eight from North Carolina's state testing program, researchers found that charter school competition raised the composite test scores in district schools, even though the students leaving district schools for the charters tended to have above average test scores. The introduction of charter schools in the state caused an approximate one percent increase in the score, which constitutes about one quarter of the average yearly growth. The gain was roughly two to five times greater than the gain from decreasing the student-faculty ratio by 1. This research could partially explain how other studies have found a small significant difference in comparing educational outcomes between charter and traditional public schools. It may be that in some cases, charter schools actually improve other public schools by raising educational standards in the area.

American Federation of Teachers study

A report by the American Federation of Teachers, a teachers' union, stated that students attending charter schools tied to school boards do not fare any better or worse statistically in reading and math scores than students attending public schools. This report was based on a study conducted as part of the National Assessment of Educational Progress in 2003. The study included a sample of 6000 4th grade pupils and was the first national comparison of test scores among children in charter schools and regular public schools. Rod Paige, the U.S. Secretary of Education from 2001 to 2005, issued a statement saying (among other things) that, "according to the authors of the data the Times cites, differences between charter and regular public schools in achievement test scores vanish when examined by race or ethnicity." Additionally, a number of prominent research experts called into question the usefulness of the findings and the interpretation of the data in an advertisement funded by a pro-charter group. Harvard economist Caroline Hoxby also criticized the report and the sample data, saying "An analysis of charter schools that is statistically meaningful requires larger numbers of students."

Caroline Hoxby studies

A 2000 paper by Caroline Hoxby found that charter school students do better than public school students, although this advantage was found only "among white non-Hispanics, males, and students who have a parent with at least a high school diploma". Hoxby released a follow up paper in 2004 with Jonah Rockoff, Assistant Professor of Economics and Finance at the Columbia Graduate School of Business, claiming to have again found that charter school students do better than public school students. This second study compared charter school students "to the schools that their students would most likely otherwise attend: the nearest regular public school with a similar racial composition." It reported that the students in charter schools performed better in both math and reading. It also reported that the longer the charter school had been in operation, the more favorably its students compared.

Criticism

The paper was the subject of controversy in 2005 when Princeton assistant professor Jesse Rothstein was unable to replicate her results. Hoxby's methodology in this study has also been criticized, arguing that Hoxby's "assessment of school outcomes is based on the share of students who are proficient at reading or math but not the average test score of the students. That's like knowing the poverty rate but not the average income of a community—useful but incomplete." How representative the study is has also been criticized, as the study is only of students in Chicago.

Learning gains studies

A common approach in education evaluation research is to compare the learning gains of individual students in charter schools to their gains when they were in traditional public schools. Thus, in effect, each student acts as his/her own control to assess the impact of charter schools. A few selected examples of this work find that charter schools on average outperform the traditional public schools that supplied students, at least after the charter school had been in operation for a few years. A possible limitation of this type of study is that it does not automatically distinguish between possible benefits of how the school operates (e.g. school structure) and possible peer effects, that is, effects of students on each other. At the same time, there appears to be a wide variation in the effectiveness of individual charter schools.

Meta-analyses

A report issued by the National Alliance for Public Charter Schools, released in July 2005 and updated in October 2006, looks at twenty-six studies that make some attempt to look at change over time in charter school student or school performance. Twelve of these find that overall gains in charter schools were larger than other public schools; four find charter schools' gains higher in certain significant categories of schools, such as elementary schools, high schools, or schools serving at risk students; six find comparable gains in charter and traditional public schools; and, four find that charter schools' overall gains lagged behind. The study also looks at whether individual charter schools improve their performance with age (e.g. after overcoming start-up challenges). Of these, five of seven studies find that as charter schools mature, they improve. The other two find no significant differences between older and younger charter schools.

A more recent synthesis of findings conducted by Vanderbilt University indicates that solid conclusions cannot be drawn from the existing studies, due to their methodological shortcomings and conflicting results, and proposes standards for future meta-analyses.

