The Friedman Foundation for Educational Choice

Advancing Milton and Rose D. Friedman's Vision of School Choice for All Children

Breaking Down "Sector Switchers: Why Catholic Schools Convert to Charters and What Happens Next"

mcshaneMichael Q. McShane
Posted: April 29, 2014

In 1979, there were 9,640 Catholic schools in the United States. By 2011, there were 6,841. That decline has been caused by a number of factors, each of which is worth exploring further—as are the policies that can contribute to their possible resurrection.

From 2001 to 2011, the number of private Catholic schools decreased at a rate more than three times (15.6 percent) that of the previous decade (4.6 percent). As a result, a trend among private Catholic schools has emerged in some cities: Catholic schools have, in effect, “switched” their status by dropping the religious component and becoming public charter schools.
 
In a recent study called "Sector Switchers: Why Catholic Schools Convert to Charters and What Happens Next," Andrew Kelly and I examined a set of schools that tried to get the best of both educational worlds by “converting” from Catholic schools to charter schools when their enrollment dipped below sustainable levels. From those schools, located in Washington D.C., Miami, and Indianapolis, we drew several lessons that have important implications for policymakers and school choice proponents.
 
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Five Reasons for Enrollment Decline in Catholic Schools

Private school enrollment has fluctuated over time for five reasons:
 
  1. Financial hardship for families amid a tumultuous economy makes affording private school tuition difficult.
  2. The shift from clergy educators to lay teachers has made school operations more expensive. That increased cost is reflected in tuition rates.
  3. Many of the private schools in urban centers are Catholic. A demographic shift in urban areas away from predominantly Catholic immigrant populations has affected demand.
  4. To keep tuition rates low, Catholic schools subsidize operation costs with contributions from parishioners. In recent decades, religious giving as a percentage of personal income has decreased from about 1.2 percent of personal income in 1963 to less than 0.9 percent of personal income in 2003. As giving declines, schools must make up for costs in other ways, often raising tuition rates, which inadvertently prices out many urban families.
  5. Increased competition from public charter schools.

Effects of “Switching” Sectors

Andrew and I found schools’ Catholic-to-charter conversion increased enrollment and the proportion of minority students served. In the seven years prior to when Catholic leaders decided to close and reopen their schools as charters, average enrollment dropped from 299 students to 153 students. After that switch, enrollment climbed to an average of 214 students in the first year and 242 students in the second year.
 
In addition, during the five years prior to conversion, the percentage of enrolled minority students fluctuated between 70 percent and 83 percent. In the first year after the switch to a charter, the percentage of minority students enrolled increased to 88 percent and, in year two, 93 percent.
 
Schools that decided to convert to charter schools did so based on a number of unique criteria, including percentage of non-Catholic students they already taught, whether the neighborhood had fewer Catholic families, and whether the school needed more resources and facility upgrades.
 
Some of those “switcher” schools remained largely the same, keeping principals and teachers, whereas some changed dramatically. Others offered wraparound religious services to its remaining Catholic families. In addition, switcher schools reported serving more children with special needs once going charter.
 
When those charter schools opened in former Catholic schools they also paid rent, which the archdioceses were able to use to support other Catholic schools. For example, in 2011, charter schools in Washington, D.C., paid $3.2 million in rent to the D.C. archdiocese, which distributed it to support local parishes in 2011—a substantial portion ($900,000 a year) went toward tuition assistance for students in remaining Catholic schools. 
 
Similarly, because of two switcher schools in Indianapolis, the $1 million of support the archdiocese provides as tuition assistance for Catholic schools now gets split among four schools now instead of six.
 
Comparable schools in our study that remained private Catholic reported seeing very few students leave the switcher schools to attend their Catholic school.
 
Policy Implications of “Sector Switchers”
 
“Switcher” schools’ increased enrollment and the proportion of minority students, tells us the substantive goals of the schools’ leaders were achieved. The schools survived, and, what’s better, expanded the number of students they were able to serve. Moreover, there is clearly pent up demand for the educational program Catholic schools, or Catholic-like schools, offer that is stymied by the barrier of tuition. When the barrier was removed and the schools (minus the explicitly religious elements) became available to all, more children, many of whom are minorities, flooded into them.
 
We also found strong evidence of institutional isomorphism—successful charter schools clearly imitating Catholic schools. Catholic schools have a respected brand. Schools that are able to mimic the key components of that brand are extremely attractive to families. If they are able to do so without requiring families to pay tuition, they can eat into a chunk of Catholic schools’ market share. As a result, Catholic schools need to examine in depth what makes them unique and how that resonates with potential students and their families.  
 
Finally, it is clear policy plays a big role in the construction of the school choice marketplace.  
 
Aggressive chartering policy drives away urban Catholic schools. If policymakers’ goal is simply to maximize the number of students in schools of choice, perhaps that isn’t a problem. If, however, one finds value in having a variety of options, and particularly religious options for families that desire them, this policy development is troubling. Private school choice programs, such as vouchers, tax-credit scholarships, and education savings accounts, can provide a private school “balance” to strong charter school laws. 
 
Notably, Catholic leaders in our report did not see this change as an issue of converting, or “switching.” As Beth Blaufus, president of a Washington, D.C., Catholic school, told Andrew and me, her school could never switch or convert to a charter school, as its Catholic identity is central to its mission. “It is not an element,” she said. “It is the reason we do what we do.”
 
How then could Catholic schools have avoided closing during a socioeconomic shift in their communities? Several school leaders said if a private school choice program with strong funding existed in their states, more families who already desire their school would be able to afford tuition—increasing enrollment and resources to serve them while maintaining their Catholic identity.

 
ABOUT THE AUTHOR
is a research fellow in education policy studies at the American Enterprise Institute.


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