Wednesday, May 1, 2013

Incubate for America?

by Ethan Gray

If you have a winning idea for a new business, the United States has the needed infrastructure to get the business off the ground. There are venture capital markets, economic development councils, mentorship programs, chamber of commerce programs, and myriad other supports to help your business idea become a reality.

But what if you want to design and launch a new charter school? Where do you go for help? For a long time, there was no good answer to that question. Now, however, a new breed of organizations—charter school incubators—is emerging in cities across the United States, bringing some private-sector strategies to the charter school start-up scene.

In theory, there should be lots of money for charter start-ups. New schools are one of the best ways funders can leverage their dollars. Unlike many education reforms that are perpetually dependent on philanthropy, after a school is opened, it receives public funding to sustain its operations. Despite the favorable economics, however, many funders stay away from new schools because there is no guarantee that the schools will either make it through the tough start-up phase or achieve strong results. Who wants to be an angel investor for a lousy school?

Charter school incubators seek to improve the odds that new starts will succeed.

Incubators recruit, competitively select, and support high-quality school founders as they design and build new schools in specific locations. By investing in or developing talented school leaders and connecting them with local networks of support, incubators are betting that they can increase the likelihood that new schools will perform well.

Incubators have expertise in the start-up process and can help new leaders navigate the particular challenges inherent in starting new schools. They provide training or support for leaders as they build charter boards, locate and develop facilities, recruit great teachers, and make connections with other local funders and stakeholders.

Most incubators offer some financial support—usually a salary and benefits package for school founders—to woo top talent. Their major emphasis is on a rigorous up-front quality screen. Unlike other charter support organizations, incubators do not serve all who apply; they serve only the very best of their applicant pools.

Who Are the Incubators?

The Cities for Education Entrepreneurship Trust (CEE-Trust), the initiative I lead, is a network of city-based education reform organizations. During the past couple of years, we have built a workgroup that includes nearly every geographically focused incubator across the United States, including the following:

  • New Schools for New Orleans
  • New Schools for Baton Rouge
  • The Mind Trust in Indianapolis
  • Get Smart Schools in Denver
  • Charter School Partners in Minneapolis–St. Paul
  • E3 Rochester in New York
  • The Tennessee Charter School Incubator in Nashville and Memphis
  • The Teaching Trust in Dallas
  • Rhode Island Mayoral Academies

A few other organizations also are involved in incubation. For example, some CEE-Trust incubators partner with Boston-based Building Excellent Schools to recruit, select, and train their school leaders. In addition, many of the top charter management organizations (CMOs) in the United States incubate their own leaders through in-house development programs.

What Does the Research Say?

The literature on incubation is pretty limited so far. In September 2011, Public Impact produced a paper for the National Charter School Resource Center on charter incubation that included snapshots of many incubators affiliated with CEE-Trust. Public Impact’s Joe Ableidinger and I also led an interactive webinar on the topic for the Resource Center in September 2011. And in December 2011, CEE-Trust and the Thomas B. Fordham Institute published a policy brief—also written with Public Impact—exploring how charter school incubators were accelerating the smart growth of the charter sector. In the brief, we profiled many of the leading incubators and discussed the ways policymakers at state and federal levels could create better conditions for incubators to help start more schools.

Unfortunately, there have not been any studies of the impact of incubators. Incubation is a classic example of why education is a difficult social science. There is really no way to do a double-blind study to prove that incubation actually increases the likelihood that new schools succeed. But early evidence suggests that incubation is a promising strategy.

According to New Schools for New Orleans, the organization has incubated the highest-performing high school and elementary school in the city’s Recovery School District. Get Smart Schools says that growth rates are higher than district averages at all 11 schools it incubated for which data are available. The Mind Trust, Charter School Partners, New Schools for Baton Rouge, and E3 Rochester are all too new to have data.

What Does It Cost?

The costs of incubation vary by both location and program. The Mind Trust offers $1 million and local support to competitively selected leadership teams that aspire to start charter school networks in Indianapolis. Other incubators that offer funding make investments in individual leaders or teams between $200,000 and $500,000. Some incubators, such as Get Smart Schools, do not offer money but maintain university affiliations and offer leadership degrees for new school founders or significant in-kind support.

The costs of incubation are driven largely by an incubator’s theory of change and market realities. The Mind Trust’s theory of change is that big money (plus a pro-charter state policy environment) will attract top talent. The Mind Trust is not interested in developing new leaders as much as it is interested in recruiting the best and brightest from across the United States. Get Smart Schools and Charter School Partners focus more on leadership development. With more limited funding but a strong university partner, Get Smart is tapping into a different talent pool and market segment to develop the next generation of charter leaders in Denver. The Tennessee Charter School Incubator is operating an incubation program for turnaround leaders because of the market opportunity created by the emergence of the new Tennessee Achievement School District.

For funding, incubators turn to a mix of local and national sources. The Mind Trust raised operating funds for its incubator from a local corporate philanthropy, while raising money for the incubator awards themselves from a mix of national and local foundations, the Indianapolis mayor’s office, and several individual donors. New Schools for New Orleans has raised money from local and national foundations and won a $28 million federal Investing in Innovation grant to expand and replicate its incubation efforts.

The Big Picture

For the past decade, CMOs have been the charter sector’s strategy for achieving scale. CMOs, it is thought, will innovate early on, figure out what works, then rapidly scale or franchise across the United States. But it turns out that scaling a school model is much harder than scaling a business franchise. Training founding principals, finding high-quality teachers, accessing facilities, raising start-up funds, and navigating different state funding and policy landscapes are just a few of the many challenges CMOs must navigate in the scale-up process.

In 2010–11, according to the National Alliance for Public Charter Schools, CMOs served only 19 percent of the students enrolled in charter schools nationally. Although civic leaders in the United States would like nothing more than to be able to replicate successful schools from networks such as the Knowledge Is Power Program or YES Prep, the reality is that there are not enough high-quality CMOs with massive scaling plans to meet the demand. CMOs will continue to play an important role in driving the growth of the charter sector, but civic leaders would be wise to consider other ways of driving smart growth.

Even though you do not hear a lot of talk about charter incubation yet, you will soon. As cities such as New Orleans prove that vibrant charter districts can drastically improve student outcomes, civic leaders and funders in other cities will need to consider ramping up their support for burgeoning charter sectors. If the first generation of incubators can prove that they increase the chances that new schools will succeed, then smart funders will look to incubation as a way to turn dollars into better outcomes for kids.


Ethan Gray is the executive director of CEE-Trust, a national network of 29 city-based nonprofit organizations, foundations, and mayors’ offices across the United States that support education reform. CEE-Trust acts as a convener, a collaborator, and a consultant, helping its member organizations accelerate the pace of education innovation and reform in their cities. Before leading CEE-Trust, Gray was vice-president of The Mind Trust in Indianapolis. He also worked as the policy director at Be the Change Inc. in Cambridge, Massachusetts, where he helped craft a policy agenda to expand national and community service opportunities that strongly influenced the introduction of the Edward M. Kennedy Serve America Act of 2009.

Gray is an honors graduate of Harvard College and holds a master’s degree in educational policy and management from the Harvard Graduate School of Education. He serves on the advisory board of Innovative Schools in Wilmington, Delaware, and was a special advisor to the Kauffman Foundation’s Education Ventures Lab.