National Center for Education Statistics study

A study released on August 22, 2006 by the National Center for Education Statistics (NCES) found that students in charter schools performed several points worse than students in traditional public schools in both reading and math on the National Assessment of Educational Progress test. Some proponents consider this the best study as they believe by incorporating basic demographic, regional, or school characteristics simultaneously it "...  has shown conclusively, through rigorous, replicated, and representative research, whether charter schools boost student achievement ...", while they say that in the AFT study "...  estimates of differences between charter schools and traditional public schools are overstated." Critics of this study argue that its demographic controls are highly unreliable, as percentage of students receiving free lunches does not correlate well to poverty levels, and some charter schools do not offer free lunches at all, skewing their apparent demographics towards higher income levels than actually occur.

United States Department of Education study

In its Evaluation of the Public Charter Schools Program: Final Report released in 2003, the U.S. Department of Education found that, in the five case study states, charter schools were out-performed by traditional public schools in meeting state performance standards, but noted: "It is impossible to know from this study whether that is because of the performance of the schools, the prior achievement of the students, or some other factor."

Local evaluations of charter schools

Boston

A study in the Boston Public Schools (BPS) District compared Boston's charter schools to their district school peers as well as Boston's pilot schools, which are public schools that have been granted the flexibility to determine their own budgets, staffing, curricula, and scheduling but remain part of the local school district and subject to collectively bargained pay scales and seniority protections. The report performed analyses using both statistical controls and using pilot and charter applicant lotteries. 

The results using statistical controls to control for demographic and baseline state test scores found a positive effect among charter schools similar to a year spent in one of Boston's selective exam schools, with math scores, for instance, showing positive effects of 0.18 and 0.22 standard deviations for charter middle and high schools respectively compared to an effect of 0.20 and 0.16 standard deviations for exam schools. For pilot schools, the report found that in the middle school grades pilot school students modestly underperform relative to similar students attending traditional BPS schools (-0.05 standard deviations in ELA and -0.07 in math) while showing slightly positive results in the high school grades for pilot schools (0.15 standard deviations for writing and 0.06 for math). 

The results using a sub-sample of schools with random lottery results found very large positive effects in both math and ELA scores for charter schools, including 0.16 and 0.19 standard deviations in middle and high school ELA scores respectively and 0.36 and 0.17 standard deviations in middle and high school math scores respectively. Boston's pilot schools, however, showed a concerning negative effect in middle school math and ELA and a slightly positive effect in high school.

Los Angeles

CREDO evaluated the impact of charter schools in Los Angeles from 2008 to 2012. The study found that over 48% of Los Angeles charters outperform local public schools in reading and 44% percent of Los Angeles charters outperform local public schools in math. The study concludes they believe not every charter will outperform traditional public schools, but that conditions are well suited for growth. 

An evaluation of Los Angeles charter schools from 2002 to 2008, published in the American Journal of Education, contends that a rapidly diversifying group of schools in the period did not improve charter school student's performance relative to their public school peers.

New Orleans

A 2010 case study by the Harvard Business School examined the charter school reform efforts in New Orleans. Since Hurricane Katrina, the district is now composed of 70 Recovery School District (RSD) schools managed by the state (including 37 RSD charter schools) and 16 schools managed by the local Orleans Parish School Board (OPSB) (including 12 OPSB charter schools). Charter schools now account for more than 60% of the public schools in New Orleans. RSD Schools are a result of Act 9 of the Louisiana State Legislature passed in 2003 to manage under-performing schools throughout the state.

When evaluating New Orleans' schools against the 200 point index called the State Performance Index (SPI),19 of the 20 highest performing non-selective schools were charter schools. Charter schools affiliated with charter management organizations such as KIPP tended to perform better than stand-alone schools. The overall percentage of schools performing below the failing mark of 60 fell from 64% in 2005 to 36% in 2009. 

