Setting the Record Straight: Quality Charter School Sponsorship Costs Money

A July 3rdToledo Blade article, and a later editorial, suggested that all charter school operators and sponsors in Ohio are in the business to make money. Wrong. The Thomas B. Fordham Foundation sponsors nine schools in southwest Ohio (we sponsored ten for most of the 2005-06 school year, but one left us in May because we were too demanding), and I can say definitively that quality sponsorship costs significantly more, at least in the first few years, than schools pay in fees. Sponsors can receive up to three percent of their basic state per-pupil payment, though most sponsors charge less.

Sponsors are the organizations that "license" charters on the state's behalf. These organizations are crucial for monitoring, guiding, and supporting schools--as well as for holding schools accountable for their academic performance and financial stewardship. There are at least three reasons why sponsorship in Ohio is not a simple money-maker for sponsoring organizations.

First, as is the case with charter schools, quality sponsors incur start-up costs that no public dollars cover. For example, in becoming a charter sponsor, Fordham spent a full year exploring the responsibilities, risks, and costs of quality sponsorship before signing a contract with the Ohio Board of Education. This entailed traveling to five other states to learn their best practices. Additionally, a quality sponsor has to spend significant sums of upfront money on legal help to determine its legal obligations and liabilities (including those of individual board members and staff). Suitable insurance coverage must be obtained. Competent staff members must be hired to manage the sponsorship operation. All this takes place before signing any contracts with schools, indeed before even knowing for certain which schools might ultimately sign contracts, and what revenue might accompany them. (Keep in mind that Ohio charter schools can choose among many possible sponsors.)

Second, seven of the ten schools that we sponsored during the 2005-06 school year had formerly been sponsored by the Ohio Department of Education. This meant they had previously developed various procedures and reporting processes that we asked them to modify in order to ensure better compliance. That cost money, too. For example, we've invested in adapting and implementing a computerized "oversight information system" geared towards the compliance needs of our schools and the state of Ohio. This web-based tracking system assists Fordham-sponsored schools in submitting compliance documents to us on a regular basis, and has replaced the cumbersome paper-and-file records that schools used in the past. It makes key documents available to us and the schools on a real-time and as-needed basis. An invaluable tool. But hardly cheap, either for us or for the Fordham-sponsored schools.

Third, under Ohio law, charter sponsors are expected to offer their schools "technical assistance" of various sorts. During our first year working closely with schools, we discovered that some have real needs. These vary by school but include efficient financial management systems, comprehensive curricula, and holistic assessment of whether the school's various parts are working well together. Fordham has invested hundreds of thousands of dollars to help address schools' various requests for such help. Not having enough money ourselves, or in fees paid by the schools, we sought and obtained support from the Bill and Melinda Gates Foundation. Why couldn't the schools themselves pay for such assistance? Ohio's charter schools are sorely under-funded, operating with about 70 percent of the dollars-per-pupil that district schools receive. Additionally, while district schools are spending lavishly on new buildings, charters receive no facility dollars.  

The fact of the matter is that, when it comes to sponsorship, Ohio and its taxpayers are getting an incredible bargain by working with groups like the Thomas B. Fordham Foundation. For every state dollar invested in Fordham sponsorship, we've spent at least two dollars of private money to support the schools we sponsor. This is not sustainable over the long-term, nor should it be. Charter schools are public schools and the public should pay their essential costs.

Based on our experience as a "quality sponsor", it's absurd to suggest, as The Toledo Blade has, that charter schools are a cash cow for their nonprofit sponsors. Decent sponsors and charter operators bring more to the table than they receive and Ohioans are smart to encourage this.

"A Political Education," Editorial, The Toledo Blade, July 10, 2006.

"Groups Clamor to Sponsor Ohio Charter Schools," by Ignazio Messina, The Toledo Blade, July 3, 2006.

More By Author