Charter Management Organizations (CMOs): Why Doesn’t Minnesota Have More?

Last summer the 74, an education news nonprofit, published the book, The Founders, by Richard Whitmire. The book chronicles the history of charter management organizations (CMOs) and how they have brought “high-performing” chartered schools to scale throughout the country.

While some may question Whitmire’s narrow definition of high-performing (namely test scores), his book brings up a couple of questions about chartering for Minnesota: Why aren’t there more CMOs in the state? And, why do other states—Illinois, New York, Texas, and California—have a large number of them?

CMO Definition

According to the 2015 Bellwether Education Partners’ State of the Charter School Movement briefing book, CMOs are “nonprofit operators that operate more than four public charter schools.” Commonly known examples of CMOs are KIPP, Uncommon Schools, and Aspire. CMOs are responsible for a wide range of services that include, back office functions, hiring, professional development, data analysis, public relations, and advocacy, among others.

CMOs Nationally

The Bellwether briefing book revealed the large national reach of CMOs, which account for more than 10 percent of the US charter enrollment and 20 percent of total chartered schools in the country. Additionally, since 2009, enrollment in the highest performing, nationally recognized CMOs have grown twice as fast as the national charter sector rate (25 percent vs. 12 percent).

Outside CMOs in Minnesota: Why Aren’t There More?

CMOs, however, do not have a strong presence in Minnesota. According to the Minnesota Department of Education (MDE), the state does not have a definition for CMOs, so they do not have a list of which CMOs are in the state. However, from our research, we found that Minnesota has at least four outside CMOs: Athlos Academies; KIPP; Distinctive Schools; and Concept Schools. In total, these CMOs manage six schools that serve about 1,900 students.

Given the large presence of CMOs in other states, why doesn’t Minnesota, the originator of the national charter law, have more of them? In their 2015 CMO Survey, the National Alliance for Public Charter Schools (NAPCS) identified key attributes that high-performing CMOs look for when choosing a geographic area to start a school: large supply of high-quality teachers and leaders, startup funds, facilities, as well as flexibility with authorizing and governance structures.

In all four areas, Minnesota’s current state policies are not conducive to CMOs. The sections below explain more.

Large Supply of High-Quality Teachers and Leaders

According to the NAPCS results, three-quarters of CMOs surveyed indicated that a large supply of high-quality teachers and leaders was “essential to their [CMO] expansion into a new city or region.”

When asked about which pipelines CMOs see as reliable for high-quality teachers and leaders, the top response (68 percent) was Teach for America (TFA) alumni. According to one CMO leader, the presence of TFA in the market, and the number of alumni in the area, was a good proxy for the teacher pipeline.

In Minnesota, TFA has a small corps (45 members) and 655 TFA alumni reside in the region. However, TFA and the University of Minnesota recently decided to end their partnership, leaving TFA to find a new partner for licensure.

Facilities and Start-Up Funds

Another vital component for CMO expansion into a new region is access to facilities, with one CMO leader indicating that it would be hard to consider moving into a region where, “there’s isn’t a way to access existing facilities.” Minnesota does not currently have any policies that give chartered schools access to existing district facilities. Rather, the state’s chartered schools, particularly in the Twin Cities, often struggle to find adequate facilities.

CMO survey responses also stressed the importance of startup funds. CMOs can often secure philanthropic funds for startup funds, but having federal or state charter startup grants can make a certain region more compelling. While Minnesota has federal grants available for chartered schools, it does not offer state or any other type of start-up funding.

Flexibility with Authorizers and Board Governance

A majority of surveyed CMOs indicated that a “fair, flexible authorizing process was an important consideration in their expansion decision.” In particular, CMOs look for regions where policies allow for rapid expansion and high levels of autonomy for authorizers. This finding is backed by the Center on Reinventing Public Education’s (CRPE) 2012 report, which found that the growth of CMOs is concentrated in a handful of states where the charter laws offer moderate to high levels of autonomy for charter operators.

Minnesota’s policies around authorizing are stringent. In 2009, the Minnesota Legislature passed a law that tightened criterion for which organizations could become authorizers, implemented a regular state review process of all authorizers, and required authorizers to provide additional oversight of charter school governance, operations, and finance.

CMOs also look for autonomy with how they structure their board of directors in “whatever way makes sense to them”. According to NAPCS, “CMOs avoid board composition requirements” because they often create “unwieldy governance structures for CMOs.” Minnesota law around chartered school boards is quite prescriptive, including requirements for board representation and structure.

Homegrown CMOs

Even though Minnesota’s state policies may not be attractive to outside CMOs, Minnesota will soon have a couple of homegrown CMOs, by Bellwether definition. Hiawatha Academies will be a homegrown CMO when they open their fifth school in 2018 and, by 2025, the Harvest Network of Schools plans to operate eight schools.

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