In Hoboken, Charter Schools Rule: Part II

Here are links to all parts of this series:

• Part I - Hoboken's charters amass social and political capital, helping them thrive.
• Part II - Hoboken's charters raise substantial outside funds, casting doubt on the claim"we do more with less."
• Part III - Hoboken's charters pay their teachers less, because they have less experience. 
• Part IV - We can't have a serious conversation about charters -- in Hoboken or elsewhere -- until we are honest.

As I said in Part I of this series: Hoboken is, to me, one of the two most interesting communities in America currently dealing with charter school proliferation (the other is York, PA). The city's three charter schools serve a completely different student population than the public schools (click to enlarge):

And when you account for these differences, the results they get are actually quite average:

Yet the city's charter sector thrives. The reason, I contend, is that Hoboken's charter school parents have access to political, social, and financial capital unavailable to most of the city's public school parents. As former Hoboken BOE President Leon Gold explains:

But the HoLa parents are so organized — and they represent, again, the richest and the brightest of Hoboken — that they talked her [Mayor Down Zimmer] into writing a letter in support of HoLa. [emphasis mine]

HoLa is the Hoboken Dual Language Charter School. As reported by local blogger Graphix Avenger, the school's supporters have leveraged their political capital and connections to facilitate HoLa's expansion over the objections of the local school board, which is concerned about the fiscal impact of the school's growth.

But political savvy is only one of the advantages Hoboken's charters have over the Hoboken Public Schools (HPS)...

One of the claims of charter schools -- especially in Hoboken -- is that they "do more with less":

As one of the first charter schools in New Jersey, Elysian Charter School of Hoboken (K-8) opened its doors in 1997. Recognized by then Governor Christine Todd Whitman in her 2001 State of the State Address, Elysian has been a pioneer in the charter school movement for more than 15 years.

However, as a charter school, Elysian is seriously under-funded, receiving far less money and resources compared to the other public schools in the state.

We do more with less, but with your help we can do even more. The money we raise is put towards

• Facilities Improvements and Upgrades
• Technology
• School Trips, Athletics and Cultural Events
• Library Resources
• Arts and Sciences Resources

Donations are tax deductible and are accepted from individuals, corporations and foundations. [emphasis mine]

To be clear, this is NOT an appeal directly from Elysian CS; no, this is from the website of the "Friends of Elysian Charter School of Hoboken," a non-profit, 501(c)(3) organization "with the mission of raising funds that will benefit Elysian Charter School of Hoboken."

Each of the charters in Hoboken have similar auxiliary organizations whose sole purpose is to provide support for their aligned charter school. And each of these organizations is a 501(c)(3), which means you can go to GuideStar and view their Form 990s, the standard tax filing documents for nonprofit organizations.

A short perusal makes clear that the "doing more with less" claim is, at best, incomplete:

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- Friends of Elysian Charter School: At the beginning of 2011, FOECS had assets of $68,211; by the end of 2013, that nest egg had grown to $310,224. According to its website, the group relies heavily on Elysian's parents for support:

The goal of the 2014 Annual Appeal is to raise $50,000 in cash and pledges and to secure 100% participation from Elysian families and staff. It only takes $1 to participate in this important fundraiser for Elysian so please join the effort to help our teachers, staff and children. The Appeal begins on January 15, 2014 and will close on May 15, 2014.

2013's "Golf Outing" grossed revenues of $90,092 (offset, however, by expenses of $81,499). The group has many corporate donors, including Goldman Sachs, Moody's, Barclay's, and Wells Fargo (remember: Manhattan is only a PATH ride away from Hoboken). No doubt this support helped in raising an additional $121,721 in direct donations in 2013.

What's interesting about FOECS is that they can sit on this big pile of money, yet only give $6,627 in "Elysian Charter School Program Support" in 2013 (in contrast, the group gave $31,926 in 2012). The reason, I'm supposing, is that the group can act as a repository for building a capital fund for the school that is free-and-clear from the school's own operating budget.

I'm no financial expert, but this strikes me as a very savvy move, especially since the group can now invest its funds and reap the returns. Good for them -- but I doubt a public school district would ever be allowed to do the same.

- Friends of Hoboken Charter School: The 2012 Form 990 shows net assets at $392,218 -- but that's just part of the picture. The group holds total assets of $4.2 million, with liabilities of $3.8 million. The reason is explained at the top of the form in the mission statement:

ACQUIRED A SCHOOL BUILDING IN HOBOKEN, NJ FOR STUDENTS OF THE HOBOKEN CHARTER SCHOOL & PROVIDE FUNDS FOR RENOVATIONS & FUND OTHER PROGRAMS FOR THE STUDENTS ND TEACHERS OF THE SCHOOL.

