Charter Schools

Grade Level: 
6, 7, 8, 9, 10, 11, 12
Public Purpose
School Community
Charter schools are publicly-funded schools privately run by universities, governments, or other organizations. Each school is managed by a unique charter with varying rules from state to state.

by Monica Bopp


Charter Schools are non-religious, publicly-funded schools privately run by various universities, local governments, or other organizations. The oversight and management of operations, budgets, curricula, and student outcomes is managed by each unique charter and varies from state to state. Enrollment space at each school is assigned to students first come, first served or through a lottery application process if necessary. Each charter school receives public monies based on student enrollment or average daily attendance, although this may be only a percentage of the full amount normally allowed per student for traditional public school. In these cases, donors and grant makers can fill the gaps for facility costs and such.

Since charter schools are public, they must follow guidelines similar to traditional public schools such as the provision of a free public education, open enrollment, and implementation of state and federal assessments. On the other hand, charter schools experience some freedom from regulations related to staff, budgetary items, and what is taught. Reviews by each state’s unique charter authorizer are completed about every 3-5 years, making it possible to continue or discontinue charters. Inconsistencies in regulatory agencies and the relatively short 25-year existence of charter schools makes it challenging to compare traditional public schools to public charter schools locally or nationally.

State by state approval of new charters varies as well, in addition to whom manages charters. School district leaders, colleges, or other local or state boards may authorize charters, dependent upon the state. Nonprofit charter management organizations (CMOs), run 26% or 1,820 American charter schools, while about 15% or 995 are managed by for-profit EMOs, and 59% or 4,010 are independently run as of the 2015/16 school year.


Historic Roots

The term “charter” in relation to schools arose in the 1970s when the idea was suggested by University of Massachusetts education professor, Ray Budde. The movement is rooted in several education reforms ranging from magnet schools, site-based management, choice, privatization, and empowerment for community/parents (National Center for Education Statistics). In Philadelphia, schools within schools began in the late 80s and were referred to as “charters.” Soon, Minnesota followed the trend in 1991, passing a first of its kind charter school law led by Ted Kolderie. The next year, California joined the movement. Nineteen different state charters had been created by 1995, totaling 40 states, Puerto Rico, and DC by 2003.

Due to its relatively quick rise and general support from political leaders, charters became a widespread educational priority. From President Clinton calling for 3,000 new charter schools by 2002 to President Bush requesting $200 million in support of charters plus an additional $100 million in 2002 to aid in charter facility development, this relatively new idea has continued to increase in importance. In addition to political leaders leading the charter school movement, in 2005 a natural disaster, Hurricane Katrina, and its 10-year aftermath left a 100% charter school system in its wake in New Orleans. Much of Detroit’s school system has also joined the for-profit charter networks following its economic downfall within the last 20 years, with varying degrees of successes and failures. Within a 10-year time frame, from the 2003/04 school year to the 2013/14 school year, public charter schools increased from 3.1% of the total of all public schools to 6.6% of the total, from 3,000 to 6,500 charter schools (National Center for Education Statistics). While Mississippi and Washington both passed charter laws prior to 2013, both states had their charters reissued in 2013. Mississippi has only one operational charter school as of this school year while Washington proposes to have 8 operating charter schools by the 2016/17 school year and 3 additional ones the following year. Only 8 states have yet to pass charter school legislation: Alabama, Kentucky, Montana, Nebraska, North Dakota, South Dakota, Vermont, and West Virginia.



Since the first charter schools opened in Philadelphia in the late 80s, to charter schools’ rather current recognition by President Obama and Secretary of Education Arne Duncan, charters have gained more acceptance and popularity year after year. This growth can be viewed as opportunities for education reformers to fulfill what is lacking in traditional public schools or as competition for traditional public schools to increase their educational value proposition. To some this may translate positively, others may view it negatively, dependent upon one’s viewpoint and/or experience. Either way, charter schools have found a place within our country’s education system and are likely not going away.

