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WMU study shows EMOs run 30 percent of charter schools

Dec. 20, 2010

KALAMAZOO--A new study by Western Michigan University researchers shows that privately operated education management organizations, or EMOs, now operate more than 30 percent of charter schools across the nation.

The new report, titled "Profiles on Nonprofit Education Management Organizations--2009-2010," finds that while the growth of for-profit education management organizations has been slow, their nonprofit counterparts have enjoyed sustained and steady growth. The report was released jointly on Wednesday, Dec. 15, by the WMU-based Study Group on Education Management Organizations and the National Education Policy Center at the University of Colorado at Boulder.

The report is one of two released in the past week by the study group at WMU and the National Education Policy Center. The second study, titled "Profiles of For-Profit Education Management Organizations," finds that almost half of the public schools operated by for-profit EMOs have not met adequate yearly progress (AYP) benchmarks mandated under federal No Child Left Behind legislation.

Photo of Dr. Gary Miron, WMU.Both studies were written by Dr. Gary Miron, WMU professor of educational leadership, research and technology and Jessica Urschel, a WMU graduate research assistant. The for-profit EMO report was co-authored by Dr. Alex Molnar, a professor at Arizona State University.

Full reports (PDF files)
Profiles on Nonprofit Education Management Organizations
Profiles of For-Profit Education Management Organizations

The nonprofit EMO report notes that until a few years ago, most attention had been focused on for-profit EMOs; however, more interest and funding have increasingly been focused on the nonprofit management sector in recent years.

"While concerns about profit motives are not as apparent with nonprofit organizations, there remain concerns about how public governance of these schools is being affected," Miron says. "The nonprofit EMOs are quite diverse. Some of them charge similar fees and behave similarly to for-profit EMOs."

One emerging distinction noted by Urschel is that some of the more prominent and successful nonprofit EMOs have received a great deal of philanthropic support. "An increasing number of the nonprofit EMOs are bringing additional financial resources to the charter schools they operate," Urschel says. "These are resources which they funnel from private foundations."

Michigan, however, is not among the top states when it comes to the number of schools operated by nonprofit EMOs. The report identifies 137 nonprofit EMOs operating in 26 states, with the greatest concentration of schools in Texas, California, Arizona and Ohio.

Altogether, nonprofit EMOs operate 813 schools, compared with 729 operated by for-profit EMOs. The share of schools managed by large, medium-sized and small nonprofits is more evenly distributed than in the for-profit sector, however. While large organizations manage 74 percent of all schools in the for-profit EMO sector, they manage only 45 percent in the nonprofit sector. More than 97 percent of schools managed by nonprofit EMOs are charter schools.

The annual Profiles reports track trends in the education management industry. Education management organizations are private firms that manage charter schools or conventional public schools under contracts, either with charter holders or with public school districts. The EMO industry emerged in the 1990s in an effort to utilize market forces to reform public education.

The most recent Profiles report on for-profit EMOs, released on Dec. 9, marks the first-ever examination of how well schools run by for-profit EMOs are faring in meeting annual yearly progress requirements contained in No Child Left Behind.

Overall, it concludes that 53 percent of schools run by for-profit EMOs met AYP requirements in the 2009-10 school year, while 47 percent did not. Among schools managed by the largest EMOs (those managing 10 or more schools), just 49.5 percent made AYP. Schools managed by medium-sized EMOs (those managing four to nine schools) fared slightly better, with 54.3 percent making AYP.

The best results were produced by the smallest EMOs, those managing three or fewer schools, with 70.8 percent making AYP. On-line, or virtual schools run by for-profit EMOs performed the worst, with only 30 percent making AYP.

The for-profit study is of particular interest for states with large numbers of schools operated by EMOs, like Michigan. The five states with the highest numbers of schools managed by for-profit EMOs are Michigan (185), Florida (145), Arizona (99), Ohio (92) and Pennsylvania (40).

More than 93 percent of EMO-managed schools are charter schools, while less than 7 percent are district schools.

More information on the Study Group on Education Management Organizations at WMU is available at wmich.edu/leadership/emo.

For more information, contact Dr. Gary Miron, WMU professor of educational leadership, research and technology, at (269) 599-7965 or gary.miron@wmich.edu.

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Media contact: Mark Schwerin, (269) 387-8400, mark.schwerin@wmich.edu

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