Foundations and Assessment of Education/Edition 1/Foundations Table of Contents/Chapter 6/6.8.2

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For-Profit Schools and Corporate Sponsorships
Brian Smith

Learning Strategies[edit]

  • Define for-profit schools.
  • Define educational management organizations (EMOs).
  • List the possible pros and cons of for-profit schools.

What are for-profit schools?[edit]

There are two types of for-profit schools. The first kind is one that operates as a business and attempts to make a profit from its operation. The second kind is called an educational management organization or EMO. An EMO contracts with school districts and charter schools to operate public schools; most for-profit schools operate as EMOs. The biggest difference between the two types is that EMOs usually manage schools receiving public funds (NSPCE). Edison Learning is one of the largest educational management organization in the United States, serving close to three hundred thousand students in twenty four states (

How do EMOs operate?[edit]

Typically an educational management organization will contract with a public school to operate one or more schools with a history of under performance or an inability to make steady progress. They partner with a number of schools that have been designated by their states as, "in need of improvement" (Education Innovator). Many of the schools operate in low-income areas. EMOs manage schools under a contract in which the EMO exercises full administrative control over the school. The principal and teachers are EMO employees, and decisions about curriculum and instructional practice are made by the EMO (Plank). In exchange for the freedom to self-govern these schools are expected to deliver a higher level of achievement than the public schools provide (Weiss).

Edison Schools[edit]

Edison schools work closely with its partners to implement a comprehensive, research-based school design with an unrelenting focus on achievement. It features a reading and math skill-building program developed to help all students meet or exceed proficiency. Edison schools divide schools into smaller groups or academies, provide interactive professional development for teachers and staff, and integrate various technologies to support the program. One of the hallmarks of Edison schools is an online benchmarking system in which students are assessed on a monthly basis. The assessments provide an objective, standards based measure of student performance (Education Innovator). Edison schools provide more instruction than the typical public school. Students attend school for an additional hour (8) each day and twenty more days a year (200). Additionally, every Edison student above second grade gets free use of a home computer (Greenwald).

What do advocates of for-profit schools and EMOs say?[edit]

Advocates of for-profit schools and EMOs make three arguments:

1. Why should profits be acceptable in some parts of the educational system and not in others?

  • They contend that many activities in the educational system have always been run by private firms such as textbook production and standardized testing.

2. Why should we exclude for-profit firms from providing educational services?

  • They contend the pursuit of profits serves our society well in many ways. We rely on profits to finance our retirement and to provide most of the goods and services that we consume, including food, housing, and health care.

3. If private firms, motivated by profit, can enhance organizational efficiency and do a better job educating our children, why not let them try?

  • The public sector has failed to provide a satisfactory standard for large numbers of children, especially poor and minority children in urban areas (Plank).

Proponents also claim that business models will benefit students, because financial success depends on providing a quality education. Schools must improve to compete for students (NSCPE. Competition, driven by the profit motive, can deliver the quality education many parents are looking for (Symonds). If test scores drop, parents complain, or teachers quit the company stands to lose its contract (Pollard).

Possible Advantages[edit]

  • Greater Efficiency- Schools have incentive to be efficient and eliminate unnecessary expenses.
  • Increased Competition- To gain fees and attract students, schools are encouraged to offer successful programs and produce successful results.
  • Responsive to Customers- Each school must adapt to the needs and desires of its students.
  • Encourage Innovation- Schools benefit from offering new products, which induces them to experiment (NSCPE).

Possible Disadvantages[edit]

  • Lack of Knowledge- A proven blueprint does not exist; therefore, management can make costly errors.
  • Misguided Focus- The fundamental purpose of school is to educate, not to make money; school functions may conflict with making profits.
  • Eliminated Services- Schools may minimize or eliminate school services readily available in public schools, because of costs.
  • Large Added Costs- Unique costs, such as marketing and promotion, may drain instructional resources (NSCPE).

Are they working?[edit]

The two basic goals of for-profit schools and EMOs are to make money from the educational services that they provide and to provide academic achievement to students. These corporations have struggled to show profits (NCSPE). If an when they turn a profit it will be a relatively small one. The profit margin for EMOs hovers at around seven percent (Pollard). According to Edison CEO and founder, Chris Whittle, students have raised their performance on standardized tests an average of five percent each year (Greenwald). Five year gains in reading and math at Edison Schools are approximately twice the states' average gains (Edison).


The idea of a school operating as a business and seeking a profit may seem like a radical idea when first mentioned. However, after researching for-profits and educational management organizations I feel that they may actually serve a very useful purpose in today's educational system. I had never heard of for-profits before beginning this article and at first I was figuring that they would cater to upper class families. I was quite surprised that the majority of them serve lower income families and students that are struggling to meet expectations and achieving standards. For-profits serve a very meaningful purpose and have a much higher standard to live up to; if they are not succeeding, they will not survive, as is the case with most businesses. They have shown very good academic achievements, but have not been very profitable. Which leads me to wonder whether or not they will survive in the current economic climate.

Multiple Choice Questions[edit]

1. What do most for-profit schools operate as?

a. charter schools

b. day schools

c. educational management organizations (EMOs)

d. private schools

2. How do long is the school day and school year at Edison Schools?

a. 7 hours and 180 days

b. 10 hours and 150 days

c. 8 hours and 200 days

d. 9 hours and 210 days

3. After which grade do students at Edison Schools receive a free computer for home use?

a. first grade

b. fourth grade

c. second grade

d. third grade

4. Which type of families do the majority of for-profits serve?

a. lower class

b. middle class

c. no class

d. upper class

Answers: 1.c 2.c 3.c 4.a


(Dec. 13, 2004). The Education Innovator, 47, Retrieved Feb 7, 2009, from

Achievement. Retrieved February 7, 2009, from Web site:

Greenwald, John (Mar 12, 2000). School for Profit. Time, Retrieved Feb 7, 2009, from,9171,40756,00.html

Pollard, Rebecca (Dec 1, 2002). Will Privatization Save Public Schools?. Harvard Graduate School of Education News, Retrieved Feb 7, 2009, from

Symonds, William (Feb 7, 2000). For-Profit Schools. BusinessWeek, Retrieved Feb 7, 2009, from

Weiss, Clyde (May/June 2000). Readin', Writin', and Profitn'. AFSCME WORKS Magazine, Retrieved Feb. 7, 2009, from

What are For-Profit Schools?. Retrieved February 7, 2009, from Web site: