Can a For-Profit Entity Manage a School Which Is Not For-Profit ?
In Brackbill v. Ron Brown Charter School, 777 A.2d 131 (Pa. Cmwlth. 2001), the Court rejected the District's argument that control by a for-profit corporation would violate Section 1720-A of the CSL, 24 P.S 17-1720-A, which limits the grant of charters to a school organized as a public, nonprofit corporation.
Relying on this Court's decision in West Chester Area School District v. Collegium Charter School, 760 A.2d 452 (Pa. Cmwlth. 2000), this Court concluded that a charter school board's contracting with a private, for-profit corporation to manage the school did not run afoul of Section 1720-A's requirements.
In Brackbill, the charter school at issue was the one also involved in this appeal, and West Chester also involved a charter school that was managed by Mosaica.
The Court reasoned in Brackbill that:
The Charter School Law (CSL) provides that a charter may be granted only for a school organized as a public, non-profit corporation; charters may not be granted to any for-profit entity.
Yet, there is no question that the CSL permits a charter school to be established by "any corporation," even if that corporation is a for-profit entity.
Therefore, as conceded by Petitioners, Mosaica was legally eligible to complete and submit the charter Application for Collegium.
Clearly, however, the legislature did not want to entrust the management and operation of the charter school itself to entities seeking to make money from the school's management and operation; rather, that power is granted to the charter school's board of trustees who, as public officials, have a single purpose to promote the interests of pupils....
However, the CSL does not prohibit charter schools from contracting out certain management and administrative responsibilities to a for-profit corporation.
Rather, the CSL grants charter schools all powers necessary or desirable for carrying out its charter, including, but not limited to, the power to acquire real property by purchase or lease and the power to make contracts or leases for the procurement of services, equipment and supplies.
Thus, the Charter School Appeal Board properly concluded, nothing in the CSL prohibits the involvement of for-profit entities in the establishment and operation of a charter school, so long as the school itself is not for-profit, the charter school's trustees have real and substantial authority and responsibility for the educational decisions, and the teachers are employees of the charter school itself. Brackbill, 777 A.2d at 136 (quoting West Chester, 760 A.2d at 468).