4 ms·

I assume there are a large number of private schools in the US that are for-profit and doing well. The key is scale and the desire to change the education syste

I assume there are a large number of private schools in the US that are for-profit and doing well. The key is scale and the desire to change the education system. I don't fault the startups for aligning with top colleges. The big names bring credibility. I imagine it's difficult to compete in the primary education market with a product that's free (Government Schools).

dogma1138 10y ago
Most private schools are not for profit. They don't have investor and the endowments are not used to pay dividends. Private doesn't mean for profit, and non for profit doesn't mean they can't make money it's what the money is used for that defines them.
- baldfat 10y ago
  For Profit and Non-Profit means nothing but when the money is spent. a non-profit just makes their books zero by paying their "CEO" and "Board members" the profits each year and can't carry over for investments. ALL CHARTER SCHOOLS ARE PUBLIC SCHOOLS. Most people totally forget this point.
  - Jtsummers 10y ago
    > a non-profit just makes their books zero by paying their "CEO" and "Board members" the profits each year and can't carry over for investments. This claim is false. > Although NPOs are permitted to generate surplus revenues, they must be retained by the organization for its self-preservation, expansion, or plans. [0] Non-profits are perfectly capable of carrying money over each year, but the purpose of those "profits" are not for the financial gain of board members or CEOs, in fact doing what you suggest could be illegal in some jurisdictions, but rather to further develop or sustain the non-profit and its goals. Spending on things like CEO bonuses would make the money taxable (if they're honest or, more likely, caught in an audit). [0] https://en.wikipedia.org/wiki/Nonprofit_organization https://en.wikipedia.org/wiki/Nonprofit_organization
    - baldfat 10y ago
      > This claim is false. Why would you say that and not check? "One of Chicago’s leading charter networks, the nationally recognized Noble Network of Charter Schools, paid its CEO and founder Michael Milkie a salary of $209,520 and a bonus of $20,000." https://themerrowreport.com/2016/02/25/whos-raking-in-the-big-bucks-in-charterworld/ https://themerrowreport.com/2016/02/25/whos-raking-in-the-bi... I have worked in non-profits since 1989 and I can state that zero balance is the vast majority 90% + of all their system. The reason is designated funds. I work in a educational institution and we have around 50 million in our operating budget. We have millions but for miscellaneous expensiveness we need to get outside money and donations. My job is paid for by these donations. My company when we have extra money from unfulfilled positions that becomes out bonuses because they can't use those funds for anything else like maintenance or capital expenditures. SOME non-profits just have HUGE CEO pay and then if they don't have the "profit" for their salary they don't take their whole salary that year. They also can give consulting fees to board members. There is a TON that happens in Non-Profits that just makes me sad. Fortuitously I have never worked in one and currently work in the best run non-profit I have ever worked in. There are plenty of examples of HUGE CEO pay in non-profits. > Spending on things like CEO bonuses would make the money taxable (if they're honest or, more likely, caught in an audit). That's not factual "In 2010, one-third of nonprofits surveyed provided bonuses to their well-paid executives, and the median bonus was over $50,000." https://www.philanthropy.com/article/Executive-Pay-Increased-by/156075 https://www.philanthropy.com/article/Executive-Pay-Increased...
      - baldfat 10y ago
        Please refute my "facts" and not just don't down vote. I replied to a person saying I was in error and I replied back with the actual numbers.
    - oldprogrammer2 10y ago
      I think baldfat's point might be that "non-profit" doesn't necessarily imply that those organizations are not designed to allow profits to be paid out as compensation. Excessive compensation to non-profit leadership can often be paid based on the same metrics as a corporation (basically, increasing revenue). It's certainly not the norm, but there are more than just a few exceptions where CEOs of non-profits (including universities) are earning in excess of $1 million per year.
- bandrami 10y ago
  The issue is rarely the schools themselves (hell, nearly all charters are non-profits, for that matter) but the Education Management Companies they hire to do the actual operations. The school is simply a conduit to get public money to that company.
alistairSH 10y ago
In the primary and secondary education markets in the US, most for-profits are fully or partially funded by the local government as replacements for government-owned schools. Often this is done with some flavor of a voucher system, where students within the school district can attend any school in the district (public or private). In other cases, the district will hire a for-profit school to run a magnet school. The whole system is often corrupt, with the for-profit school being audited by a company that shares common investors.