A 2015 study contends that although charter schools may seem to be improving the system overall, these metrics do not take into account race, as many of the underperforming charters primarily educate African-American students. It offers significant concern that current metrics for evaluation are ignoring significant portions of the population and that the media is not taking this into account when considering the impact of charter schools on New Orleans.

Policy and practice

As more states start charter schools, there is increasing speculation about upcoming legislation. In an innovation-diffusion study surveying education policy experts in fifty states, Michael Mintrom and Sandra Vergari (1997) found that charter legislation is more likely to be considered in states with poor test scores, Republican legislative control, and proximity to other states with high quality charter schools. Legislative enthusiasm, gubernatorial support, interactions with national authorities, and use of permissive charter-law models increase the chances for adopting what they consider stronger laws. He feels union support and restrictive models lead to adoption of what he considers weaker laws. 

The threat of vouchers, wavering support for public education, and bipartisan support for charters has led some unions to start charters themselves. Several AFT chapters, such as those in Houston and Dallas, have themselves started charters. In New York City, the United Federation of Teachers operates a charter school serving grades 9-12 in Brooklyn, NY. The National Education Association has allocated $1.5 million to help members start charter schools. Proponents claim that charters offer teachers a measure of empowerment, employee ownership, and governance that might be enhanced by union assistance (Nathan). Former President Bush's No Child Left Behind Act also promotes charter schools. 

Over two dozen private management companies are scrambling to increase their 10 percent share of a "more hospitable and entrepreneurial market" (Stecklow 1997). In the late 1990s Boston-based Advantage Schools Inc., a corporation specializing in for-profit schooling, has contracted to run charter schools in New Jersey, Arizona, and North Carolina. In July 2001, Advantage Schools, Inc. was acquired by Mosaica Education. The Education Development Corporation was planning in the summer of 1997 to manage nine nonsectarian charter schools in Michigan, using cost-cutting measures employed in Christian schools.

Public opinion

Historically, Americans have been evenly split on the idea of Charter schools, with a roughly even mix of support versus opposition between 2000-2005. There is also widespread sentiment that states should hold Charters accountable, with 80% thinking so in 2005. However, openness to Charter schools has been increasing especially among minority communities who have shifted opinions higher than the national average. A 2011 Phi Delta Kappa International-Gallup Poll reported that public support for charter schools stood at a "decade-high" of 70%.

Charter schools provide an alternative for educators, families and communities who are dissatisfied with educational quality and school district bureaucracies at noncharter schools. In early 2008, the Friedman Foundation for Educational Choice, a pro-charter organization, conducted two polls in primarily conservative states Idaho and Nevada where they asked parents about their preferences concerning education. In Idaho, only 12% of respondents said that their regular public school was their top choice for the children's school. Most preferred private schools over other options. In 2008, Polls conducted in the conservative states Georgia and Wyoming found similar results.

The charter approach uses market principles from the private sector, including accountability and consumer choice, to offer new public sector options that remain nonsectarian and non-exclusive. Many people, such as former President Bill Clinton, see charter schools, with their emphasis on autonomy and accountability, as a workable political compromise and an alternative to vouchers. Others, such as former President George W. Bush, see charter schools as a way to improve schools without antagonizing the teachers' union. Bush made charter schools a major part of his No Child Left Behind Act. Despite these endorsements, a recent report by the AFT has shown charter schools not faring as well as public schools on state administered standardized testing, though the report has been heavily criticized by conservatives like William G. Howell of the Brookings Institution. Other charter school opponents have examined the competing claims and suggest that most students in charter schools perform the same or worse than their traditional public school counterparts on standardized tests.

Both charter school proponents and critics admit that individual schools of public choice have the potential to develop into successful or unsuccessful models. In a May 2009 policy report issued by Education Sector, "Food for Thought: Building a High-Quality School Choice Market", author Erin Dillon argues that market forces alone will not provide the necessary supply and demand for excellent public schools, especially in low-income, urban neighborhoods that often witness low student achievement. According to Dillon, "In order to pressure all public schools to improve and to raise student achievement overall, school choice reforms need to not just increase the supply of any schools. They need to increase the supply of good schools, and parents who know how to find them." Drawing lessons from successful food and banking enterprises located in poor, inner-city neighborhoods, the report recommends that policymakers enhance the charter school market by providing more information to consumers, forging community partnerships, allowing for more flexible school financing, and mapping the quality of the education market.

