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National Heritage Academies makes money for themselves, but no sense for taxpayers | Crazy Crawfish's Blog
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Zesty Louisiana Education Politics
National Heritage Academies makes money for themselves, but no sense for taxpayers
Posted on January 15, 2015
In the 2012-2013 school year Inspire charter Academy, one of National Heritage Academies schools in Baton
Rouge La, took in 6.8 million dollars in revenue from state and federal sources according to their own records. Of
that 6.8 million, only about 1.3 million went towards teachers and their salaries. Approximately 2.8 million was
classified as instructional expenditures, or about 40%. The remaining 60% went towards management fees, rent
and profit. For the same school year, East Baton Rouge Parish (EBR) spent 200 million on instructional
expenditures out of 400 million in revenue or 50% of their budget. Without delving too deeply it is clear that the
school district spends more on their students that this charter school.
The rent on the building Inspire is leasing from itself at 5454 Foster Dr. is a little over 1 million dollars a year. The
building they acquired is valued at around 5 million according to the assessed value. Inspire has a 5 year charter
that is up for renewal for another 5 years at the EBR school board meeting tomorrow. With the rent they have
paid to themselves out of the taxpayer funded MFP and Federal Funds an ordinary school district could have
purchased the building outright, and owned a 5 million dollar building. NHA will continue to lease this building
at 1 million dollars a year (or more) to itself for as long as it stays in business. Even though some charter schools
calls themselves “non-profit”, there are still plenty of ways to make money off the charter school. For instance,
if/when NHA pulls out or loses its charter the parent corporation will retain ownership of a 5 million dollar
building purchased with tax payer funds (that factor in building costs and maintenance) and EBR will have
nothing.
Another way charter schools like Inspire make money is by collecting money that factors in costs that they do not
incur. For example, in EBR, 7% of revenue goes towards transportation. NHA schools make the claim they want
to have neighborhood schools and so don’t provide transportation. Here is a statement made by a board member
of NHA run Willow Academy in Lafayette from the advocate.
http://theadvocate.com/home/8410250-125/story.html
The location is within walking distance for students the school targets, said Jay Miller, a member
of the charter school’s board, Louisiana Achievement Charter Academies.
“We’re not providing bus service, so we felt it was essential that neighborhood kids would have an
opportunity to come to school and have easy access to the school,” Miller said.
The problem with this statement is that Willow Charter Academy is in a Mall shopping center parking lot,
surrounded by 4 and 6 lane highways on all sides. There are no nearby subdivision except for one which is
blocked by an impenetrable forest. Kids would have to walk for quite a while along dangerous and busy roads in
rough parts of town to get to Willow, even if there were crosswalks and crossing guards. Parents that want their
kids to attend must drive their kids to school. This arrangement allows NHA to pocket the money other districts
spend on transportation, while also excluding the neediest students, those students without parents with reliable
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transportation, thus improving their demographics and lowering the higher costs associated with educating the
poorest of the poor students.
I use this as an example to show how NHA operates in general. Some schools are closer to subdivisions and some
kids might be able to walk. Most can’t walk to Inspire or to NHA Advantage at 14740 Plank Road in Baker. Inspire does not appear to have made many efforts to make their campus accessible to the “walking” community
either.
One of the ways charter schools try to appeal to the public is by making the claim that they will improve
educational outcomes for students over what they would receive in the traditional school districts. While we can’t
verify or disprove that claim for Willow Charter Academy yet, we do have some years of data for Inspire and EBR. The district score for EBR, which loosely ties to the average of all SPS Scores, is 81 for 2014
Inspire’s score is just above an F, and only because it received 6 of LDOE’s mysterious Bonus/Progress Points that
appear to have rewarded it for declining from 2013 to 2014, while other schools that actually improved their SPS
scores by more than 10 points (on their own) received no bonus/progress points. How ironic that the schools that
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actually made progress received no progress points to their overall score but Inspire actually declined and got 6.
Wow.
LDOE has always been known for their creative use of math, but this seems either arbitrary or some interesting
favoritism. Remove the arbitrary Bonus / Progress / Favoritism points and Inspire had a 52 in 2013 last year and
a 51 in 2014. Now that’s some progress.
