In 1997, the Ohio legislature passed a law allowing charter schools to be an alternative to public and private school. By 2008-9 there were 332 charter schools, mostly in the urban centers. But Ohio has loosely regulated their charter schools and that has damaged their quality. With the election of Governor Ted Strickland in 2006, efforts have begun to improve the quality of charter schools.

In 2010, Policy Matters, a non-profit policy research organization in Ohio, published a paper, Public Good vs. Private Profit: Imagine Schools, Inc., in Ohio, detailing research they had conducted on Ohio charter schools. Their research centered around Imagine Schools, Inc., the largest for-profit charter operator in the US.  Imagine’s website listed 71 schools in 11 states and the District of Columbia. Approximately one third of Ohio’s charter schools are run by for-profit education management organizations (EMOs) and Imagine operates 11 schools in Ohio. From 2004 to 2009, Imagine Schools, Inc., received $115.7 million from state and federal funding to run the charter schools in Ohio.

The Policy Matters research has four findings and five recommendations included in their research.

The four findings are:

Low academic performance: Of the eleven schools operated by Imagine, none have performed above Academic Watch, which is the equivalent of a “D” grade in the state’s school evaluation. Five of the six rated schools received an “F” for the 2008-9 school year.

Weak oversight and conflicts of interest: The Ohio Department of Education depends on a sponsor for each charter school to perform oversight of the school. The sponsors are responsible for making sure a school complies with the Ohio Revised Code, monitors and evaluate schools’ academic and fiscal performance, and generally provides other technical advice as needed. The sponsor for seven schools operated by Imagine Schools, St. Aloysius, contracts its sponsorship to Charter School Specialists (CSS). CSS already provides fiscal services for Imagine, Schools which could be a conflict of interest.

Real estate deals require scrutiny: Imagine Schools, Inc. utilizes the services of Schoolhouse Finance to handle its real estate activities. Some of the deals have ended up with high rent which increased the cost of school to the students. As the report points out, “The Imagine subsidiary (Schoolhouse Finance) sold five of the properties to real estate investment trusts (REITs), then leased the properties back from the REITs and continued renting them to its schools, allowing opportunities for profit both at resale and as it collects rent.”

Large schools and low salaries: Compared with other charter schools, Imagine’s schools have twice the median student population. Additionally, the teachers are paid considerably less than other charter school teachers.

the five recommendations are:

Additionally, the writers of the report ask that Imagine Schools be investigated by state regulators and the state attorney general to concerning “the elaborate real estate transactions, management, development and other fees and mechanisms employed by Imagine Schools, Inc., and other management companies to assure that public monies are being appropriately spent on the education of children.”

In the debate over charter schools vs. public schools it seems that charter schools operated by for-profit management companies have a wider range of unknown challenges

Source: Public Good Vs. Private Profit: Imagine Schools Inc. in Ohio