Debate over funding

Nearly all charter schools face implementation obstacles, but newly created schools are most vulnerable. Some charter advocates claim that new charters tend to be plagued by resource limitations, particularly inadequate startup funds. Yet a few charter schools also attract large amounts of interest and money from private sources such as the Gates Foundation, the Walton Family Foundation, the Broad Foundation, and the NewSchools Venture Fund. Sometimes private businesses and foundations, such as the Ameritech Corporation in Michigan and the Annenberg Fund in California, provide support.

Although charter advocates recommend the schools control all per-pupil funds, charter advocates claim that their schools rarely receive as much funding as other public schools. In reality, this is not necessarily the case in the complex world of school funding. Charter schools in California were guaranteed a set amount of district funding that in some districts amounted to $800 per student per year more than traditional public schools received until a new law was passed that took effect in fall 2006. Charter advocates claim that their schools generally lack access to funding for facilities and special program funds distributed on a district basis. Congress and the President allocated $80 million to support charter-school activities in fiscal year 1998, up from $51 million in 1997. Despite the possibility of additional private and non-district funding, a government study showed that charter school may still lag behind traditional public school achievement.

Although charter schools may receive less public funding than traditional public schools, a portion of charter schools' operating costs can come from sources outside public funding (such as private funding in the form of donations). A study funded by the American Federation of Teachers found that in DC charter schools, private funding accounted for $780 per pupil on average and, combined with a higher level of public funding in some charters (mostly due to non-district funding), resulted in considerably higher funding when compared to comparable public schools. Without federal funding, private funding, and "other income", D.C. charter schools received slightly more on average ($8,725 versus $8,676 per pupil), but that funding was more concentrated in the better funded charter schools (as seen by the median DC charter school funding of $7,940 per pupil). With federal, private, and "other income", charter school funding shot up to an average of $11,644 versus the district $10,384 per pupil. The median here showed an even more unequal distribution of the funds with a median of $10,333. Other research, using different funding data for DC schools and including funding for school facilities, finds conflicting results.

Charters sometimes face opposition from local boards, state education agencies, and unions. Many educators are concerned that charter schools might siphon off badly needed funds for regular schools, as well as students. In addition, public-school advocates assert that charter schools are designed to compete with public schools in a destructive and harmful manner rather than work in harmony with them. To minimize these harmful effects, the American Federation of Teachers urges that charter schools adopt high standards, hire only certified teachers, and maintain teachers' collective-bargaining rights. 

According to a recent study published in December 2011 by the Center for Education Reform, the national percentage of charter closures were as follows: 42% of charter schools close as a direct result of financial issues, whereas only 19% of charter schools closed due to academic problems. Congress and the President allocated $80 million to support charter-school activities in fiscal year 1998, up from $51 million in 1997. Despite the possibility of additional private and non-district funding, a government study showed that charter school may still lag behind traditional public school achievement.

Co-location

Co-location or collocation of charter schools in public noncharter school buildings has been practiced in both New York City and Chicago and is controversial. Since students planning to attend charter schools are generally students who would have attended noncharter schools, co-location permits reassigning seating for the same students from one kind of school to the other in the same building, so that, while space might have to be rebuilt, entire schools do not have to be built from the ground up. The cost savings let more charter schools open. Co-location also permits the two kinds of schools to be visible to each other, thereby promoting school reform, especially within families whose children attend both schools in the same building. It may also mean that a government administration responsible for overseeing noncharter public schools loses political turf as it gives up space to independently-run charter schools.