So FOHCS owns the building, which it rents to the school. All perfectly fine, and a good deal for HCS: the Friends took a rental loss of $260,794 that tax year (part VIII, line 6c). Even still, the school received an additional $59,174 in support from the Friends that year.

FOHCS's big fundraiser in 2012 was its "Fall Festival," which grossed $103,537 (less $15,861 in expenses).

- HoLa PTO: This group's net assets are quite small: $5,100 as of the end of 2012. Of course, their facilities issues are quite different from the other charters in Hoboken; consequently, the group gave its charter school $86,660 for renovations that year, and another $29,300 for "computers, books and supplies for school programs."

The HoLa PTO's events grossed $153,485 in 2012 (offset by $36,605 in expenses).

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I did a little back-of-the-envelope calculating on all of this activity. If you add up the increases in net assets, the rental losses, and the program supports to the charters from each of these auxiliary groups,  the total over three years is roughly $1.1 million. That is a significant number. But let's stop a minute and add a few caveats:

I am a New Jersey suburban public school parent, which means I pay a hefty amount in property taxes to support my kids' education. But Mrs. Jazzman's and my contributions hardly stop there.

Our school district, like so many others, has a local education foundation, which draws local donations and allows the public schools to increase spending on all sorts of operational and capital items. Every school has a Parent-Teacher Organization, which raises funds for all sorts of programs. There are athletic booster and band booster and drama booster and all sorts of other booster organizations.

And there are a host of organizations, both non-profit and for-profit, that work along side the schools to provide programs for the children of the community: Little League, soccer clubs, dance studios, music studios, martial arts studios, Kumon, Sylvan, swim clubs, libraries, scouts, church groups, and on and on and on.

Many of these organizations take their donations largely in volunteer time from parents; many collect fees, sometimes quite substantial. If we're going to have an honest accounting of the costs involved in educating a child -- the whole child -- we should include all of these expenses.

My point here is that I would never say that what the parents of Hoboken's charter schools are doing is in any way wrong; in fact, I would be shocked if these organizations didn't exist. Of course parents hold fundraisers for their kids' schools; of course they leverage their connections to benefit programs that serve their children. Any parent who loves their child and has the means does this. There is nothing wrong with this.

But here's the thing:

I don't see anyone rational making the claim that suburban schools "do more with less" when their communities spend so much on their children's entire education -- yet that is the precise claim of Hoboken's charter sector.

One of the myths of charter school funding in New Jersey -- often perpetuated by groups with little understanding of how school financing works -- is that charters get less funding than they should because they are denied access to state aid and debt service available to public school districts.

Leaving aside the point that charters shouldn't get much of this aid (why should a charter school get transportation aid if it doesn't pay for transportation costs?), the truth is that charter school funding "gaps" are much more the product of differences in student population characteristics, which the state uses to calculate aid shares. This is a big topic and I'm working now on some pieces to bring this issue into focus.

My point here is that charters have often used their "gap" in funding to justify their "doing more with less" claim. But that's incorrect for two reasons:

1. The student populations of charters are not the same as the populations of public district schools -- especially in communities like Hoboken.
2. There is often all sorts of additional spending on behalf of charter school students that is never counted in comparative spending calculations -- especially in communities like Hoboken.

Which is why the fiscal impact on public schools is so great when charters claim a greater and greater share of the student population. Yes, the districts lose economies of scale. Yes, the differing student populations create an imbalance where higher-cost students are concentrated in the district schools.

But another impact of characterization is the concentration of social, political, and financial capital in the service of some students but not others.

This is the sort of stuff, by the way, that drives me nuts when I hear folks like State Senator Mike Doherty or the Star-Ledger's Paul Mulshine or Governor Christie rail on about the "waste" in our urban schools -- as if the playing field were anywhere near level between the cities and the suburbs. Teenagers from West Windsor understand that the lives of children in different places are vastly different, and much of that difference occurs outside of schools, yet these three august gentlemen appear to be totally clueless.

Now, there is an argument that can be made that charter schools are one of the only mechanisms left to keep middle-class parents in cities like Hoboken. It's an argument I thoroughly reject -- but at least it's honest. 

It's an argument that also has the effect of keeping suburban critics of urban charters humble; you can't be against urban charters without having some sort of vision for schools that are fully funded and fully desegregated. That is, however, a long, hard slough, and it's one reason why I have been very careful not to impugn the motives of those parents who send their children to charter schools. You must always do what is right for your child, and no student should have to sacrifice their education to make a political point.

No, my critique remains the same as it has always been: too often, charter cheerleaders are not being honest with themselves and with the public about why their schools are "successful."

And, too often, these charter boosters have let their passions for their schools blind them to the damage they may be doing. Part III in a bit...

Hoboken - what a view.