Where Most Needed

The excitement of the charity sector is that while one part of the sector may be considering merger and consolidation, another may be characterized by numerous start-up organizations.  Yesterday we talked about mergers in social services and community foundations.  Today, it's start ups in charter schools.

Out of New Orleans, the Times Picayune paints a flattering portrait of New Schools for New Orleans, a group so new it doesn't have a Form 990 online.  We are told that the six employees of this organization will be supporting numerous charter schools that have sprung up in the chaos after Katrina.  The New Orleans Parish School District has decided to charter all but four of its schools.  In the year just ending about 12,000 students attend 25 public schools.  In September, 22,000 students are expected in 30 schools.  Expectations are very high for a start-up helping other start-ups. 

A fascinating backstory:  the head of the group is Sarah Usdin, formerly of the New Teacher Project (EIN 13-3850158 Form 990) out of New York.  (Do we have enough "new"s in this story?)  Last summer, before Katrina, the local school board had dropped its contract with NTP to recruit teachers, since the city was already facing the possibility of large deficits and teacher layoffs.  So Katrina was a disaster on top of a disaster already in progress, as far as the schools are concerned. 

A different picture comes out of Utah, where the Salt Lake Tribune reports on conflict of interest concerns with state legislators who also provide charter school development, construction, and management services.  Rep. James Ferrin, R-Orem, runs US Charter Management, a for-profit firm that provides services to charter schools.  Rep. Ferrin co-sponsored legislation that removed a cap on charter school applications in 2005, leading to a flood of applications across the state (the cap has been reinstituted).  Other legislators are involved with US Charter Management and other firms like Academica West and Excel Education Group. 

Procurement has been an area of potential abuse.  Public schools are required to go through a bidding process to construct schools.  For charters, the common scenario is for a charter applicant to enter a pre-lease agreement with a contractor, without bidding.  Then the contractor builds the schools if the charter is granted.  The lease on the schools is then paid with public funds. 

In many ways, the management/development companies appear to be driving the process, advising the charter groups on construction and gaining zoning clearance.  Some raise concerns that the charter groups themselves may not be ready for the rapid development.