School Choice & Charters Explainer

What Are Charter Schools?

By Arianna Prothero — August 09, 2018 9 min read
Students arrive for classes at Alliance Collins Family College-Ready High School, a public charter school in Huntington Park, Calif.
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Are charter schools public or private? Do they pick and choose who can enroll? Who oversees them? And are they better at educating students than regular public schools? We answer these questions and more about charter schools in this explainer.

What Are Charter Schools? How Do They Work?

A charter school is a tuition-free school of choice that is publicly funded but independently run. Conceived over 25 years ago in Minnesota as a means to loosen red tape around public schools and free up educators to innovate, charters have since grown into a national movement that spans 44 states plus the District of Columbia, and includes around 7,000 schools and 3 million students, according to federal figures.

In exchange for exemptions from many of the state laws and regulations that govern traditional public schools, charters are bound to the terms of a contract, or “charter,” that lays out a school’s mission, academic goals, fiscal guidelines, and accountability requirements. On the other side of a charter contract is an authorizer—such as a state agency, a university, or a school district, depending on the state—that has the power to shut down charter schools that do not meet the terms of their contracts.

This arrangement is what charter school advocates refer to as the “charter bargain”: more freedom for more accountability. The regulations that charters avoid, or how the schools are funded depends on each state’s law.

Charter schools do not draw students from an assigned area; families choose to send their children to them. If demand for enrollment in a charter school exceeds space, students are usually picked by a random lottery.

Charter schools educate only a small share of the nation’s public-school students–about 6 percent. But in 19 cities, the market share of charter schools has ballooned to more than 30 percent, according to the National Alliance for Public Charter Schools.

As the first credible competition to the traditional system of public schooling—and a direct competitor for tight resources—charter schools are the source of ongoing controversy and debate.

Who Runs Charter Schools?

On a day-to-day, operational level, a charter school is run by a school leader or principal and overseen by an appointed board—much like a local charity would be. Unlike many traditional public schools, charters are not overseen directly by an elected school board, although there is a caveat to that last statement which we will explain in a moment.

At the macro level, charter schools are overseen by an authorizer, the entities granted power under state law to approve new charter schools and shutter failing ones. In general, there are six types of authorizers, according to the National Association of Charter School Authorizers: independent chartering boards, state education agencies, higher education institutions, non-educational government entities such as a mayor’s office, nonprofit organizations, and local education agencies or school districts.

While the majority of charter schools in the country are single campus schools, a growing share of charter schools are run by larger management organizations. Also called networks, these groups function similarly to school districts.

Are Charter Schools Non-Profit?

Many of the best-known charter school networks, such as KIPP and Success Academy, are run by nonprofit charter management organizations, or CMOs. Some states also allow for-profit companies, generally called education management organizations—or EMOs—to run charter schools.

This is where the profit status of a charter school can get confusing: Although the schools themselves are not-for-profit, they may contract with a for-profit company to manage some or much of the school. This could include hiring teachers, providing school facilities, developing curricula, and setting school policies.

How Are Charter Schools Funded?

Generally speaking, charters receive state and local money based on the number of students they enroll, as well as money from the federal government to provide special education services, just like traditional district schools. The federal government also gives grants to expand charter schools. Most states do not allocate funds for charter school facilities.

Charter schools—like district and private schools—can also raise additional funds through private donations. Philanthropy has been a major force in the expansion of charter schools in urban areas serving low-income students—in particular the college-prep, “no-excuse” charter school models. Some of the country’s richest individuals have invested heavily in the charter movement both within their home states and nationally, including the heirs of Sam Walton, the founder of Walmart, and Don and Doris Fischer, the founders of the Gap, Bill and Melinda Gates, Eli and Edythe Broad, Netflix founder Reed Hastings, former New York City mayor Michael Bloomberg, and U.S. Secretary of Education Betsy DeVos.

Charter Schools: Are They Public or Private?

That question is the source of a lot of debate and peoples’ answers hinge largely on which features one believes define a public school. Is it an elected school board? Is it public funding? Is it open admissions—the requirement that a school takes all students who come to its doors? By those three standards, charter schools, assuming they are following the law, fall short on the first one if they were not authorized by a school district or elected state board. Charters would generally meet the second two.

