An EMO is an organization or firm that manages at least one school that recieves public funds and operates the public school(s) it manages under the same admissions rules as regular public schools. EMOs can be for-profit or nonprofit organizations. They can manage traditional public schools or charter schools.
Education management organizations emerged in the early 1990s in the context of widespread interest in market-based school reform proposals. Wall Street analysts coined the term EMO as an analogue to health maintenance organizations (HMOs). Proponents of EMOs claim that they bring a much needed dose of entrepreneurial spirit and a competitive ethos to public education. Opponents argue that outsourcing to EMOs results in already limited school resources being redirected for service fees, profits, or both while creating another layer of administration. Opponents also have expressed concerns about the implications of public bodies relinquishing control or ownership of schools.
EMOs vary on a number of dimensions, such as whether they have for-profit or nonprofit status, whether they work with charter schools, district schools, or both, or whether they are a large regional or national franchise or a single-site operator. Historically, a smaller portion of EMOs have been nonprofits. In recent years, however, the number of nonprofit EMOs has surpassed the number of for-profit EMOs. The for-profit EMOs operate more schools on average, but the number of schools operated by nonprofit EMOs is approaching the number of schools operated by for-profits.
As this graph indicates, the growth of the for-profit EMOs is slowing, while the number of schools operated by nonprofit EMOs continues to grow at an increasing rate.