Study Group on Education Management Organizations

Educational Leadership, Research and Technology

An education management organization is an organization or firm that manages at least one school that receives public funds and operates the public schools it manages under the same admissions rules as regular public schools. Education management organizations can be for-profit or nonprofit organizations. They can manage traditional public schools or charter schools.

History

Education management organizations emerged in the early 1990s in the context of widespread interest in market-based school reform proposals. Wall Street analysts coined the term education management organizations as an analogue to health maintenance organizations. Proponents of education management organizations claim that they bring a much needed dose of entrepreneurial spirit and a competitive ethos to public education. Opponents argue that outsourcing to education management organizations results in already limited school resources being redirected for service fees, profits, or both while creating another layer of administration. Opponents also have expressed concerns about the implications of public bodies relinquishing control or ownership of schools.

Nonprofit or for-profit

Education management organizations vary on a number of dimensions, such as whether they have for-profit or nonprofit status, whether they work with charter schools, district schools, or both, or whether they are a large regional or national franchise or a single-site operator. Historically, a smaller portion of education management organizations have been nonprofits. In recent years, however, the number of nonprofit education management organization has surpassed the number of for-profit education management organizations. The for-profit education management organizations operate more schools on average, but the number of schools operated by nonprofit education management organizations is approaching the number of schools operated by for-profits.

Growth of education management organizations

As this graph indicates, the growth of the for-profit education management organizations is slowing, while the number of schools operated by nonprofit education management organizations continues to grow at an increasing rate.