But allow us to muddy the water: Not all school districts are run by elected boards. There are a growing number of states that funnel tax dollars to private schools—via vouchers, tax-credits, and education savings accounts—and while these private schools receive tax dollars and come under more regulation, they are still not considered public schools. And then there are magnet schools—traditional district schools—that have special admissions policies allowing them to pick and choose students.

Ultimately, where charter schools land on the public-private spectrum depends on the state law and who you ask. However, charters are generally viewed under state laws as public schools whose students are required to take all the same assessments as those who attend traditional district schools.

Pros and Cons of Charter Schools

With their relative autonomy, charter schools are touted as a way to spur school and classroom innovations and to provide parents with more public-school choices. With more educational options, schools are forced to compete to attract and retain students which leads all schools to improve, school choice advocates say. Innovative school models are another draw for parents and students. Charters frequently take alternative curricular approaches or emphasize particular fields of study, such as the arts or technology, or set out to serve special populations of students such as special education or at-risk students. A growing number of virtual or cyber charter schools have also challenged the idea that a school must be a physical, brick-and-mortar building.

See Also

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But while charter schools’ independence can be a source of their appeal, it can also lead to problems, ranging from financial mismanagement to nepotism. And in the face of strong pushback from parents, authorizers can be hesitant to shutter a charter school, even when a school is suffering from serious and long-running financial and academic issues.

Headline-generating charter scandals have driven some charter school advocates to push for more regulation and a more-managed market approach to school choice. But plenty of charter advocates remain staunch in their support for a purer, free-market approach.

Among the other common criticisms of charter schools? Those who oppose them argue that they divert vital resources from cash-strapped school districts, they educate proportionately fewer students with disabilities, they cherry pick students, they rely on punitive discipline practices, and they are more racially segregated than their traditional public school counterparts.

Charter School Effectiveness: What the Research Says

The question of whether charters or traditional public schools do a better job of educating students is hardly settled—in part due to the complexities in designing studies that can fairly compare district and charter school students and the variability in quality among states, school models, and individual schools.

One highly-regarded group of studies (although certainly not without critics) from Stanford University’s Center for Research on Educational Outcomes, or CREDO, illustrates this point.

A national CREDO study in 2009 found that charter school students lagged behind their regular public school counterparts in math and reading gains. In 2013, CREDO found that, nationally, charter schools slightly outperformed district schools in reading and that the two sectors performed equally in math.

But a look at only charter schools in urban areas nationally in 2015 found that urban charter schools significantly outpaced their district peers in both math and reading.

However, those findings are tempered by another 2015 CREDO analysis that found full-time virtual charter schools, where students do all or most of their coursework on a computer at home, made dramatically less academic progress than their peers in traditional schools.

A 2017 study, also from CREDO, found that students in charter schools managed by for-profit companies performed markedly worse compared to their peers in charters run by nonprofit groups.

Some highly cited meta-analyses of charter school research further underscore the mixed findings from the CREDO studies.

A 2014 meta-analysis on charter schools conducted by economists from the University of California, San Diego, found that charter schools are “producing higher academic gains in math,” compared to their district school counterparts.

A 2018 examination of recent charter school research, including several studies from CREDO, found a mixed bag of outcomes in general and for students who are English-language learners in particular. However, the researchers from Clemson University and the University of Alabama at Birmingham found that students with disabilities, in general, did better academically in charter schools than in district schools—although students in both sectors do worse than their non-disabled peers.

But academic results are not the only measure of how well a school is educating students, and there is a growing body of work looking at how charter-educated students fare beyond high school.

Two studies released in 2016 looked at how much charter graduates earn compared to their district-educated peers and found opposite results.

Researchers at Georgia State University, Vanderbilt University, and Mathematica Policy Research looked at charter school students in Florida and found that, yes, they do go on to earn significantly higher salaries than their noncharter peers.

But an examination of charter school students in Texas by researchers from Harvard University and Princeton University found the opposite: Charter school students had lower future earnings.

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How to Cite This Article
Prothero, Arianna. (2018, August 9). Charter Schools. Education Week. Retrieved Month Day, Year from

A previous version of this article was published with the title, “Charter Schools: 7 Common Questions, Answered.”

Coverage of how parents work with educators, community leaders and policymakers to make informed decisions about their children’s education is supported by a grant from the Walton Family Foundation, at Education Week retains sole editorial control over the content of this coverage.


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