Charter school CEO pay: Let’s clear up the confusion

To an observer on the outside, a public charter school in DC can look like the neighborhood DCPS school nearby. Kids stream in the doors each morning. There’s artwork decorating the windows. There’s a playground around back. Beyond the front door, however, some key differences distinguish charter schools from traditional public schools.

One of the biggest areas of difference is in the responsibilities of the charter school’s leader, the resources they have to pay teachers and manage the school, and where those resources come from. As an advocate for DC’s charter schools, I often have to explain these differences — in some cases, they’re outright inequities — to our city’s news reporters, policymakers and other people who haven’t yet clued in to the unique characteristics of these public schools that came on the scene nearly 30 years ago.

People frequently conflate the role of a charter school CEO with the job of a principal or administrator in a traditional public school. They are both vital, but very different, jobs. A charter executive director or CEO is a hybrid of school chancellor, school principal and, depending on the day, human resources director, food service manager or custodian. Because they’ve been entrusted with the autonomy to lead a public school independent of any centralized bureaucracy, the charter school leader is charged with a range of responsibilities that in a traditional system are generally handled by multiple (dozens!) of people. In fact, for DCPS schools, there are whole other parts of the District government that provide specialized support to help them.

Building maintenance is a great example. In DCPS schools, much of this work is outsourced to the Department of General Services. For better or for worse, the system benefits from the government’s economies of scale. For a charter school CEO, if, say, the school’s roof is leaking, they go through a procurement process (if the expenditure will be $25,000 or more), select the most competent and affordable vendor, hold that vendor accountable for completing the work in a timely and acceptable manner, and then determine how much money to put away every year to pay for similar repairs in the future. Compared to the DCPS process, it may take less time for the charter leader to get the roof repaired, or it may take more time. Work quality and the longevity of the repair could vary. The key difference, though, is that the charter school is responsible for making the repair and paying for it.

DCPS principals are hired to be the academic and cultural leaders of an individual school. Charter school CEOs are responsible for operating a non-profit, including finance, management, development, communications and marketing, human capital management, as well as programmatic oversight. Below are some examples of specific differences in the roles of a public charter school CEO and a traditional school principal.

Despite shouldering more responsibility, the vast majority of DC charter leaders have salaries commensurate with traditional public school leadership. According to publicly available data, the current DCPS salary range for principals is $117,000 to $186,000, with an average of $146,000, and the recently nominated chancellor’s base salary is $280,000. For charter schools, according to most recently available IRS 990 disclosures, the compensation (salary, deferred compensation, and bonus) range for executive directors and CEOs is $53,000 to $513,263, with an average of $149,539. (At the upper end, the schools tend to be larger or part of a large network, or the nonprofit runs other, non-school programs that the CEO also oversees.) The PNP Staffing Group conducts a periodic review of nonprofit salary trends — the chart below shows DC area salary ranges by title. The DC charter sector is compensating their leadership within these expected salary bands.

The biggest driver of school budgets, across both sectors, is teacher, not executive, pay. But the economic conditions of the sectors are not equitable. Both DCPS and charters spend the bulk of their money on paying people, and they do so through the Uniform Per Student Funding Formula (UPSFF). However, public charter schools shoulder additional expenses that are funded outside the formula in traditional public schools. Most notably, the government contributed $59,046,000 to DC teacher retirement in FY18, or nearly $1,200 per student — all funded in addition to the money DCPS schools receive to educate each enrolled student. Charter schools have to fund their teacher retirement (generally 401k or 403b matches) through the UPSFF. In addition, charters must also pay Social Security tax (6.5 percent) through the UPSFF — which DCPS is not subject to because of the pension.

What does this all mean for public education in DC? With so much of both DCPS and charter school budgets directed, rightly, toward teachers, how do we ensure that DC is a premium destination for the most talented, dedicated educators and offers high-quality options for every student?

1. Bring per-pupil funding to equity as defined by the 2013 Education Adequacy Study, so that students’ educations are funded fairly regardless of whether they attend a DCPS or charter school. We can accomplish this gradually over the next five years by increasing the UPSFF base by 4 percent annually.
2. Bring extra-formulary expenditures in DCPS into the UPSFF, demonstrating that we value all children and school types equally.
3. Creative incentives for teachers to work and live in the city. Programs like student loan forgiveness, tax credits, and home-buying assistance can help both charters and DCPS recruit, retain, and reward outstanding educators who work with our students every day.

In every DC school, in every neighborhood, teachers are our most valuable resource in closing the opportunity gap for all children. While executive compensation offers a simple explanation for school budget pressure, it’s not the cause. More significant inequities between sectors, as well as local economic conditions, have a greater impact. Fully funding public education and getting creative about city-wide strategies to make DC a preferred teaching destination is a cross-sector initiative worth pursuing.