Executive Summary

What sets charter schools apart from other public schools is their charter — a contract with a state or local agency that provides the school with public funds for a specified time. This contract frees charter schools from a number of regulations that otherwise apply to public schools. In exchange, the charter schools are accountable for improving student performance and achieving goals set out in the charter.

This Third-Year Report of the National Study of Charter Schools provides descriptive information on charter schools that were operating in the 1997-98 school year. Subsequent reports of the National Study will address broad policy issues concerning the charter school movement and its potential effects on America's system of public education.

Growth Trends: The charter movement continued to expand in 1998

An additional 361 charter schools opened in 1998, bringing the total to 1,050 charter schools in operation in 27 states plus the District of Columbia. Including multiple branches of a school operating under the same charter, the total number of charter school sites operating was 1,129 as of September 1998.
The demand for charter schools remains high — 7 of 10 report that they have a waiting list.
Thirteen charter schools closed in 1997-98. In total, 32 charter schools — which is about three percent of all charter schools — have closed since the first charter school opened in 1992.
The number of students in charter schools increased in 1997-98 by about 50,000, bringing the total to about 160,000 students. This total represents only 0.6 percent of all public school students in the 23 charter states plus the District of Columbia that had open charter schools as of June, 1998.
During the 1998 legislative session, four new states — Idaho, Missouri, Virginia, and Utah — passed charter legislation, bringing the total to 33 states and the District of Columbia ¹. Several charter states amended their laws — two increased the number of charters that can be granted; two expanded the number of agencies allowed to grant charters; one that previously only allowed pre-existing public schools authorized newly created charter schools; two authorized funds for capital improvement needs of charter schools; and one state increased the length of the charter term.

Characteristics of Charter Schools: Most charter schools are newly created, small schools. The charter schools that opened during 1997-98 were more likely to be newly-created, small schools than charter schools opening in prior years.

Even more so than in the past, recently opened charter schools are small. Currently, the median enrollment of all charter schools is about 132 students per school, whereas all public schools in the charter states have a median of about 486 students. The median size reported in the Second-Year Report was about 149 students per charter school.
Many charter schools have atypical grade configurations. For 1997-98, one of four charter schools spanned K-12, K-8, or were ungraded compared to fewer than one in ten with similar configurations for all public schools.
Seven of ten charter schools are now newly created schools, compared to six of ten for 1996-97. These schools are smaller, on average, than converted pre-existing public schools. Nine of the 33 states with charter laws allow private schools to convert to charter schools. Private school conversions represent 11 percent of all charter schools.
Most charter school teachers are certificated, but in those states that allow non-certificated teachers charter schools have a somewhat lower percentage of certificated teachers than charter schools in other states.
About two of three charter schools of a subsample of charter schools had a student to computer ratio of fewer than 10 students per computer. The National Study estimates a median ratio for all charter schools of 6 to 1.

Students of Charter Schools: Nationwide, students in charter schools have similar demographic characteristics to students in all public schools. However, charter schools in some states serve significantly higher percentages of minority or economically disadvantaged students.

Our data contain no evidence that charter schools disproportionately serve white and economically advantaged students.
White students made up about 52 percent of charter school enrollment and about 58 percent of public school enrollment in 1997-98. These figures are the same as in 1996-97.
Charter schools in several states — Connecticut, Massachusetts, Michigan, Minnesota, North Carolina and Texas — serve a much higher percentage of students of color than all public schools in those states.
Seven of ten charter schools have a student racial/ethnic composition that was similar to its surrounding districts. About 16 percent of charter schools serve a higher percentage of students of color than their surrounding districts.
The estimated percentage of LEP students in charter schools is 10.1 percent, which is a slight drop from the 12.7 percent reported for 1996-97. The comparable figure for all public schools in the 23 charter states and the District of Columbia is approximately 10.7 percent.
Without regard to differences across states, the reported percentage of students with disabilities at charter schools is 8 percent, which is somewhat less than the 11 percent for all public schools in these states.

The Founding of Charter Schools: Most charter schools aim to realize an alternative vision of schooling.

Nearly seven of ten newly created charter schools seek to realize an alternative vision of schooling, and an additional two of ten were founded especially to serve a special target population of students. Four of ten public schools report that they converted to charter status in order to gain autonomy from district and state regulations.
Many private schools that converted to charter status sought public funds so that they could stabilize their finances and attract students.

Challenges Implementing Charter Schools: Practically all charter schools have had to overcome obstacles during their development.

Most charter schools continue to cite resource limitations as a serious implementation difficulty.
Newly created charter schools were more likely to cite resource limitations as a major difficulty than pre-existing charter schools.
About three of ten charter schools that were formerly public schools reported that state or local board opposition or regulations presented obstacles to their school's implementation. About one in five schools that were formerly public indicated that they had difficulty with teacher unions or collective bargaining agreements.

Autonomy and Accountability: Charter schools, particularly newly created ones, have considerable autonomy. They provide standard financial and student achievement reports to different constituencies depending on the state's approach to accountability.

The majority of charter schools felt they had primary control over most areas critical to school operations. Fewer charter schools felt they had control over student admissions, budget, student assessment, and school calendar. Compared to newly created charter schools, a lower proportion of pre-existing public schools said they had primary control.
Most charter schools provide one or more non-instructional services (e.g. health services, social services, and before and after schools care). Three of ten newly created charter schools that provided services chose to provide services themselves, with the remainder provided by districts and other outside providers. In contrast, about six of ten pre-existing charter schools rely on districts. Pre-existing private schools were equally likely to provide services themselves and use an outside provider.
Nearly nine of ten charter schools were monitored for accountability in terms of financial accounts; seven of ten for student achievement and for student attendance; and six of ten for compliance with regulations and instructional practices.
The states differ greatly in how they approach accountability, with some following a "centralized" state agency approach, others a "market" driven approach, and still others a "district-based" approach that relies on local accountability within a framework of state testing.
More than 80 percent of charter schools (based on a subsample of schools) said they made reports during the 1997-98 school year for accountability purposes to one or more constituencies, including their chartering agency, school governing board, state Department of Education, parents, the community, or private funders.
Almost 90 percent of charter schools (based on a subsample of schools) used student achievement tests, augmented by other measures of student performance and school success to make reports to their chartering agency, the schools governing board, and/or parents.

¹New York enacted charter legislation in December 1998.
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