Managers Team Up to Run Charters

June 15, 2005

Even before a single student had signed up for High Tech High School, the founders of the new charter school on San Diego Bay knew they didn’t want that first school to be their last.

“We definitely had this idea that we were not going to be an outpost in the wilderness,” recalled Larry G. Rosenstock, the founding principal of the highly regarded 5-year-old school. “We wanted to affect more children.”

To that end, Mr. Rosenstock and other leaders of the 450-student school worked with interested groups to start new schools around the country based on their distinctive, small-school design.

Yet after watching some schools in the far-flung network stray from the design’s core principles, last year they changed course and formed a nonprofit “charter-management organization.”

Thanks to that strategic and structural shift, they are now focused on opening their own clusters of small schools, where they can keep a tighter rein on how their ideas get used.

In opting to take the CMO route, High Tech High became part of a small but growing tribe of charter school pioneers who are trying to create not just one high-performing school, but whole systems of them from scratch.

At the moment, California is on the trend’s leading edge, but the organizations are cropping up elsewhere as supporters of the approach push to increase the odds that success stories like High Tech High can multiply.

Not everyone is welcoming CMOs with open arms. Because such outfits focus on replication, some critics see them as a threat to the charter sector’s role as an engine of ideas and a vehicle for grassroots empowerment. Others perceive them as taking a cookie-cutter approach that smacks of the dysfunctional bureaucracies that charter schools were designed to escape.

And even strong supporters of the approach acknowledge that the going has been slow.

“These are not easy things to build,” said Kim Smith, the chief executive officer of the NewSchools Venture Fund, a San Francisco-based philanthropy that has invested $26 million in CMOs since 1998. “They are very, very challenging.”


Still, despite the obstacles, supporters remain bullish that nonprofit CMOs can help solve some of the biggest problems bedeviling the nation’s public schools.

“They’re extremely important and valuable,” said Deborah J. Stipek, the dean of the school of education at Stanford University and the chairwoman of the board of Leadership Public Schools, a San Francisco-based CMO. “This is a very exciting adventure in education.”

The term CMO seems to have been coined by the NewSchools Venture Fund to distinguish the nonprofit groups from their for-profit cousins, educational management organizations, or EMOs, such as the New York City-based Edison Schools Inc.

NewSchools defines CMOs as “centrally managed systems of charter schools that leverage the values of alignment, accountability, autonomy, and economies of scale to deliver superior educational opportunities to the students they serve.”

The philanthropy now supports 11 CMOs as part of a push to expand the supply of high-quality charter schools, especially those serving disadvantaged students. Together, they serve 9,000 students in 35 schools, 28 of them in California.

Of those six California CMOs, 7-year-old Aspire Public Schools, based in the San Francisco Bay-area community of Redwood City, is the oldest and largest, with 11 schools this year, and four more set to open in the fall.

By filling some of the roles played by central offices for district run public schools, proponents say, CMOs can soften some of the pain of starting new schools and running them without outside support.

“I opened up the first start-up charter high school in the state, made some mistakes, learned from them, and now can use that experience to open up new schools,” said Mark Kushner, the founder of Leadership Charter High School in San Francisco and now the CEO of Leadership Public Schools. “A CMO can get very good at opening schools and sustaining them.”

That’s what Mr. Rosenstock and his colleagues are counting on as they aim to triple the family of schools run by High Tech High Learning, as their CMO is known, by the end of the decade.

Five years after opening High Tech High, they will run six schools here this fall on the grounds of a former naval training center, and a seventh one in Redwood City. Plans call for swelling to two dozen schools over the next five or six years.

Changing the World

Mr. Rosenstock said he and his colleagues started a CMO for four basic reasons.

First was to make a dent in the demand among families for their model, which stresses project-based learning, student internships, unusual demographic diversity, and a common, college-preparatory course of study with no ability grouping. This spring, 2,400 applicants vied for 400 slots in their San Diego middle and high schools.

“There’s so much demand out there, you make yourself sick not meeting it,” said Gary Jacobs, a San Diego businessman who co-founded High Tech High and chairs the CMO’s board of directors.

