"All charter schools are not-for-profit."

Bob Cortes on Tuesday, April 18th, 2017 in a discussion on HB 7101

Are all Florida charter schools not-for-profit?

Florida House Speaker Richard Corcoran, R-Land O'Lakes, explains why the House wants to invest $200 million to bring in high-performing charter schools March 31, 2017.

Florida lawmakers who support the expansion of charter schools have adopted a single talking point to explain how the schools are managed.

Rep. Bob Cortes, R-Altamonte Springs, faced a series of questions from Rep. David Richardson, D-Miami Beach, after introducing HB 7101, one of several measures under consideration in the legislative session that would increase access to charter schools.

Like public schools, charter schools receive state funds. The key difference is they are privately managed.

Richardson was curious about the bill’s provision that specifies that a charter school operator may use assets of their charter school for K-12 educational purposes in "other schools."

"These other schools, would they also have to be a not-for-profit or could they be a for-profit?" Richardson asked.

Cortes said, "They would have to be a school within their own network. So part of the charter school system itself."

"So does that mean the other schools would have to be a 501(c)(3)?" Richardson asked.

"All charter schools are not-for-profit," Cortes said.

Cortes’ bill passed in the House by an 81-39 vote.

The same argument resurfaced in debate of "schools of hope" legislation that would create a $200 million fund to lure charter schools to under-performing districts. Rep. Manny Diaz Jr., R-Hialeah, said, "Under Florida state statute, a charter school is a non-profit organization, so there is no such thing in Florida as a for-profit charter school."

The statements jumped out to us because there have been problems with charter schools being used to benefit people privately.

Florida law technically requires charter schools to be nonprofits. But the system is largely run by for-profit companies, which Cortes' statement leaves out.

Not-for-profit, or not?

The charter-school solution was originally touted as a way to give families — particular those in low-income areas — another option for schooling. Critics say too many taxpayer dollars have been shifted to the private companies that run charter schools to the detriment of traditional public schools.

So, are all charter schools in Florida not-for-profit? Technically speaking, a not-for-profit is a type of organization that does not earn profits for its owners. 

Cortes cited a provision of a Florida statute (1002.33 sec 12(i)) as evidence of this claim, which mandates that a charter must organize as, or be operated by, a nonprofit organization.

The Florida Department of Education echoed Cortes’ evidence.

Audrey Walden, the agency’s press secretary, said the defining document that sets the academic, financial and organizational performance benchmarks for a charter school is determined by the local school district and the nonprofit charter school board.

The charter governing board can choose to enter into contracts with private entities to provide services and support.

"But, ultimately, performance and accountability rests with the nonprofit governing board -- which, when it enters into a charter agreement with its local school district, is subject to the same Sunshine Laws and School Accountability System that pertains to all public schools in Florida," she said.

More to the story

Not all charter schools operate in the same way. And sometimes nonprofit charter governing boards enter into contract with for-profit companies. The management company does not manage the governing board, but rather it handles certain aspects of the operations of the school under a contract with the governing board. 

The Miami Herald’s examination of South Florida’s charter school industry found several instances of for-profit management companies controlling charter schools’ day-to-day operations.  

The Herald found examples of charter schools relinquishing total control of their staff and finances to for-profit management companies. In Miami-Dade County, the Life Skills Center paid 97 percent of its income to cover fees incurred by a management company.

Then, the governing board of two affiliated schools tried to "eject" the management company’s managers. As a result, the management company withheld money from the school and threatened to press charges against people within the school from trying to get it back.

The Herald also found that some owners of the management companies also control the land and buildings used by the charter school. Owners of Academica Corp., the state’s largest charter school management company based in South Miami, collected almost $19 million a year in lease payments on school properties.

In other cases, it found that the school’s nonprofit board were full of people with ties to the for-profit management companies. 

This trend continues across the nation. ProPublica reported that several charter schools around the country funneled all of their revenue to a for-profit company hired for day-to-day operations including schools in New York and Ohio.

A spokesman for the state's largest teachers union, the Florida Education Association, sent us a report that summarized the agency’s arguments against "schools of hope" legislation. The FEA isn’t completely against charter schools, but its website says, "While some charters adhere to the original idea, and have shown some success, many charters have become for-profit drivers for large corporations bent on taking over our public schools."

Our ruling

Cortes said that all charter schools are not-for-profit.

A Florida provision requires charter schools to be operated or controlled by a nonprofit organization. This technical talking point omits that many nonprofit charter school boards enter in to contracts with for-profit companies. Some for-profit charter school management companies have drawn increasing scrutiny over the years for how they’ve controlled the school’s money.

This statement leaves out important details, so we rate it Half True.

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"All charter schools are not-for-profit."
in a discussion on HB7101
Tuesday, April 18, 2017