2014/15 saw a 14% rise in charter school enrollment and added over 6,700 new charters that year alone across the US. According to current statistics, 404 new charter schools opened just this past school year, while 272 had shuttered their operations. Despite these closings, still more than 250,000 new students were added into charter school rolls, totaling 2,930,600 children across the US (Issue Lab). As the total number of charter schools has reached 6,824, its student count closes in on 3 million.

As of the 2015/16 school year, California had the most charter schools at 1,234 and the greatest number of students enrolled in charter schools at 581,100. Keep in mind that the state also had the second largest number of charter school closures by the end of the 2014/2015 school year, at 32, compared to Florida with the highest at 35. This seems to indicate that accountability measures are being upheld and standards are being enforced at charter schools. It also may indicate that nearly anyone can open a charter school, but keeping one operational offers its list of challenges. California also opened 80 new charters this past year, leading the pack here as well. Californian charter school students represent over 8% of the total public school enrollment in that state. At 39,000 enrollees, according to 2015/16 data, Washington DC had the highest percentage of charter school students, over 40% of their total public school enrollment. The closest percentage to DC is Arizona at around 20% of their total public school enrollment, which includes 177,600 students (A Closer Look 2016).

Another important aspect of a charter school relates to demographics. The Hispanic population attending charter schools rose from 21 to 30% within a 10-year time frame, as the number of Black and White students decreased by 6% and 7% respectively. Bi-racial students made up about 3% of the charter schools’ enrollment in 2013/14. These trends seem to follow a similar path as traditional public schools’ demographic changes within this same time frame.


Ties to the Philanthropic Sector

The National Charter School Resource Center lists varied sources of monetary means to assist in the budgetary needs of charter schools. The public sector, fellowships, grants, as well as philanthropic organizations and foundations each may play a part in the financial aspect of supporting charter schools. Charter schools and charter school networks are varied and widespread, but also may come and go quickly, so data is challenging to consolidate. Some financial support opportunities are as follows:

Offered by the National Science Foundation for discovery research from pre-K to grade 12, this grant is meant to enhance STEM (Science, Technology, Engineering, and Math) education projects by research, development, and proper assessment techniques. The maximum amount of money to be awarded would be $5,000,000

Some grantmakers offer grants or low-interest loans to CMOs managing charter school networks, while others only support organizations proving their impact on underserved populations who also can demonstrate academic gains. Charter School Growth Fund Foundation gave a total of $44,588, 603 for a total of 89 individual charter school grants, $50,241,359 for programming managed by their foundation, including $22,780,000 in loans/investments for the 2014 school year. The Walton Family Foundation and the Bill and Melinda Gates Foundation and Foundation Trust (which includes Warren Buffett), each fund many charter school projects throughout the US. With the leadership of the Gates Foundation, 9 cities within the United States also signed a District-Charter Collaboration Compact where each community’s public charter and traditional public schools committed to work together to improve children’s education in 2011.


Key Related Ideas

A very important topic closely related to public charter schools is traditional public schools. With many charter schools opening and closing so often, seemingly siphoning money from traditional public schools, it would seem that our country could work to improve upon the traditional public school system the way charters have attempted to do. With a system and students already in place as well as the facilities, which in some cases are being rented or sold to charter schools, one would think that improving the existing schools would be easier and preferable. Central office red tape, the offering of school choice, and the push against traditional education models with their rules and regulations, may be part of the influx of charter schools. The omnipresence of politics surrounding education is very real. Money plays a big factor as well. The continued growth of charter schools has awakened a new education reform movement which stirs much emotion and controversy.

A very controversial, but not very well-publicized network of charter schools called the Gulen Movement or GM experienced growth in the US starting in 1999. This largest group of charter schools in our country began in the country of Turkey in the late 60s by a secret Turkish religious group. As of 2016, 150 GM charters educating 45,000 students were operating within 13 states. The Walton Family Foundation has funded their charters. The group has been cited for many issues including teaching religion in a public school, their admissions and funding practices, immigration fraud, bribery, political maneuvering, and hiring and firing practices, all while utilizing public money. On the other hand, the schools’ results show success and Gulen himself claims no association with school operations and no misuse of funds.

