What’s the new vocabulary word for the week in school districts? “Portfolio diversification.”

This common Wall Street term is becoming popular as districts, realizing that a one-size-fits-all approach to schools isn’t working, are offering a portfolio of options to parents —traditional, charter, privately managed, and some schools run by universities and nonprofits. The portfolio system allows superintendents to act less like bureaucratic overseers and more like direction-setters. This is a very big deal; it is nothing less than the restructuring of public education from bureaucratic dinosaur to a modern organization.

A district considering the shift from top-down management to a portfolio of schools should focus on these crucial elements: 

  • A governing relationship between district and school that’s marked by mutual performance expectations and clear learning goals.
  • Operational autonomy and adequate resources for schools, including build-level personnel control.
  • Effective use of achievement data to improve instruction. 

Cities such as New York, Chicago, Boston, Baltimore, and Philadelphia are among the many districts pursuing this strategy. According to a report by Paul Hill for the Progressive Policy Institute, the Chicago Public School District is the most “notable example” of this approach. In fact, the city is in the process of creating more than 100 new schools by 2010.

A small number of districts in Ohio (those that have been exposed to real external competition from charters and vouchers) have also begun to pursue the portfolio approach. The Toledo Public Schools sponsors various charter, magnet, traditional, and (Gates supported) small high schools. Cleveland just announced it will sponsor a new Entrepreneurship Preparatory School this summer as well as a charter school for at- risk boys. Dayton and Columbus are working to create portfolios of their own.

So far so good. But are portfolio schools simply old wine put in new bottles? Consider this. The decision of the Columbus Public Schools to sponsor a charter school where teachers, still required to be in the teachers union, are paid 20 to 25 percent less than regular district teachers. The approach here seems more like an opportunity to find ways to save the district money during tight fiscal times rather than an opportunity to use the freedom and flexibility of the charter school law (which allows the hiring of non-union teachers) to create excellence. Other charter efforts being led by districts, such as the Akron City School District’s Akron Digital Academy, raise other concerns. In this case, the Digital Academy, according to a recent state audit, pays its sponsor (Akron City School District) $1,445,790 for services. This isn’t freedom for accountability; it’s a district program wrapped up as a charter school. 

In sum, there is real hope that a few forward-looking Ohio school district leaders are recognizing that charter schools and other school choice options, instead of being viewed as a threat, can become an asset in district reform strategies. Unfortunately, there is also a danger that districts may use the charter opportunity to create more of the same, while calling it something different.

Put Learning First: A Portfolio Approach to Public Schools,” by Paul Hill, Progressive Policy Institute, February 2006. 

Cleveland Charter School Opening With High Hopes,” by Scott Stephens, Plain Dealer, March 28, 2006.

Charter Schools are Urged to Switch,” by Tracy Jan, Boston Globe, April 10, 2006.

Union Teachers to Work at Charters, but at Reduced Pay,” by Bill Bush, Columbus Dispatch, April 5, 2006.

Akron Digital Academy Financial Audit, Auditor of State, 7/01/2004-06/30/05.


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