While NHA Inspire is obviously not the worst charter school in EBR, it is worth noting that it scores 30% lower
than the overall EBR system, and that with receiving “progress points” while actually declining. This is after 5
years so it’s not like this is a new operator taking over a failing school. This is a new school.
So how does this scheme work I wondered? Fortunately there are current and former employees willing to speak
out.
NHA does not pay teachers or administrators very well, but promises bonuses when enrollment
targets and test score targets are met. They build schools in areas where the current schools are
rated low (Inspire) so that it doesn’t take much convincing to get people to come. But then the
added bonus of a gift card for families and stipends for administrators when they meet or exceed
an enrollment goal is held out there. In my short time at Inspire, I made over $8000.00 in
enrollment bonuses.
Very little money is spent on educational materials; even less on technology. But they do like those
gift cards – they send them out twice a year as employee “incentives”
In my [redacted] years in this business, I have been in a lot of schools in a lot of districts. Very few
have been as controlling as the NHA schools. And when I asked about the lack of technology, I was
told that there is no research to prove that it leads to higher test scores, so that’s not where they
invest their money.
Willow has been started by a group of young administrators from Atlanta who were paid very
large bonuses and housing allowances to relocate here for a year or two. My friend is [redacted]
appalled at the lack of emphasis on the children. It’s all about the testing and meeting targets so
that more money can be made.
I actually already did a story on NHA and their gift card bounty/bribery program for encouraging people to enroll
in their schools. If you would like to see some examples of their gift card scheme take a peek below.
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https://crazycrawfish.wordpress.com/2014/11/14/charter-schools-are-now-paying-kids-to-try-them-out/
I found another example of how NHA saves money from this source’s information. If you don’t spend money on
computers you can pocket that money too. Who needs computers or an education on how to use them anyway? I
hear computers are just a passing fad, so maybe NHA is right to keep kids from learning how to properly use
computers in a controlled environment.
The point is, NHA and other charter operators like them, are not focused on doing any more than will keep them
in the school business. Their business model is to muddle along and vacuum up as much money as they can in the
process.
I can’t go into all the schemes large scale charter operations like NHA and Charter Schools USA use to scam
taxpayers. I’m not that creative or dastardly. However there are plenty of folks that are. Perhaps you should
attend one of the meetings like the one mentioned below to find out all the ways you can make loads of money by
selling and leasing back real estate to yourself and other important education stuff.
From: “Mara Kane”
Date: January 6, 2015 at 2:02:14 AM CST
To: (deleted)
Subject: Meet Our Speakers – For­Profit Education Co.’s for PE Investors – Jan. 14
Conference Dear (deleted),
Investors are encouraging for­profit education companies to restructure debt, sell and lease back
real estate, implement efficiency improvements…even improve relationships with regulators who
worry about the cost­benefit gap of the schools’ curriculums.
In addition, investors are increasingly focusing on service providers that are targeting for­profit
education — from marketing and enrollment services to course instruction and fundraising.
In short, after a rough patch, the future of the for­profit marketplace is brightening, and this
Capital Roundtable conference will highlight the ways many middle­market investors are doing
well.
Register Now for Private Equity Investing in For­Profit Education Companies on
Wednesday, January 14.
Meet the Chairman & Our Speakers
Our chairman, Jeff Keith, is operating partner of Chicago­based Sterling Partners. He has more
than twenty years of experience leading finance and operations teams, with a wide range of senior
executive roles under his belt.
Jeff will be joined by 20 other senior industry professionals, including —
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Philip A. Alphonse, Partner, Vistria Group
James A. Bland, Partner, HCP & Co.
Ryan Craig, Managing Director, University Ventures Fund
John M. Larson, Executive Chairman, Triumph Higher Education Group
Robert Lytle, Partner & Co-Head — Education Practice, The Parthenon Group
Malcolm P. Youngren, Dir. — Online Education, Quad College Group
Click here to see the full speaker list
Need more information? Contact Joanna Russell, at 212­832­7300, or
[email protected].
Looking forward to seeing you,
Mara Kane
Producer, The Capital Roundtable
[email protected]
212­832­7300
Feel free to give these guys a call and let them know what you think about their “business model”; that involves
our children and tax dollars. I will give this to them. We really are being schooled.