Important People Related to the Topic

Ray Budde (1923-2005): Upon suggesting teachers in New England should be given the opportunity to try new ways to teach students in the 1970s, University of Massachusetts education professor, Ray Budde started a movement. It is widely thought that the term “charter” was thus created with the idea that teachers could be given more freedom and power to control their professional skills while also being supported by unions. His vision also included offering more choices for students and a results-driven accountability. Budde appreciated the “way things are organized” setting his mind to getting funds and power back in schools, not in top heavy central offices, as is laid out in his 1974 paper “Education by Charter.” Although his paper did not create much of a reaction in 1974, when republished in 1988, people began to reconsider the idea.

Ted Kolderie: Minnesota’s Ted Kolderie was instrumental in the design and passage of American’s first charter school law in 1991 following the 1990 publication of his paper “The States Will Have to Withdraw the Exclusive.” Prior to the 90s, he was a journalist and senior fellow at the University of Minnesota. From 1967-1970, Kolderie served as Executive Director of the Minneapolis/St. Paul Citizens League. Here, he learned about government advocacy and policy while serving on the think tank’s nonpartisan board. Charter Schools Hall of Fame member and “godfather” of charter schools, Kolderie is currently co-founder/Senior Associate at Education Evolving. This nonpartisan, non government policy group strategizes for improvement and change in the K-12 range in the U.S. Key concepts offered by Kolderie are “innovation” and “improvement” which are both highlighted in his book, The Split Screen Strategy.

Al Shanker (1928-1997): Former president of the American Federation of Teachers (AFT), Albert Shanker publicized and endorsed Budde’s idea in 1988, following an inspirational 1987 school visit to Cologne, Germany. He was struck by the autonomy and control teachers had over their teaching profession, the successful results from the students, as well as the innovation and fresh approaches which were demonstrated by the teaching professionals. Part of his idea highlighted the true value of teacher unions. In addition, research indicates that when teachers have input at their workplace, they tend to stay and the school itself improves as a whole, which is linked to increased learning. Shanker thought that these progressive ideas would truly reinvigorate the American public education system. Many questions arose from American conservatives, thinking our traditional system was just fine. Much of this has since changed with many conservatives behind the charter movement, but union representation very low.

Related Nonprofit Organizations

  • The Center for Reinventing Public Education at the University of Washington at
  • Bill and Melinda Gates Foundation at


Reflection Question - Why do we not simply improve upon traditional public schools which already exist, rather than creating new charter schools? Is there a balance which should be struck between improving traditional public schools and developing new charter schools? How does philanthropy relate to this notion?



  • Aidenbaum, Ashley. ”Members on Issues: Does State School Reform Have a Democracy Problem?”  March 14, 2016: In Emerging Practitioners in Philanthropy [online blog].
  • Clark, Kristen M. “School Funding Is Hot Topic: Traditional, not charter, schools want to become a priority this year.” Tampa Bay Times, January 12, 2016,
  • Education Evolving. Ted Kolderie Bio.
  • Foundation Center, Issue Lab, February 2016, published by National Alliance for Public Charter Schools,
  • Higgins, Sharon. “Largest Charter Network in US: Schools Tied to Turkey.” The Washington Post, March 27, 2012,
  • Independent Sector. “American Charter Schools Foundation Signatories to Principles for Good Governance and Ethical Practice” Available from
  • National Alliance for Public Charter Schools. A Closer Look at the Charter School Movement. 2016.pdf.
  • National Center for Education Statistics. Fast Facts.
  • National Charter School Resource Center

This paper was developed by students taking a Philanthropic Studies course taught at the Lilly Family School of Philanthropy at Indiana University in 2017. It is offered by Learning To Give and the Center on Philanthropy at Indiana University.