A Changing Landscape: Five Trends to Watch in Charter School Philanthropy

A charter school classroom in Gastonia, NC. Billy E. Barnes/shutterstock

Last week, Inside Philanthropy published an in-depth look at philanthropy and charter schools that examined how far this movement has come and where some of its prominent backers see themselves heading next. The article revealed that private support for charter schools is at an inflection point. While some of the movement’s top backers are digging in and preparing for the next phase of their work with the schools, others have taken a step back from charters or substantially lowered their expectations that this innovation will drive larger changes in K-12 systems.

Meanwhile, some of the biggest new philanthropists coming to education lately have focused on other strategies to improve student outcomes, such as personalized learning. Those new funders seem a lot less interested in old rivalries between charter and district schools than their predecessors.

Despite these shifts in education funding priorities, though, major private support for charter schools will continue to flow, and charters will remain an important part of the K-12 landscape, especially in urban areas. Given this prominent role, we thought it would be useful to look at key emerging trends that could affect the charter movement down the line. We’ve identified these trends based on our reporting for the recent story on the charter movement and other education coverage.

1. Growing Opposition

High-profile teacher strikes in Los Angeles and a mayoral election in Chicago that’s favored candidates dismissing charter expansion are the latest indicators that the charter movement is facing opposition in several major cities. The national political climate has also shifted in ways unfriendly to charters, as the Democratic Party has moved left and leading candidates have criticized the influence of billionaires.

What’s less clear is how this trend will affect funding for charters. Julie Maier, the chief operating officer at the Charter School Growth Fund, says that she’s observed no change in enthusiasm from the foundations and individuals that support the fund in response to the news coming out of Los Angeles and other cities.

So far, even supporters stepping away from the movement, like Broad Foundation board member Andy Stern, maintain that backlash isn’t at the root of their cooling attitudes toward charter schools.

However, the opposition to charter school expansion is worth keeping an eye on. It could deter some donors coming to education philanthropy from backing a cause that’s seen as controversial and polarizing. Support for charters is holding, but will the fall-out from today’s skirmishes show up in giving patterns tomorrow?

2. A Splintering Movement

Although recent headlines may not have swayed funders, former charter movement backers may be stepping away for other reasons. Andy Stern, the former head of SEIU and a Broad Foundation board member, believes many within the movement are satisfied with the high-performing schools that came out of their efforts, but disappointed in the failure to catalyze system-wide change. Stern says he and others like him are looking for the next innovation

It’s also useful to remember that while it’s easy to paint the charter movement with broad strokes, stakeholders and foundations backing charter schools do so for different reasons. Though the movement’s members may share a common cause, they may differ ideologically.

Stern, for example, has little patience for the rhetoric around school choice, saying a choice without results is a bad choice. For others, a family’s autonomy over their child’s education is at the core of what they’ve tried to accomplish with charter schools.

The prominence of Secretary of Education Betsy DeVos—a longtime backer of conservative approaches to choice, including school vouchers—has exacerbated divisions in the K-12 reform community. (Eli Broad opposed her nomination, for example.)

One indication of how this divisive climate is playing out in the funding world comes from a recent benchmark report released by Grantmakers for Education, which found that education funders expressed growing distaste for the rhetoric around school choice. The survey only provides a snapshot of the field, but funders that responded expressed concerns around the emphasis on school choice coming from the top of the federal government, and they fear it could pave the way for the privatization of public education. That same report showed support for charter schools holding steady, but some warning signs indicate that could change.

3. Scaling Challenges

Although charter enrollment has grown by millions since the schools first started decades ago, they still serve a relatively small portion of students. About 3.2 million students in the United States attend charter schools out of the nearly 51 million kids enrolled in public schools in the fall of 2018. That means about 6 percent of public schools students end up in charter schools—although this percentage is dramatically higher in many urban school districts.

Supporters point to long wait lists for existing schools as proof of demand for more charters and estimate demand is high enough to fill charter school enrollments several times over. However, efforts to meet those demands have been stymied by the costs and effort associated with building new schools.

Building new schools from scratch is difficult. New schools have to recruit staff, teachers and students. For charter schools, that comes with the added cost of finding and securing facilities, which the district provides for public district schools.

Within the last year, philanthropists have worked to target start-up costs, which they see as a barrier to charter school growth. The Walton Family Foundation set up two nonprofit lending funds last year to give charter school leaders access to capital. We’ve also reported on other impact investing efforts in the charter space, a trend that could eventually offer a huge boost for charter expansion.

However, the reality on the ground is that charter schools enroll a small portion of students, especially when compared to district schools. The millions of dollars that philanthropists pour into the charter movement fund a relatively small number of students. In effect, giving to these schools has turned out to be more akin to backing direct services than pursuing the larger systemic change that many donors strive for.

4. Competition from New Ideas

Social and emotional learning, early childhood education, family engagement, personalized learning—the education space is awash with new ideas and some not-so-new ideas enjoying renewed popularity.

Emerging research and innovations have accelerated a pendulum shift away from the education philanthropy of the last decade, with a proliferation of new ideas within the education space now competing for attention and dollars. How will charter schools fare in an environment where they’re not the newest innovation on the block?

There are some signs that charter schools could just absorb many of these new approaches, which can be implemented in any classroom, whether district or charter. In some cases, such as with personalized learning, charter schools have been key partners in piloting new approaches and technologies. Maier, from the Charter School Growth Fund, said that whole-child development and social and emotional learning are among the top priorities for the foundations and donors working with the fund.

On the one hand, perceptions about the relative flexibility charter schools enjoy when it comes to implementing new models or curriculum could work in their favor. On the other hand, if the new practices can succeed anywhere, funders may want to send their money where it will affect the most kids. That sort of thinking would benefit district schools.

5. The New Wave of Education Funders

When Jeffrey Snyder, an assistant professor at Cleveland State University’s Levin College of Urban Affairs, took a look at the philanthropic dollars flowing into the charter space in the 2000s, he noticed an interesting divide.

The newer foundations, which at the time were funders like the Bill and Melinda Gates Foundation and the Laura and John Arnold Foundation, were more likely to be early funders of the charter movement than legacy foundations like the Carnegie Corporation of New York. Older foundations eventually got in on funding charter schools too, but they never kept up with the growing support from newer institutions.

Now the foundations that started in the 2000s no longer seem so new, and a new wave of funders has burst onto the scene. It poses an interesting question. If the foundations that launched in the 2000s looked different when it came to education funding than the institutions that came before, how might this new generation of funders’ interests and priorities look different from their predecessors’?

For Snyder, it’s too early to tell from a quantitative perspective. Anecdotally, though, it seems like newer philanthropists are more agnostic when it comes to the charter-district divide. They seem to be a lot more focused on ideas and instructional approaches like personalized learning or social and emotional learning, and a lot less interested in larger ideological battles over education. They tend to fund both charter and district schools, but it’s often in the service of scaling or spreading an approach to education, rather than a school or network.

Take the Chan Zuckerberg Initiative, for instance. The outfit has worked with both charter and traditional public schools. One of its high-profile projects, though, was in partnership with Summit Public Schools to make Summit Learning, a free, online platform designed for personalized learning, more widely available.

While that work involved a partnership between CZI and a charter network, it’s starkly different from the work coming out of places like the Walton Family Foundation, which is more likely to focus on scaling and growing the schools themselves.