Criticism

Difficulties with accountability

The basic concept of charter schools is that they exercise increased autonomy in return for greater accountability. They are meant to be held accountable for both academic results and fiscal practices to several groups, including the sponsor that grants them, the parents who choose them, and the public that funds them. Charter schools can theoretically be closed for failing to meet the terms set forth in their charter, but in practice, this can be difficult, divisive, and controversial. One example was the 2003 revocation of the charter for a school called Urban Pioneer in the San Francisco Unified School District, which first came under scrutiny when two students died on a school wilderness outing. An auditor's report found that the school was in financial disarray and posted the lowest test scores of any school in the district except those serving entirely non-English-speakers. It was also accused of academic fraud, graduating students with far fewer than the required credits. There is also the case of California Charter Academy, where a publicly funded but privately run chain of 60 charter schools became insolvent in August 2004, despite a budget of $100 million, which left thousands of children without a school to attend.

In March 2009, the Center for Education Reform released its latest data on charter school closures. At that time they found that 657 of the more than 5250 charter schools that have ever opened had closed, for reasons ranging from district consolidation to failure to attract students. The study found that "41 percent of the nation's charter closures resulted from financial deficiencies caused by either low student enrollment or inequitable funding," while 14% had closed due to poor academic performance. The report also found that the absence of achievement data "correlates directly with the weakness of a state's charter school law. For example, states like Iowa, Mississippi, Virginia and Wyoming have laws ranked either "D" or "F". Progress among these schools has not been tracked objectively or clearly." A 2005 paper found that in Connecticut, which it characterized as having been highly selective in approving charter applications, a relatively large proportion of poorly performing charter schools have closed. Under Connecticut's relatively weak charter law, only 21 charter schools have opened in all, and of those, five have closed. Of those, 3 closed for financial reasons. Charter school students in Connecticut are funded on average $4,278 less than regular public school students.

In a September 2007 public policy report, education experts Andrew Rotherham and Sara Mead of Education Sector offered a series of recommendations to improve charter school quality through increased accountability. Some of their recommendations urged policymakers to: (i) provide more public oversight of charter school authorizers, including the removal of poor-quality authorizers, (ii) improve the quality of student performance data with more longitudinal student-linked data and multiple measures of school performance, and (iii) clarify state laws related to charter school closure, especially the treatment of displaced students. All but 17% of charter school students show no improvement when compared to a heuristically modeled virtual twin traditional public school. Educational gains from switching to charter schools from public schools have on average been shown to be "small or insignificant" (Zimmer, et al.) and tend to decline over a span of time (Byrnes). Charter schools provided no substantial improvement in students' educational outcomes that could not be accounted for in a public school setting (Gleason, Clark and Clark Tuttle). Attrition rates for teachers in charter schools have shown annual rates as high as 40%. Students also tend to move from charter schools prior to graduation more often than do students in public schools (Finch, Lapsley and Baker-Boudissa). Charter schools are often regarded as an outgrowth of the Powell Manifesto advocating corporate domination of the American democratic process and are considered to represent vested interests' attempts to mold public opinion via public school education and to claim a share of this $500–600 billion-dollar industry.

Scalability

Whether the charter school model can be scaled up to the size of a public noncharter school system has been questioned, when teaching demands more from teachers and many noncharter teachers are apparently unable to teach in the way charters seek, as has been suggested by Arne Duncan, U.S. Secretary of Education, Diane Ravitch, education historian and former assistant U.S. education secretary, Mark Roosevelt, former schools chief for Pittsburgh, Penn., U.S., and Dave Levin, of the KIPP charters However, some, such as Eva Moskowitz of Success Academy Charter Schools, believe that the work is hard but performable and compensable and that the model can be scaled up.

Exploitation by for-profit entities

"The education industry," according to these analysts, "represents ... the final frontier of a number of sectors once under public control" that have either voluntarily opened or ... have "been forced" to open up to private enterprise. Indeed ..."the education industry represents the largest market opportunity" since health-care services were privatized during the 1970's ... From the point of view of private profit, one of these analysts enthusiastically observes, "The K–12 market is the Big Enchilada".