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About crazycrawfish
I am a former Louisiana Department of Education employee. I was one of the principal student data folks for the better part of a
decade. You can find my blog at crazycrawfish.wordpress.com
View all posts by crazycrawfish →
This entry was posted in politics and tagged Advantage Academy, charter schools, East Bton Rouge, EBR, Inspire Academy, Nation Heritage Academies, NHA, Willow
Academy. Bookmark the permalink.
8 Responses to National Heritage Academies makes money for themselves, but no sense
for taxpayers
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Nicholas James says:
January 15, 2015 at 10:13 AM
0 0 Rate This
Interesting article.
Request the following:
1: Article summarizing all the Charters.
— Focus on school performance.
—- Which of the Charters need to be renewed.
—- Which of the Charters need to be substantially improve.
—- Which of the Charters need to be revoked.
Suggest that the School Board should be closing/putting new managmenet in on 10% of the bottom charters every year.
Reply
crazycrawfish says:
January 15, 2015 at 10:21 AM
0 0 Rate This
I’m not sure many of those ideas are practical or legal under existing laws. As these new charters come in and
create their own buildings and lease them back to themselves, how exactly would you close that school and put in a
new operator? As public districts and assets disappear, future options for addressing problem schools become very
limited. What staff will you use to evaluate these schools? Where will the kids go if all your schools are failing in
the future? If you close schools that no longer belong to the public you create a huge capacity problem.
Reply
Nicholas James says:
January 15, 2015 at 10:19 AM
0 0 Rate This
2: Score Sheet Critique.
— There is a detailed score sheet for INSPIRE
—- I had looked over it, but it is difficult to tell where they stand from the score sheet.
—- The ‘bonus points’ were for working with, ahm, kids way behind the curve.
—- It is unclear why their performance decreased in the last year.
——- Did they take in a new batch of ‘kids behind the curve’
In return for the reduced regulation, the Charters goal is to take the ‘tier 3′ kids (their term from the score) and bring them
up to spec.
INSPIRE has 70-80 kids per grade.
— But they still have substantial kids below grade level.
— We would almost have to follow the progress/lack of progress of each kid.
— Are the ‘tier 3′ kids from kindergarten now ‘tier 1′ in third grade?
—- Probably not from the scores.
Reply
Nicholas James says:
January 15, 2015 at 10:20 AM
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0 0 Rate This
3: Charter Closure policy
– If a Charter school fails.
— What is the School board policy for closing the school or replacing the Charter operators.
Reply
crazycrawfish says:
January 15, 2015 at 10:26 AM
0 0 Rate This
It varies by type of charter. You can’t replace them if they own the building. You can approve another
operator who will have to build a new school, but as this movement progresses the public will have very
few options or leverage to use on charters. Then these charters will start milking these schools even more
and we will have to pay, regardless of how they perform.
Reply
Nicholas James says:
January 15, 2015 at 10:25 AM
0 0 Rate This
4: Funding of Charters/Location of Charters
– The above ‘schooling’ is more a problem on how the School
 Follow
Board funds the schools and less on the Charter.
Follow
— My understanding is that the School
is given“Crazy
funding on a per head basis. Approximately $10,500/year/kid.
Crawfish's Blog”
— If a Charter is being run so that the
Get
costs
every
arenew
substantially
post delivered
less, then a percentage of those savings should go to the tax
to
your
Inbox.
payers.
Join 2,391 other followers
— NHA begs the question. We are not seeking to shut down our public schools and replace them with nationally run Charters
Enter your email address
run out of foreign locations.
Sign me up
— We want groups of local teachers/administrators grouping together to form a Charter to educate the kids in such a manner
that the structural problems plaguingBuild
the apublic
school system are bypassed and the kids are raised to ‘tier 1′ level.
website with WordPress.com
— If I gave someone $10,100 to educate a single child for a year in a ‘home school’… i would expect them to be brought up to
their capabilities in that time period. That is a lot of money down the drain.
— The accounting reports of the Charters need to be improved.
Reply
crazycrawfish says:
January 15, 2015 at 10:32 AM
0 0 Rate This
It won’t matter. This is a business now and charter schools don’t have to do very well to keep their charters. As
more and more come, it becomes that much harder to disengage and the standards will trend lower and lower.
Benefits and pay will decline. These schools don’t have retirement programs or teachers with many years of
experience. Being a teacher will require less and less education to fill the need for people to take teaching jobs in
ever declining conditions.
Reply
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