How Charter Schools Work

Florida Governor Rick Scott visits the Florida International Academy charter school in Opa Locka on Jan. 6, 2011.
Florida Governor Rick Scott visits the Florida International Academy charter school in Opa Locka on Jan. 6, 2011.
Joe Raedle/Getty Images

Charter schools provide a choice to parents and students who aren't satisfied with the educational opportunities of public schools, but aren't interested in or can't afford to attend a private school. A charter school is free to attend and usually funded with state education money.

While they're held to the same academic standards as public schools, proponents say charter schools are less encumbered by the bureaucracy of a public school system, giving them the freedom to explore different areas and methods of education. They can differ from public schools by focusing on particular subject areas (science and technology, or art and music), preparing students for a specific college major, using a distinct set of teaching methods, or wrapping the school's rules and activities around a theme such as military discipline.


On the other hand, critics contend that charter schools don't offer students a better education, aren't held as accountable to education standards, and drain funding away from public schools. It can be a contentious issue; multiple studies on the effectiveness of charter schools show contradictory conclusions.

Whether or not they're the better choice, charter schools do offer options to parents who feel dissatisfied with traditional public schools. They've grown increasingly popular in the U.S. and in other countries: Since the charter school movement began in the late 1980s, it has grown to include over 5,000 charter schools in the U.S. alone, serving 1.7 million students [source: Center for Education Reform]. This article will explain how charter schools are created and how their funding works. We'll take a look at the educational opportunities they offer and also delve into the controversy that surrounds them.

Getting Started

Charter schools are not public schools, but they aren't exactly private schools either. Like public schools, they're free to attend for students within the school district, and they're typically funded by taxpayers. Like private schools, they can set their own rules for admission and choose which students they'll accept -- provided the schools follow all laws that forbid discrimination, of course.

The exact rules governing the operation and funding of charter schools vary from state to state. While there are federal laws in the U.S. that are related to charter schools (including, in part, the No Child Left Behind Act), there isn't one that determines their specific operation. State law sets the rules for charter schools within that state and determines which of the three primary types of authorizing bodies govern charter schools within that state: the state board of education, local boards of education or a separate authorizing body independent from the board of education. Forty states, plus Washington, D.C. have laws allowing the creation of charter schools [source: Center for Education Reform].


To create a charter school, a group first must apply to an authorizing body. Groups might include a cluster of parents who have formed a non-profit organization, a university, or, in states which allow it, a for-profit organization. The group's plan for the charter school must meet the criteria set by the authorizing body, which vary from state to state or even from school district to school district. If the plan is approved, the authorizing body issues a charter. The charter is only valid for a limited period of time -- typically three to five years -- which allows the school's performance to be reviewed periodically when it's time for charter renewal. A struggling school might have its charter renewed for only a one-year period so the authorizing body can look for evidence of a turnaround.

Next, we'll talk about how charter schools are funded.

Funding Issues

Since charter schools don't charge tuition, they must find other ways to receive funding. State laws determine exactly how charter schools are funded. They typically receive a portion of the state's education aid money for each student who attends the school. This money would usually go to the public school system, but instead it's diverted to the charter school. This is the source of a great deal of contention between people who are pro-public schools and those who are pro-charter schools. Public schools complain that this diversion of money undermines the public school systems. Charter schools complain that, under most funding systems, they receive only a percentage of the actual amount per student that the public schools receive from the state, an average of 61 percent in the U.S. [source: Center for Education Reform].

Further complicating the issue is the fact that charter schools have to fend for themselves when it comes to purchasing, building and maintaining the physical property of the school itself. Public schools can undertake large capital improvement projects through tax-payer funded bonds. Charter schools can attempt this type of funding, but it's difficult and often leaves the charter school with a higher interest rate than a public school would receive. As a result, charter schools turn to alternative means of funding. Donations from private individuals and corporations boost funding levels at some charter schools by 20 percent or more [source: Education and the Public Interest Center].


