For Profit Charter Management Companies: What is the Future?

Much has been written about for profit charter management companies. Many, of which I am one, have written about the potential for large profits, not only at the expense of the taxpayer, but also at the expense of the charter school itself.

Often charter management companies don't charge for specific services, but charge a general percentage of revenue. Charters often have no idea what the services they receive actually cost.

In a different twist, a Pennsylvania charter school is fighting to protect records of expenses paid to its management company and the management company's owner. Why is it that a school's expenses are subject to public records searches, but a management company that charges 10% to 14% doesn't have to simply because it is a for profit company. Well, the courts in Pennsylvania have now held that because a management company serves a function that ordinarily would be filled by public employees, it must give up its records. In the same way that for profit management companies have profited from public funds, they now have had the table turned on them. If this decision holds up, then for profit management companies may begin to be held to the same standards as non-profits and governmental entities.

Given the inherent issues with a for-profit company managing a non-profit company as well as a governmental entity, perhaps this level of scrutiny is appropriate. This puts management companies on an even par with internal management.