What is a charter school? It is a tuition-free public school created on the basis of a license or “charter” with the State Board of Education or an institute of higher learning. They are legally allowed to operate outside many regulations that apply to traditional public schools.

How are charter schools different from private schools? Charters receive government money. Private schools charge tuition, and they are free to operate how they choose.

Who can attend a charter school? The schools are open to any student—and there is no districting, so a student can apply at any school that has space. If the number of applications exceeds the school’s capacity, students are selected by lottery. However, children of the school’s board members and teachers receive priority. Charter schools are legally required to have a racial/ ethnic mix that reflects the community where the charter is located.

How are charter schools funded? Public tax dollars are the main source. However, charters can also raise money from private donors. Tuition is free. Schools must have nonprofit status, but they can be managed by nonprofit or for-profit companies, which can control the curriculum, enrollment and hiring/ firing of personnel.

Some charters are managed by for-profit companies. How do these companies make money? Like a traditional public school, a charter receives money per pupil based on a formula determined by the state. The company can charge a management fee to the charter school, which is often based on a percentage of revenues from the student allotment, plus any private donations the school may have received.

Do they provide lunch and transportation? Charters aren’t required (although some do) to serve lunch or provide transportation for students, which is one way the schools save money and can earn a profit. However, unlike traditional public schools, charters have to finance their buildings and facilities.

What is the curriculum? Each school’s board of directors chooses the curriculum, which is approved by the State Board of Education. Charters aren’t required to follow the N.C. Standard Course of Study. Charter school students must take state-mandated tests.

How long can each charter operate? The initial charter is granted for up to 10 years, with a five-year review.

What are the qualifications for the teachers? State law requires 75 percent of charter school teachers in elementary grades to be licensed; 50 percent in middle and high school must be licensed.

Sources: Department of Public Instruction, ProPublica, Educational Policy Works

More info from SBO/DPI’s Office of Charter Schools

That picture you carry in your mind’s eye of a public school system? Set it aside. In the world of charter schools, you won’t find a lot of clocks on bell towers, yellow school buses or cafeterias, and there are no elected boards of education to uphold a community’s vision. Typical charter schools, whether in North Carolina or elsewhere, rent space in office buildings, malls or churches. Instead of buses, most organize carpools for parents and the kids arrive with a bag lunch.

Charter schools are public schools and receive money from the taxpayers, but each is governed by its own board of directors, selected not elected. The schools are nonprofit organizations, but they often hire a for-profit management company to be in charge.

Sometimes it’s hard to tell.

Also hard to tell, as North Carolina plunges headlong into the charter school business following the passage of Senate Bill 8 by the Republican-led General Assembly, is whether the issue of for-profit management, or any of the serious issues that surround charter schools, will matter much in the application process.

SB-8 eliminated the cap of 100 such schools, allowing now for an unlimited number.

Watching the newly created N.C. Public Charter School Advisory Council in action in recent weeks, the only thing that’s clear is that the standards for approval or rejection of a charter application are unclear or non-existent. Thus, council members are left to apply their own judgment about which applicants to recommend. The same will be true of the State Board of Education, which makes the final call.

The lack of standards won’t be a big deal for the 2012–13 school year. Just nine applicants remain eligible under the fast-track process established by the State Board when SB 8 was enacted. Another 16 applicants were rejected at a preliminary stage for failing, in the short time available to them, to show compliance with even the rudimentary standards that do exist. (Applicants must have at least five board members, for example, and some idea of where the school might go.)

Of the 11 that survived the first round, one was rejected after a hearing and one withdrew, leaving nine for the State Board to review beginning in February.

Starting in April, however, advisory council members predict at least 50–70 applications will be filed for the 2013–14 school year. With more time to get their plans together, it’s expected the applicants will be strongeror at least will look stronger on paper.

How should they be judged?

