Commentary

What the Privatized Education Sector Looks Like

Two new reports out of the Education Policy Research Unit at Arizona State University profile the Nonprofit and the For-profit Education Management Sector. The report offers detailed information about almost every management company from Green Dot to K12 Inc.

The reports defines an education management organization, or EMO, as an organization or firm that manages schools receiving public funds, including district and charter public schools. A contract details the terms under which executive authority to run one or more schools is given to an EMO in return for a commitment to produce measurable outcomes within a given time frame.

Profiles of Nonprofit Education Management Organizations: 2008-2009

A few facts from the new report:

  • While the number of schools operated by for-profit EMOs grew rapidly in the 1990s and is now leveling off, the number of schools operated by nonprofit EMOs has been growing more steadily and steeply over time.
  • Nonprofit EMOs operated public schools in 25 states during the 2008-09 school
    year.
  • Nonprofit EMOs are most prevalent in Texas, California, Arizona, and Ohio. In terms of the proportion of charter schools managed by nonprofit EMOs, Illinois stands out, with 72% of its charter schools managed by nonprofit EMOs.
  • Nonprofit EMOs are garnering more support and are growing steadily, while the growth of for-profit EMOs is slowing.
  • A total of 103 nonprofit EMOs were identified and profiled in this report, including 16 large nonprofit EMOs, 40 medium-sized, and 47 small nonprofit EMOs.
  • The number of nonprofit EMOs that operated at least one charter school in 1995 is estimated to be 5. This number increased rapidly until 2004. Since then, only 5 new nonprofit EMOs have been established, although the number of schools operated by the existing organizations continues to grow.
  • KIPP, the Knowledge is Power Program, a national charter school network, experienced the largest net increase in schools during the past school year, from 57 to 64 schools.

Profiles of For-Profit Educational Management Organizations: 2008-2009

A few facts from the new report:

  • Since the first Profiles report was published for the 1997-1998 school year, the number of for-profit EMOs profiled has increased from 14 to 95, and the number of states in which EMOs are operating from 16 to 31.
  • Since the first Profiles report was produced for the 1997-1998 school year, the number of schools managed by for-profit EMOs has increased to 733 from 131. In the past year, the number of profiled schools has increased dramatically, to 733 from 533. However, we estimate that the actual number of EMO-managed public schools has leveled off over the past few years and attribute the dramatic increase only to a change in our methods.
  • Of the 733 schools profiled in this report, 74% are operated by large EMOs.
  • Fully 94% of EMO-managed schools are charter schools, and 6% are district schools. The number of district schools operated by EMOs continued to decline between 2007-2008 and 2008-2009.
  • The majority (57%) of EMO-managed schools profiled are primary schools.
  • The number of virtual schools operated by EMOs increased from 40 in 2007-2008 to 56 in 2008-2009. This is equivalent to 7.6% of all schools managed by for-profit EMOs.
  • The five states with the highest numbers of schools managed by for-profit EMOs are Michigan (191), Florida (136), Arizona (103), Ohio (95), and Pennsylvania (39).
  • The number of students in profiled EMO-managed schools increased by 84,809 in the last year. In total, the EMO-operated schools profiled in this report enrolled 339,222 students during the 2008-2009 school year.

Lisa Snell is the director of education and child welfare at Reason Foundation, a nonprofit think tank advancing free minds and free markets.