—Jonathan Kozol

Critics have accused for-profit entities, (education management organizations, EMOs) and private foundations such as the Bill and Melinda Gates Foundation, the Eli and Edythe Broad Foundation, and the Walton Family Foundation of funding Charter school initiatives to undermine public education and turn education into a "Business Model" which can make a profit. According to activist Jonathan Kozol, education is seen as one of the biggest market opportunities in America or "the big enchilada".

Shift from progressive to conservative movement

Charters were originally a progressive movement (called the "small schools" movement) started by University of Massachusetts professor Ray Budde and American Federation of Teachers leader Al Shanker to explore best practices for education without bureaucracy. However, some critics argue that the charter movement has shifted into an effort to privatize education and attack teachers' unions. For example, education historian Diane Ravitch has estimated, as a "safe guess," that 95% of charters in the United States are non-union and has said that charters follow an unsustainable practice of requiring teachers to work unusually long hours.

Better student test scores / Teacher issues

According to a study done by Vanderbilt University, teachers in charter schools are 1.32 times more likely to leave teaching than a public school teacher. Another 2004 study done by the Department of Education found that charter schools "are less likely than traditional public schools to employ teachers meeting state certification standards." A national evaluation by Stanford University found that "students attending charter schools have eight additional days of learning in reading and the same days of learning in math per year compared to their peers in traditional public schools" (see earlier in this article). If the goal is increased competition, parents can examine the data and avoid the failing charters, while favoring the successful charters, and chartering institutions can decline to continue to support charters with mediocre performance.

It is as yet unclear whether charters' test results will affect the enacting of future legislation. A Pennsylvania legislator who voted to create charter schools, State Rep. Mark B. Cohen of Philadelphia, said that "Charter schools offer increased flexibility to parents and administrators, but at a cost of reduced job security to school personnel. The evidence to date shows that the higher turnover of staff undermines school performance more than it enhances it, and that the problems of urban education are far too great for enhanced managerial authority to solve in the absence of far greater resources of staff, technology, and state of the art buildings."

Admissions lottery

When admission depends on a random lottery, some hopeful applicants may be disappointed. A film about the admission lottery at the Success Academy Charter Schools (then known as Harlem Success Academy) has been shown as The Lottery. It was inspired by a 2008 lottery. The 2010 documentary Waiting for "Superman" also examines this issue. A lottery, however, ensures those in wealthier districts do not have a better chance of being accepted.

A lottery is a means of allocating a scarce resource, in this case a spot in a desirable charter school. They are used in schools that are at capacity. Other charter schools, whose goal is maximizing enrollment, do not employ a lottery.

Collective bargaining

Concern has also been raised about the exemption of charter school teachers from states' collective bargaining laws, especially because "charter school teachers are even more likely than traditional public school teachers to be beset by the burn-out caused by working long hours, in poor facilities." As of July 2009, "an increasing number of teachers at charter schools" were attempting to restore collective bargaining rights. Steven Brill, in his book, Class Warfare: Inside the Fight to Fix America's Schools (2011), changed his position on charter schools and unions. He said that after two years of researching school reform, he understood the complexities. He reversed his view of union leader Randi Weingarten and suggested she run the school system for a city.

Racial segregation

One study states that charter schools increase racial segregation. A UCLA report points out that most charter schools are located in African-American neighborhoods. However, a recent statistical analysis of racial segregation and performance outcomes in U.S. charter schools notes that studies on race and charter schools often incorrectly confound the inter-dependent variables of race and family income (poverty). Moreover, the authors conclude: "charter schools with a strong academic focus and "no-excuses" philosophy that serve poor black students in urban areas stand as contradictions to the general association between school-level poverty and academic achievement. These very high-poverty, high-minority schools produce achievement gains that are substantially greater than the traditional public schools in the same catchment areas."

Selective admission

Some charter schools may engage in selective admission of students likely to succeed. This may be accomplished through tests, evaluation of student records, or even interviews with children's parents.