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November 17, 2017

4 min

Method Schools Team

Pop Quiz: How Much Do You Know About Charter School Funding?

Although charter schools have risen in popularity with parents and national education leaders for the last twenty years, some common misconceptions in the general public persist. From curriculum to tuition to funding, many parents who are seeking a viable alternative for their child's education simply aren't aware of what charter schools are, how they operate, and perhaps most importantly, how they are funded.

And with stiff competition for public education dollars coupled with a demand for educational choices, it is important to inform parents as well as taxpayers about where the money comes from, and where it goes.

What are charter schools and how do they operate?

A charter school is a public school with a few minor differences. Charter schools provide education for grades K-12 with specific operating procedures and goals detailed in an agreement (charter), and are typically organized by parents, teachers, community leaders and or organizations. They are often sponsored by local school boards or a county board of education.

A charter school operates by just that, a charter. The charter itself determines not only the curriculum and matrixes for measuring student performance, but down to brass tacks business components such as the school name and management policies as well. Charter schools are not religious, are not allowed to charge tuition, must have open enrollment, and must participate in the same state and federal testing programs as traditional public schools.

The biggest difference between traditional public schools and charter schools is that the latter enjoys considerable independence from state rules for curriculum choices, budget management, and staffing decisions. Charter schools are able to do this because their charters are reviewed by an appropriate authority every three years, and run the risk of having their charter agreement revoked altogether if the designated agency determines that action to be appropriate. Traditional public schools are under no obligation for any such review.

Other differences between the two school types are:

  • Charter schools can be run by parents, teachers, community members, or entrepreneurs; whereas traditional public schools are run by school boards consisting of elected officials that have authority over the schools, and the entire district as well. School districts are considered independent government entities.
  • Traditional public schools and charter schools both seek to be accredited by a standardized accrediation organization. In California, schools seek accreditation from the Western Association of Schools and Colleges (WASC). All three Method Schools - Method Schools K-8, Method Schools High, and Method Schools are accredited by WASC.
  • Both school types are free to attend and have open enrollment, but traditional public schools must limit their enrollment to students who live within the geographic boundaries of the school or the district, depending on the district policy. Charter school boundaries are determined by the charter agreement, and may not restrict enrollment to anyone within that agreement. Contrary to belief, charter schools do have geographic enrollment boundaries.

How are charter schools funded?

Both charter and traditional public schools are funded with public tax dollars. Public schools, therefore charter schools, receive "base funding" and "categorical funding" from states. Base funding, sometimes referred to as "foundation funding" is based on the educational needs per student. Categorical funding covers costs for a variety of programs such as summer school and special education. Calculations and requirements for both types of funding vary from state to state. Because charter schools are often limited on local taxes and municipal bonds, most states offer grants and awards specifically for charter schools.

In the State of California, charter schools are defined as "public schools that may provide instruction in any of grades K-12 that are created or organized by a group of teachers, parents, community leaders or a community-based organization." California offers three funding programs specifically designated for the start up of charter schools:

  1. Public Charter Schools Grant Program (PCSGP) - The PCSGP funds planning and implementation of between $250,000 and $575,000 to plan and implement new charter schools; and provides funding for disseminating best practices to improve academic achievement.
  2. Charter School Facility Grant Program (CSFGP) – The CSFGP provides assistance with rental and lease expenses for low-income charter schools. Targeted toward charter schools with at least 70 percent of the students enrolled in reduced-price or free lunches, this grant program can cover up to 75 percent of the costs incurred for the facility's rent and or lease expenses. This is only available for "seat-based," not indepedent study model schools such as Method.
  3. Charter School Revolving Loan Fund (CSRLF) – The CSRLF provides low-interest loans of up to $250,000 to assist new charter schools in meeting their charter agreements. This can include most relevant startup costs such as initial operating capital.

After the start up phase, charter schools are funded by student enrollment multiplied by the percentage of students who were present (not just enrolled) multiplied by a predetermined per student grant amount determined by California's Locally Controlled Funding Formula (LCFF).

A quick recap for all the studious readers:

Charter schools are public schools, just not in the traditional sense. They are tuition-free, required to have open enrollment, and receive the same types of funding as traditional public schools. Charter schools do not receive more funding than traditional public schools, and in the vast majority of cases, receive slightly less per student. Most states have different requirements for funding for all public school types, and several states offer grant and or loan programs specifically for charter schools.

The biggest difference between charter and traditional public schools is that the former has a good deal of autonomy from state education rules because they have specific guidelines and procedures designated in their charter agreements. This self-sufficiency comes with the risk of revocation upon periodic review by a state designated authority. By contrast, traditional public schools are subject to state education rules but do not run the risk of any sort of revocation due to periodic review.

If you live in Southern California, contact us today to learn more about how we provide school solutions that meet unmet student needs. Method Schools strives to build and grow sustainably, and is never afraid to question outdated ways of doing things.


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