The bottom line when it comes to charter school funding is that the funding equation is not simple. Charter schools draw funding from a variety of sources and have to do a lot of work to bring up the amount they have to spend per pupil.

Up next, we'll take a closer at what makes a charter school different from a conventional public school.

Flexibility and Accountability

The chief advantage of charter schools is that they aren't bound by strict curriculum regulations and other bureaucratic requirements. This allows them to focus on specific content areas, emphasize different aspects of education, offer innovative classes, and teach subjects that aren't always found in a typical public school. A charter school might assign more difficult assignments than students at a conventional public school would face, or place a heavy emphasis on writing skills. Charter schools can let students create independent projects and even alter the length of the school day or school year.

One example of a charter school taking an innovative approach to a high school curriculum is the Western New York Maritime Charter School in Buffalo, N.Y. In addition the usual classes required of high school students, every student is enrolled in the Navy Junior Reserve Officer Training Corps (NJROTC). They wear naval uniforms and hold NJROTC ranks. The school emphasizes a naval code of conduct; students participate in drills, color guard and other NJROTC activities. Students have helped refurbish a sailboat and can take sailing lessons. Many of the administrators in the school served in the U.S. Marines and U.S. Navy.


Charter schools aren't completely exempt from oversight and accountability, despite their flexibility. They must still adhere to the standards set by the state or local board of education. The students still have to take and pass standardized tests as required by the state, and school performance is generally measured by the students' scores on these tests. If a charter school's test scores fall too far below the scores in nearby districts, the school may be in danger of losing its charter and closing.

Charter schools may be innovative, but why are they so controversial? We'll talk about that next.

The Charter School Controversy

Numerous studies have been conducted on charter schools over the years. You'd think that would shed some light on the issue of whether or not charter schools are beneficial. Unfortunately, every study that supports one point of view is contradicted by two more that support the opposite view. The problem is that measuring education is tricky -- actually, it's almost impossible. There are too many variables to take into account, such as funding, student diversity, location, economic issues, cultural issues and a whole slew of other factors. Generating a meaningful comparison between groups or types of schools is extremely difficult.

So the controversy rages on. We've already discussed many of the advantages that charter schools claim. The National Education Association points out several problems:


  • Charter schools drain money from public school systems.
  • Charter schools are able to cherry-pick the best students and turn away weaker students or those with discipline problems.
  • Charter reviews every few years do not provide enough accountability to ensure that the schools are properly and effectively teaching the necessary material.

There are elements of truth to all these complaints, but there are qualifying factors as well. For instance, charter schools are able to set high academic standards for admission. This often results in a waiting list or lottery system to determine who can attend the school, and students with poor grades may not make the cut. However, there are charter schools whose missions revolve around working with troubled students or raising the grades of students with academic problems.

The controversy is certainly not eased by the fact that political and racial issues are part of the discussion. While the charter school concept was first created by a teacher's union, few charter schools are unionized, while most public school districts are. This gives the discussion a "labor versus anti-labor" twist that does little to clarify the issue. Also, the majority of charter schools are in urban areas. The demographics of American cities mean that the majority of charter school students are therefore minorities, so attacks on the charter school system are sometimes perceived as having a racist undertone.

While the question of charter schools seems complex, there's actually a fairly simple answer. Charter schools are like anything else: when they're well-managed and well-funded, they produce good results. The same can be said for public schools. In the end, it's really just a matter of choice.

Lots More Information

Related Articles

  • Center for Education Reform. "All About Charter Schools." (Accessed May 13, 2011)
  • Center for Education Reform. "Charter School Funding." (Accessed May 13, 2011)
  • Miron, G. & Urschel, J.L. "Equal or fair? A study of revenues and expenditure in American
  • charter schools." Boulder and Tempe: Education and the Public Interest Center & Education Policy Research Unit. (Accessed May 12, 2011)
  • National Education Association. "Charter Schools." (Accessed May 12, 2011)
  • Western New York Maritime Charter School. "The School." (Accessed May 13, 2011)