Realizing the Promise of Brand-Name Schools

The last decade has witnessed a new approach to school reform of radical promise. New systems of public schools, overseen by a private organization and operating under a common "brand," aim to move beyond the isolated successes of individual charter or district schools and bring high-quality schooling to scale. Approaches vary, and their proponents insist on unique designations. The first branded school operators, dubbed education management organizations (EMOs), were generally organized as for-profit entities that managed schools, whether charter or district, comprehensively. Typically, they sought to impose, with varying degrees of prescription, a school design (including such elements as school structure, schedule, curriculum, instructional programs, and use of technology) on their client schools. Edison Schools, founded in 1992 and now educating some eighty thousand students in twenty-two states and the District of Columbia, is the largest EMO.¹

The number of schools, charter or traditional, managed by for-profit companies is as yet small. As of 2003, some two hundred thousand students attended schools run by EMOs; in comparison, at least 1 million students are estimated to be homeschooled. Still, the phenomenon has significance beyond its numbers. First, private sector operators, promising to "reinvent" public schools, could foster valuable innovations in primary and secondary schooling. Entrepreneurial initiative could provide a useful jolt to the public education system, which, it is generally agreed, is chronically failing to educate large numbers of students, particularly minority children from economically disadvantaged families. Privately run schools could challenge calcified practices and inject an element of productive competition into school districts, which have heretofore enjoyed an exclusive franchise. Second, branded school organizations may also offer a way to fuel the proliferation of charter schools, which is increasingly constrained by the shortage of founders committed to evidence-based school designs and possessing the broad-ranging skills to make good on their plans. The founders of branded school organizations aim to open not one school serving a few hundred students but multiple schools serving thousands. Third, contracting out chronically underperforming schools to private management organizations is one alternative allowed school districts under the system of progressive sanctions prescribed in the federal No Child Left Behind Act.

Finally, the early experiences of the first branded school organizations can add a rare empirical dimension to an otherwise theoretical discussion of market-oriented reform proposals. For example, in the debate over school vouchers, surprisingly little attention has been paid to the circumstances under which new supply would be created outside of existing seats in district schools and a small number of private schools; yet the creation of such new seats is necessary if the salutary effects of competition are to be realized. The experiences of EMOs to date suggest the economic and regulatory conditions under which operators will risk private capital to open new schools in voucher markets.

While Edison holds contracts to operate both district schools ("contract schools") and charter schools, the competitors it prompted manage primarily or exclusively charter schools. In the new bargain charters extended—authority and autonomy in exchange for accountability—education entrepreneurs saw an opportunity: private organizations could help start and run public schools, free of many of the debilitating constraints of the district system. Although in few states could private companies hold a charter directly, in many they could enter into a contract to manage the educational program and day-to-day operations of independent charter schools. Many organizations manage schools in their entirety, implementing their own curriculum, hiring the school staff, overseeing all day-to-day school operations, and assuming responsibility for academic outcomes. Some offer only administrative services to their client schools, like accounting, payroll, and purchasing.

By the school year 2003-04, there were some fifty-one for-profit education management organizations running one or more schools, for a total of 463 schools in twenty-eight states and the District of Columbia.² Of these organizations, thirty operated fewer than four schools. Eight organizations...