What Are Private School Management Organizations?

My colleagues and I came across private school management organizations (PSMOs) in the course of our research for a Friedman Foundation for Educational Choice report, “The Chartered Course,” in 2013.

Back then, we sought to understand what private school choice could learn from the charter school sector. But what we discovered is that private schools had already begun to borrow one of the charter movement’s most compelling components: school networks.

During the past 20 years, charter networks—charter management organizations (CMOs) and education management organizations (EMOs)—have driven much of the growth of the charter sector. CMOs and EMOs now operate one out of three charter schools in the country.

So are private school management organizations just like CMOs for private schools? The short answer is: sort of. In a new follow-up report for the Friedman Foundation, Private School Pioneers: Studying the Emerging Field of Private School Management Organizations, we delve deeper into these fledgling organizations’ practices to better define and categorize them for future study.

Like CMOs, PSMOs seek the benefits of a network, including a central office that can offload non-instructional tasks from school staff, coordinate fundraising strategies, and evaluate data and school quality across campuses.

Unlike CMOs, PSMOs operate in environments with very different regulatory and financial constraints. They enjoy more autonomies than charter schools but significantly less (if any) public funding.

Private school management organizations also operate in a sector with a history that is centuries rather than decades old. When Pope Francis came to the United States earlier this fall, he visited Our Lady Queen of Angels School, more than 120 years old and part of Partnership Schools, a PSMO in New York City. PSMOs with this kind of history have potential advantages in accumulated social capital but must also contend with long-held traditions and deeply rooted practices.

Whether their schools are long established or new on the scene, some leaders in the private sector have adapted the CMO model to their own diverse needs, yielding a set of 14 organizations:

After studying those organizations and interviewing many of their leaders, we found they serve similar functions generally, but vary along five key dimensions:

1. Whether they operate new or existing schools
2. Whether growth is aimed at the financial sustainability of existing schools or increasing their footprint
3. The primary source of their funding (tuition, philanthropy, or public dollars)
4. Their degree of independence from religious institutions
5. Their degree of academic and operational centralization

In turn, our team used those five characteristics to categorize PSMOs into three general types, which we think will help the field better understand the similarities and differences among them.

• Redemptive PSMOs generally operate existing schools, prioritize financial sustainability, are either church-operated or church-affiliated, and tend to be operationally centralized but academically decentralized. Examples include the Faith in the Future Foundation in Philadelphia, Jubilee Schools in Memphis, and Catholic Partnership Schools in Camden.

• Expansion PSMOs usually operate new schools, seek to grow the number of high-quality seats available to students, are either church-affiliated or fully independent from a religious institution, and are generally both academically and operationally centralized. Examples include Hope Christian Schools in Wisconsin and The Oaks Academy in Indianapolis.

• Hybrid PSMOs share some similarities with both Redemptive and Expansion PSMOs but have distinctly innovative elements to their models. Examples include the Cristo Rey Network and the Notre Dame ACE Academies.

With a better understanding of what private school management organizations are, we hope policymakers, philanthropists, practitioners, and other education leaders will be better positioned to study and support this emerging field, which cumulatively serves about 142,000 students.

In Private School Pioneers, we also make a series of recommendations, including:

1. Current and future PSMO leaders should ensure that legal agreements with religious institutions are exceptionally clear about the delegation of authority. They should also carefully consider academic centralization by taking into account the potential value of school-based decision-making.

2. Although they should assess PSMO quality and potential before investing, philanthropists should not recoil from providing operating funds to these organizations. Sustaining private schools could be a valuable complement to launching new schooling options in other sectors.

3. Advocates and policymakers should ensure that new-start PSMO schools are able to immediately participate in public programs, and that those public programs provide adequate funding.

4. Leaders across the field should stay mindful that PSMOs are still too new for industry standards. Many are in a stage of experimentation and are uniquely equipped for it. Policymakers and sector leaders should protect PSMO’s space to innovate.

We also surfaced a number of lingering questions in the course of our research. Here are a few that we think are ripe for further study:

• Do PSMOs deliver on student outcomes? Do some PSMOs perform better than others? The research on the academic outcomes of PSMOs is virtually non-existent. Many PSMOs we studied have encouraging anecdotal data on student learning, but there has not yet been independent, rigorous analysis.

• How do PSMOs navigate and negotiate agreements with religious institutions? Are there some arrangements that work better than others and, if so, why?

• Are PSMOs taking full advantage of the autonomies they enjoy as private schools? What innovations are happening in PSMOs that would not be possible in the public sector, and why aren’t they possible?

• How do new-entrant micro-schools (for example, Alt Schools and Acton Academy) fit into the field of PSMOs? Is there potential for these schools to lower costs and serve particularly disadvantaged populations?

Ultimately, PSMOs make up less than 1 percent of the nation’s private school enrollment, which makes up just 9 percent of the school-aged population in the United States. But social entrepreneurs, practitioners, policymakers, advocates, philanthropists, and others should take note. They can help create an environment where PSMOs are able to demonstrate proof of concept, expand, and evolve to help meet students’ and families’ need for high-quality school options.

For more detailed analysis of private school management organizations, visit our Private School Pioneers page, and download the full report.

Read more information from the study’s authors on the Ahead of the Heard blog from Bellwether Education Partners here and here.