July 27, 2010
The head of the charter school office at the Department of Education, Michael Duffy, recently announced his decision to leave the government to work for Victory Schools, Inc. Victory Schools is a for-profit Educational Management Organization (EMO) that runs seven of the nine for-profit charter schools that are currently open in New York City. Duffy’s move attracted attention to the company’s business plans, which were complicated by the new charter school law passed in May that barred for-profit charter operators from opening more schools in the state. (The company might become a nonprofit to keep growing.) But Victory Schools’ performance has been left out of the discussion.
I decided to compare Victory Schools’ performance against that of its for-profit and not-for-profit charter school competitors in the city by looking at both the amount that the schools spent per pupil on management fees and their 2008-2009 progress report raw scores, which I then ranked independent of the DOE’s letter grades. (These grades were sharply questioned during the 2008-2009 school year.) I found that the five Victory Schools that had progress report scores in 2008-2009 placed in the bottom 35 percent of all charter schools and in the bottom 20 percent of schools citywide. Two schools — the NYC Charter High School for Architecture, Engineering, and Construction Industries and the Bronx Global Learning Institute for Girls — were too new to get a progress report score. Both, however, received evaluations of “underdeveloped” from the city.
These middling performance numbers come despite the fact that the seven schools paid around $2,163 per pupil to Victory Schools for the company’s services. This is 17 percent of these charter schools’ per pupil revenues from the state. The other two for-profit operated charter schools in New York City, Harriet Tubman Charter School and Brooklyn Excelsior Charter School, have idiosyncratic payment agreements with their operators — Edison Schools and National Heritage Academies, respectively — that make it difficult to incorporate them into this analysis. (Harriet Tubman paid around 16 percent of their per pupil funding to Edison Schools, the EMO that the school hired, but it owes Edison Schools significantly more money. National Heritage Academy schools, such as Brooklyn Excelsior, turn over all of their funds to the EMO’s central office, which then doles out the money according to the its guidelines.)
In comparison, charter schools in New York City operated by non-profit charter management organizations (CMOs), such as KIPP and Achievement First, pay significantly less in management fees. On average, CMO schools, which make up the vast majority of city charter schools, spent $986 per pupil, or 7 percent of their per pupil revenue, on management fees. To be fair, these CMOs could be subsidizing the true cost of their services by using philanthropic dollars to augment the fees they collect from individual schools. Victory Schools raise significantly fewer philanthropic dollars than CMO schools. Also, different management organizations provide different sets of services, making this comparison hard to nail down.
Charter schools operated by CMOs also perform significantly better, at least on the city’s progress reports. For instance, the Achievement First schools on average rank in the top quarter of all schools citywide, as do the Uncommon Schools charters old enough to have scores in 2008-2009. Taken together, KIPP schools ranked in the top 30 percent of schools citywide. One KIPP school, — KIPP AMP Academy — performed significantly worse than the other three KIPP schools.
To be sure, progress report performance is an imperfect metric and there could be other factors that account for both the measured achievement and financial disparities between Victory Schools charters and the CMO charters in New York City. Nonetheless, Michael Duffy will have his hands full navigating the complex legal and financial hurdles associated with the biggest for-profit charter operator in the city.
As always, I welcome your feedback. For more on the types of management organizations that charters use in New York City, check out this post. A full breakdown of the data I used for this analysis is available here.