John Betterton, who chairs the advisory council, wants to tighten some of the loose standards to reflect best practices of successful charter schools. But Betterton, the principal of a charter school in Roxboro, warns against a thick rule book. “You’ll know a good application when you see it,” he said during a subcommittee meeting.

Joseph Maimone, headmaster at a charter school with campuses in Cleveland and Rutherford counties, and an advisory council member, went further, saying, “There is no right or wrong answer” to what makes a good charter school. With the cap gone, he suggested, it’s unnecessary for the council to determine in advance the best applicants. “Because with the cap lifted, we’re looking at different models,” he said. “There are all kinds of possibilities out there.”

The advisory council, insists Joel Medley, director of the state’s Office of Charter Schools, is a diverse group composed of traditional public school leaders and board members as well as charter school leaders. Some sound like liberals, some like libertarians.

Overall, though, the majority view seems to be summed up best by council member Kate Alice Dunaway, a former charter school administrator from Mooresville. Give the charter school applicants a chance and their impact on public education could be vast, Dunaway said, quoting renowned anthropologist Margaret Mead: “Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it is the only thing that ever has.”

When first proposed in the late 1980s, charter schools were a product of a school-choice movement that aimed to change the world, according to Diane Ravitch, one of the nation’s foremost educational experts. The goal was to break what critics decried as the public schools “monopoly” and replace it with a competitive, free-market approach that would force schools to improve or close.

In her 2010 book, The Death and Life of the Great American School System: How Testing and Choice Are Undermining Education, Ravitch explains why charter schools emerged as a widely supported compromise between traditional schools and the idea, championed by conservative economist Milton Friedman, that every parent should be allowed to choose a private or parochial school for their children using taxpayer-funded vouchers.

Charters were “choice” schools toono child was forced to attend onebut they would be public, not private, schools, Ravitch says. As such, they would be open equally to all applicants, with lotteries at schools where the demand exceeded capacity.

Liberals thought that charter schools could help failing students, especially in inner-city areas with dismal traditional schools. Conservatives viewed charters as a step toward vouchers. Both believed that charters would strengthen the school system as a whole.

Ravitch, a Democrat and a strong proponent of public education, was herself a supporter of charter schools as an official in the U.S. Department of Education under President George H.W. Bush. She continued to back them until a few years ago. In fact, she notes, every president since Bush Iincluding Democrats Bill Clinton and Barack Obamahas favored charter schools.

But finally, Ravitch writes, she was forced to examine the hard evidence of whether charter schools workedand for whom.

What she found was reflected in a 2009 study by Stanford University researchers, the most comprehensive of many similar efforts. Analyzing 2,403 charter schools in 15 states and the District of Columbiaabout half the charter schools with nearly three-quarters of the charter students in the U.S.the Stanford study determined that 37 percent of the schools showed student achievement gains significantly below the local public schools. Just 17 percent were significantly better. In almost half the charter schools studied, the results didn’t differ much from the local public school system.

What many other studies demonstrated, moreover, was that charter schools tended to be segregated, because “parents chose schools with a racial profile matching their own.” And when charter schools succeeded, it was because they attracted the most highly motivated students and parents from both affluent suburban communities and inner-city neighborhoods, if that’s where the schools were located. Traditional schools were harmed, not helped.

Letting charter schools continue to cherry-pick the top students, Ravitch concluded, would spell a slow but inevitable death for the traditional schools left to cope with unmotivated, poorly prepared kids. “As currently configured,” she wrote, “charter schools are havens for the motivated. As more charter schools open … and able students enroll in them, the regular public schools will be locked into a downward trajectory. This would be an ominous development for public education and our nation.”

No comprehensive assessment has ever been made of North Carolina’s 100 charter schools, according to Joel Medley. Duke University Professor Helen Ladd’s survey last year found more than one-third were predominantly white schools, while one-fourth had few white students and were predominantly African-American and Hispanic. That tracks with what the Indy found when we looked at the 19 charter schools open in Wake and Durham counties last year: Six of them were predominantly white; six were predominantly minorities.

