From a political movement to a set of public policies to various experiments in practice to… what? This has been the trajectory of charter schools, starting roughly 20 years ago. Today, in 39 states and the District of Columbia, nearly 5,000 charter schools enroll more than 1.5 million students. And pressure from the Obama administration will likely lead to further growth.

But:

• The “market share” that charters have built is only about 3% of total national enrollment, and their market penetration is lumpy: Seven states, including Michigan, contain 60% of national charter enrollment, while 11 states do not permit charter schools. And only 10 cities have more than 22% student enrollment in charters.
• Charters are starting to replicate some undesirable qualities of the traditional school system, including:
• Broad mediocrity of student achievement, with islands of excellence. (Even where charters perform better than traditional schools, it’s usually by only a little bit.)

• Low level of accountability for school performance. E.g., it’s still rare for a low-achieving school to be closed.

• Very little capacity to substantially improve school performance once an achievement pattern has set in.

Nonetheless, charters offer important bright spots for education transformation:

• They have demonstrated the effectiveness of new school designs, especially for low-income, minority students; alternative HS students; and early college “accelerated” students, as well as other targeted niches (e.g., an elementary school conducted in Mandarin Chinese).
• They have spread effective school models within cities, states, and through multi-state charter operators.
• They have tried, though in a fairly undisciplined way, various other innovations in K-12, such as merit pay for teachers.

So where is all this heading?

The strategic purpose of charters is evolving.

• Innovation R&D. Initially it was thought charters would develop innovations that, due to competition for student enrollment, would be adopted by—transferred to—school districts. Some of this has happened, but not nearly at the scale or with the impact envisioned. Charters have been a modest source of innovation. School districts have resisted charters and competed with them politically to limit their impact. And school districts are constrained in adopting innovations by many forces: unwillingness to change existing institutional arrangements; unwillingness to reallocate resources for innovation; etc.
• Market Share. It was also thought that charters would exist as a permanent alternative choice for parents/students, whether school districts adapted or not. But charters have captured more than 20% of the market in only a few communities (only in New Orleans have they captured a majority of the market, but this was a political, rather than consumer, decision after Hurricane Katrina). It seems likely that charter market share will grow: due to Obama administration pressure on the 26 states with charter caps to loosen restrictions on charter expansion. At the same time, many charters have big waiting lists. However there may be other constraints on charter growth:
  • Human Resources. It takes time and money to find and prepare people to be “building leaders” for new charter schools. This appears to be a bottleneck for expansion of even the most successful charter operators.
  • Facilities and Facility Financing. Although many charter financing programs have emerged, the fact is that finding an appropriate facility and financing its acquisition and upgrade (to code and to fit the school design) is a substantial challenge for most charter entities.
  • Charter Quality. Although charters have benefitted from the parent/student flight from traditional districts, it seems likely that at some point the pool of people attracted to alternative schools will have dwindled. Gradually, issues of school performance, rather than just “being different” will matter, and many charters are not especially well positioned to compete on that basis.

Perhaps the strategic value of charter schools now goes beyond being a source of innovation or of alternative schools. As they have spread, charters also offer a model for the “school system of the future” with characteristics quite different from those of the traditional school district model. The charter system features:

• Highly distributed (decentralized) control of schools. The governance model inherited from the last century has school boards that govern dozens of schools (or more) and appoint a superintendent to manage them--a large, centralized system. The charter system offers something quite different: a decentralized model of governance with many more and smaller "units." In Michigan, for example, where charters have about 6% of enrollment, there is a charter governing board for every 700-800 students. Traditional district boards average 3,000 students, with big-city boards multiples larger than that.
• School authorizers that “shop” for providers, using performance standards to select among competitors. Essentially, charter authorizers play the role of state government, identifying who it will "contract" with to organize a school district and what standards the school must meet. Except that charter authorizers have used performance contracting that specifies the desired student achievement results and they issue time-limited contracts that have to be renewed based on performance. These are not practices of state departments of education or of traditional school districts.
• Highly diverse providers. Differently designed schools--from diverse grade configurations to various "whole school" designs--are the hallmark of charter schools. They are both a source of innovation for educators and of choice for parents/students. Increasingly, it's possible for students/parents to "match up" with a particular, distinct type of school. Some districts, such as New York City, have been building this sort of diverse supply of schools into their systems. But most are still in the "one model fits all" mode.

These features may sum to a new strategic asset in education reform: The charter system of highly decentralized governance; small districts; schools with diverse grade configurations; performance-based schools; and accountability contracts has become a viable, scalable alternative to the centralized district model of the last century.