dogma1138 10y ago

Most private schools are not for profit. They don't have investor and the endowments are not used to pay dividends. Private doesn't mean for profit, and non for profit doesn't mean they can't make money it's what the money is used for that defines them.

baldfat 10y ago
For Profit and Non-Profit means nothing but when the money is spent. a non-profit just makes their books zero by paying their "CEO" and "Board members" the profits each year and can't carry over for investments. ALL CHARTER SCHOOLS ARE PUBLIC SCHOOLS. Most people totally forget this point.
- Jtsummers 10y ago
  > a non-profit just makes their books zero by paying their "CEO" and "Board members" the profits each year and can't carry over for investments. This claim is false. > Although NPOs are permitted to generate surplus revenues, they must be retained by the organization for its self-preservation, expansion, or plans. [0] Non-profits are perfectly capable of carrying money over each year, but the purpose of those "profits" are not for the financial gain of board members or CEOs, in fact doing what you suggest could be illegal in some jurisdictions, but rather to further develop or sustain the non-profit and its goals. Spending on things like CEO bonuses would make the money taxable (if they're honest or, more likely, caught in an audit). [0] https://en.wikipedia.org/wiki/Nonprofit_organization https://en.wikipedia.org/wiki/Nonprofit_organization
  - baldfat 10y ago
    > This claim is false. Why would you say that and not check? "One of Chicago’s leading charter networks, the nationally recognized Noble Network of Charter Schools, paid its CEO and founder Michael Milkie a salary of $209,520 and a bonus of $20,000." https://themerrowreport.com/2016/02/25/whos-raking-in-the-big-bucks-in-charterworld/ https://themerrowreport.com/2016/02/25/whos-raking-in-the-bi... I have worked in non-profits since 1989 and I can state that zero balance is the vast majority 90% + of all their system. The reason is designated funds. I work in a educational institution and we have around 50 million in our operating budget. We have millions but for miscellaneous expensiveness we need to get outside money and donations. My job is paid for by these donations. My company when we have extra money from unfulfilled positions that becomes out bonuses because they can't use those funds for anything else like maintenance or capital expenditures. SOME non-profits just have HUGE CEO pay and then if they don't have the "profit" for their salary they don't take their whole salary that year. They also can give consulting fees to board members. There is a TON that happens in Non-Profits that just makes me sad. Fortuitously I have never worked in one and currently work in the best run non-profit I have ever worked in. There are plenty of examples of HUGE CEO pay in non-profits. > Spending on things like CEO bonuses would make the money taxable (if they're honest or, more likely, caught in an audit). That's not factual "In 2010, one-third of nonprofits surveyed provided bonuses to their well-paid executives, and the median bonus was over $50,000." https://www.philanthropy.com/article/Executive-Pay-Increased-by/156075 https://www.philanthropy.com/article/Executive-Pay-Increased...
    - baldfat 10y ago
      Please refute my "facts" and not just don't down vote. I replied to a person saying I was in error and I replied back with the actual numbers.
  - oldprogrammer2 10y ago
    I think baldfat's point might be that "non-profit" doesn't necessarily imply that those organizations are not designed to allow profits to be paid out as compensation. Excessive compensation to non-profit leadership can often be paid based on the same metrics as a corporation (basically, increasing revenue). It's certainly not the norm, but there are more than just a few exceptions where CEOs of non-profits (including universities) are earning in excess of $1 million per year.
bandrami 10y ago
The issue is rarely the schools themselves (hell, nearly all charters are non-profits, for that matter) but the Education Management Companies they hire to do the actual operations. The school is simply a conduit to get public money to that company.

alistairSH 10y ago

In the primary and secondary education markets in the US, most for-profits are fully or partially funded by the local government as replacements for government-owned schools. Often this is done with some flavor of a voucher system, where students within the school district can attend any school in the district (public or private). In other cases, the district will hire a for-profit school to run a magnet school. The whole system is often corrupt, with the for-profit school being audited by a company that shares common investors.