Another goal was to share back-office expenses without sacrificing the advantages of small size. “In front of the kids, it’s still a small school,” Mr. Rosenstock said.

“Positive pressure” from others to open more schools was a third factor, he said. The Bill & Melinda Gates Foundation has pushed for such expansion and given $10 million since 2000 to make it happen.

“The final reason,” he said, “is that we want to change the world.”

No one keeps track of how large a slice of the charter pie – now about 3,400 schools with 1 million students – is made up of CMOs.

But like High Tech High, most CMOs are counting on major growth if they are to survive on the administrative fees they charge. For High Tech High Learning, such fees amount to 8 percent for high schools at full enrollment, and 5 percent for middle schools.

Anticipating that growth, Ms. Smith of NewSchools speculates that CMOs could make up half of the charter sector 10 years from now.

NewSchools and other backers are looking to CMOs to improve the record of charter schooling, which has been marred by mixed results on student achievement and the meltdown of poorly managed schools and chains.

Supporters also see the CMO model as a laboratory to create, as Ms. Smith puts it, “a really great, aligned learning organization that’s running a system of schools” whose parts are all working together toward high achievement.

“There’s a lot that they have to do to realize that vision,” said Jim Shelton, the program director for education for the Seattle-based Gates Foundation, citing consistently strong student performance as “job one.” But if they succeed, he said, “CMOs have the potential to teach us what it means to do high achievement at scale, and in a variety of forms.”

Charter-management organizations typically provide educational leadership and an array of services ranging from payroll and recordkeeping to regulatory compliance and teacher credentialing.

To make that task easier, CMOs have so far focused on certain cities or regions, in contrast to such national, franchise-style nonprofit networks as the San Francisco-based Knowledge Is Power Program (KIPP) or the Providence, R.I.-based Big Picture Company.

One obvious plus of the regional approach is to reduce travel costs and logistical hassles. Another is to help educators master the intricacies of specific policy environments, which can vary dramatically.

“We stay in California because going to different states is like going to another country,” Mr. Kushner of Leadership Public Schools said.

Dealing with complex regulatory issues is one realm in which even some champions of stand-alone charter schools think the CMO model has advantages.

“I’m pretty skeptical about the whole notion of economies of scale in education organizations – with the exception of regulatory compliance,” said Eric Premack, the co-director of the Charter Schools Development Center, based in Sacramento, Calif. “Some of the goo is so complex that it can really gum up the works.”

Still, Mr. Premack is among those who question whether CMOs are the best response to that challenge, given “a very high need for agility and customization” in starting new schools.

Interesting Notion

Such skepticism is unsurprising, said Don Shalvey, Aspire’s co-founder and CEO.

“There is skepticism in this whole arena because it’s so undeveloped,” he said. “At best, we’re just an interesting notion at the moment.”

Still, he and others say they are striving to remain focused on schools, rather than their own central offices. Leading CMOs collaborate on common problems, ranging from staff training and facilities financing to political challenges and special education. As nonprofits, they say, they do not face the same constraints on sharing know-how as for-profit charter managers.

High Tech High, for example, broke new ground by winning approval from the state to certify its own teachers on campus. Mr. Shalvey has now begun pursuing his own teacher-credentialing options to add to a principal-training program, and is learning from Mr. Rosenstock’s experience.

Similarly, High Tech High has applied for California’s first statewide charter, which would let it run schools without authorization from local or county boards of education. If it succeeds, other CMOs are expected to follow suit.

In some ways, California was especially fertile soil for the CMO model. California law allows a single nonprofit organization to operate multiple schools, which is not the case everywhere. And per-pupil spending is low, making the state unfriendly to for-profit EMOs and hard on individual schools trying to afford on-staff expertise.

Yet California’s low funding levels also mean that CMOs here need more schools to break even than in higher-spending states.

So if other states remove regulatory obstacles, CMOs might actually thrive better elsewhere, supporters say, yielding more lessons for public education.

“CMOs are really about systems design: If you get a clean slate to build a system of schools, how would you build it and manage it?” Ms. Smith said. “What would you do like a traditional district, and what would you do differently? And what can we learn from that?”