Using a composite of reading and math scores on end-of-grade tests, according to 2010–2011 state data, 13 charter schools in Wake, Durham and Orange counties did better than the state average, while seven were worse. (One school is new and hasn’t been tested yet; three more are high schools not subject to EOG testing.)

Most of the better-performing schools were predominantly white and located in more affluent areas.

The existing charter schools may not be indicative of what’s to come, however. Democratic legislatures used the 100-school cap to stem the spread of charters. With Republicans now in control, all bets are off. Conservatives like House Majority Leader Paul Stam, R-Wake, say their “dream” is that every public school will someday be a charter school, in part because charters are cheaper.

There are reasons why charters are less expensive to operate. Charters receive no public funding for buildings, so they use some of their operating money for rent or to finance construction. Electives and extracurricular activities are usually limited as well, though in affluent schools, parents and private donors may kick in for them. Charters don’t have to pay for school lunches or transportation, though some do.

With the cap lifted, there’s no way of predicting how many charter schools may open. Less than 3 percent of North Carolina’s public school students are in charters now. Paul Norcross, an advisory council member and the chair of the N.C. Alliance for Public Charter Schools, a trade association, says that number may soon double, but it’s not likely to go above 10 percent. “It’s like Congress,” Norcross says, half-joking. “A lot of people are critical of public schools, but they like their school.”

A wild card, though, is the proliferation of for-profit companies offering turnkey services to local groups interested in starting a charter school. Companies like National Heritage Academies, a Michigan-based outfit whose network of 71 schools includes five in North Carolina, will run your school; they’re called Educational Management Organizations.

High Mark School Development, a Utah-based for-profit, will build a school and give the charter a lease-purchase deal on it. High Mark put Durham’s Kestrel Heights School in a building. The company is shopping its services to a current charter school applicant in Northampton County, according to the application.

Then there’s K12 Inc., a public corporation with 2011 revenues of $522 million, according to its shareholder reports. K12 sells online courses to schools and manages “virtual” schoolsno buildings at allin 29 states. Such “turnkey virtual and hybrid schools,” it says, save money for taxpayers and earn profits for K12. Compensation for CEO Ronald Packard totaled $5 million last year.

Finally, private funders like the Oregon-based Challenge Foundation are springing up to support privatized public schools. Eight Challenge Foundation Academies (“Team CFA”) exist in three states; five, including advisory council member Maimone’s school, are in rural western North Carolina.

CFA schools use the Core Knowledge curriculum developed by E.D. Hirsch, a leading conservative critic of public education. John Bryan, a retired businessman with libertarian views, controls the Challenge Foundation. According to N.C. Policy Watch, Bryan is associated with the billionaire Koch brothers and Americans for Prosperity, the conservative organization they created. Raleigh businessman Art Pope, whose millions pay for conservative causes throughout North Carolina, sits on the AFP Foundation national board with David Koch.

In short, there’s an industry offering public schools like you’ve never seen them, and the impact on traditional public education could be, as Ravitch warns, profound.

Until they withdrew, for example, a Challenge Foundation-associated group called Pinnacle Classical Academy was among the finalists seeking to open a charter school this year in Cleveland County. Their application prompted an impassioned letter to the state charter advisory council from Bruce Boyles, the Cleveland schools superintendent. “We have had experience with other charters affiliated with [the Challenge Foundation] in our area,” Boyles wrote. “While there has been some cooperation … we have encountered instances of charter school representatives from these schools recruiting students from our district.

“While I certainly understand the need for charters to recruit, we find their recruitment is for the brightest, most talented students. These practices appear to discriminate against certain ethnicities and students with profound special needs.”

The bottom line, as Boyles warned, is that if state officials aren’t careful about which charter applicants they approve, they’ll be allowing charters to “accept only the easy-to-educate or more affluent students [while placing] an undue burden on the traditional public schools.”