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February 2014

Exploring Public Charter Schools

Education / Public Charter Schools /

Exploring Public Charter Schools

The charter school concept traces it roots back to 1991 when Minnesota passed the first charter school legislation.

Key Insights

  • While public charter schools have been in existence for more than 20 years, they have experienced accelerated growth for the past decade and the pace is expected to continue.
  • Growth continues to be driven by new, innovative learning models, alternative environments and purpose-built facilities that offer choice in education.
  • Market demand has outpaced the available facilities creating a significant need for facilities financing

Public charter schools are “…independent public schools that are allowed the freedom to be more innovative [than regular public schools] while being held accountable for improved student achievement,” according to the National Alliance for Public Charter Schools.  The “charter” establishing each such school is a performance contract detailing the school’s mission, program, goals, students served, methods of assessment and ways to measure success. The core of the public charter school model is the belief that public schools should be held accountable for student learning. In exchange for this accountability, school leaders are given freedom to adapt their school’s educational approach to help students achieve success.

Foremost among the many reasons public charter schools exist is that there is an overwhelming demand for quality, innovative education. They’re often started by parents, teachers, principals and community organizations to serve the needs of the community. Parents want to give their children the greatest educational opportunity. This desire is at the heart of the charter school concept. It fuels a unique partnership between passionate parents, educators, and community leaders.

Operating Environment

Public charter schools come in a wide variety of types, including traditional and nontraditional schools; they may include hybrid virtual learning environments. Public charter schools can span any combination of grades. They also run under a variety of academic themes. From a legal standpoint, they can be for-profit or not-for-profit. Some are part of a nonprofit charter management organization (CMO) or are contracted out to a for-profit education management organization (EMO). The role of a CMO or EMO includes back office functions including hiring, professional development, data analysis, public relations and advocacy.  There are also wholly independent self-managed public charter schools.

State legislatures create and modify the laws which enable the creation of public charter schools. They are expected to follow the same health, safety and accountability laws as established by state and federal law requirements as do regular public schools. They are also subject to requirementsand regulations that are tied to specific federal and state grants and funds like regular public schools. Public charter schools are generally free from local district regulations and procedures and have more flexibility around curriculum,schedules, buildings and staffing.

Market Environment

From 2007-08 to 2013-14 Public Charter Schools have experienced 100% growth. In 2013 enrollment increased 13% to over 2.5 million students, while the number of schools grew 7% to nearly 6,500 schools. This significant and consistent demand for educational choice has pushed the waiting list for students who desire to get in a public charter school to over 1 million students.   80.3% of charter schools indicated having a waitlist at the start of the 2013-14 school year.

This demand has also created a severe facilities gap. Rarely is a vacant school building available in good condition or in a suitable location. Often, a space must either be adapted or upgraded, renovated to current standards, which adds to the expense. Some public charter schools have benefactors to help pay for a facility or even donate one, but most especially in lower-income areas—do not.

Schools have coped with facilities needs by growing in stages. They might begin with a K-2 school, with a planned expansion to K-5 or K-8 after the second or third year. While this minimizes capital costs at startup, repeated moves to accommodate growth is inefficient, de-stabilizing and ultimately incurs additional costs. Lacking financial sophistication, long-term lease or mortgage arrangements and/or full-sized facilities continue to remain elusive for the vast majority of public charter schools.

Meanwhile, access to predictable capital for facilities is varied. Only a few states offer additional funding for facilities or access to former public school facilities. Bond funding is elusive to the majority and only captured by a very few seasoned schools. Commercial bank loans also are of limited availability. Money from foundations, states and federal funding has built some capacity through loan guarantee and credit enhancement funds. Thus, there remains a major opportunity in the charter school sector for a turnkey capital solution to the facilities issue

A Smarter Way

Public charter schools came into existence to meet the desire of parents to have more choice in the quality of education they provide for their children.  Over the years, the concept has seen consistent growth – both in the number of charter schools as well as the academic success of those schools.  Today, the charter school segment is poised for further growth.  With waiting lists approaching one million students, the segment continues to demonstrate its ability to evolve the way we deliver the educational experience.


Digest of Education Statistics. National Center for Education Statistics. Web. 2012. 21. Dec. 2013.

Public Charter Schools Facilities: NAPCS National Charter School Survey School Year 2011-12. National Alliance for Public Charter Schools. Web. 2012. 15. Dec. 2013.

National Alliance of Public Charter Schools.

National Charter School Study. CREDO, Stanford University. 2013. 15. Dec. 2013.

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