Two of the District’s charter school leaders earned about as much as or more than D.C. Schools Chancellor Kaya Henderson in 2013, though she runs a city school system that, with 45,000 students, is much larger than either of their organizations.
A Washington Post analysis of federal tax forms shows that the District’s five dozen charter school leaders earned total compensation ranging from just less than $90,000 to more than $350,000 in 2013. The Post analysis shows that leaders of some charter schools are paid no more than principals at traditional public schools, while others are earning much higher salaries to lead one school, or a handful of schools, that serve just hundreds of students.
D.C. taxpayers send more than $600 million to fund the city’s charter schools each year, but there is far less information available about how that money is spent than the tax dollars that flow to the traditional public school system.
Even higher salaries have been concealed because some of the charter schools — which are required by law to be nonprofit — used for-profit management companies to supervise their operations. Company executive salaries do not show up on schools’ tax filings and are often impossible for charter school regulators — and the public — to track.
For example, the highest-paid employee at Community Academy Public Charter School in 2013 was Head of Schools Brenda Bethea, whose total compensation was $146,772, according to the school’s tax filings with the Internal Revenue Service. But the highest-paid person running Community Academy’s network of five schools in 2013 was chief executive Kent Amos, who earned $1.3 million that year from a private management company, according to tax filings read into the D.C. Superior Court record by Judge Neal E. Kravitz. That figure became public only after the D.C. attorney general filed a lawsuit.
As charter schools have grown in the District and nationwide, so have concerns about the lack of transparency in their budgets and their financial arrangements with management companies. Nearly 3 million children are enrolled in more than 6,700 U.S. charter schools, an estimated jump of 14 percent over last school year.
In 2011-2012, about 22 percent of charter school students across the country were enrolled in schools operated by for-profit management companies, according to a National Education Policy Center report.
Budgets for traditional public school systems are debated in public by elected officials, and traditional schools, like any government agency, are required to disclose detailed information about how they spend their tax dollars. They also must disclose employee salaries.
“We’re used to a system where taxpayer dollars fund public schools, and there’s a great deal of transparency in terms of how much everyone makes, including teachers and top administrators,” said Kevin Welner, director of the National Education Policy Center at the University of Colorado at Boulder. “We’ve moved to a system where the taxpayer money still goes out, but we don’t have any of the accountability and transparency that we’ve come to expect.”
In some parts of the country, lawmakers are beginning to question whether salaries for charter school leaders need regulating, arguing that pay for charter leaders has grown unreasonably high at some schools.
In New York, for example, Eva Moskowitz, the chief executive of the nonprofit Success Academy network. which runs more than 20 charter schools, earns $578,420 in total compensation, according to tax filings. A state lawmaker has proposed a law that would cap charter-leader salary at $199,000. A bill in New Jersey, where there is a cap on salaries for traditional school superintendents, would apply that cap to charter school leaders.
Nina Rees, president of the National Alliance for Public Charter Schools, says she supports efforts to make dealings with private management companies more transparent, but she does not think lawmakers should place a cap on salaries. “Offering a competitive salary will broaden the pool of applicants,” she said.
Like traditional public schools, charter schools are publicly funded with taxpayer dollars. Unlike traditional public schools, charter schools are independent nonprofit organizations that are not required to disclose what they pay their employees. The exception is when charter employees earn more than $100,000; their compensation must be disclosed on forms that schools submit to the IRS.
Charter leaders are technically superintendents of small school districts; the District’s 61 charter school leaders oversee 112 individual charter schools throughout the city. Most earn far less than Henderson, who receives a salary of $275,000, plus health, retirement and other benefits to run the D.C. Public Schools, a system with more than 45,000 children enrolled at more than 100 schools.
Henderson declined to comment on charter leaders’ salaries.
The Post’s analysis of data from the 2013 tax year, the most recent year available, shows that of the 38 charter schools that don’t have a management organization or other related entity, 21 are led by individuals whose total compensation is less than $132,148, the average salary of a D.C. Public School principal this year. (The job responsibilities of a charter school executive vary and often aren’t the same as those a principal might have, but each is seen as a key leader of his or her school.)
In many cases, there is a relationship between the size of the school and the compensation for that school’s executive.
Olivia Smith, for example, earned $89,367, one of the lowest total compensations in the city, but she also led one of the smallest schools: Bridges, with 143 students and total income of $3.8 million. “I am in it for a cause I believe in, not to be wealthy,” Smith said, adding that the school has since grown and she has gotten a raise.
Donald Hense earned a salary of $269,659 and a total compensation package of $356,000 as chief executive of Friendship, one of the city’s largest networks of charter schools, which served more than 3,800 students in 2013 and had a budget of more than $73 million.
Friendship’s board of trustees worked with a consultant to look at comparable salaries and set a “a high mark” for compensation for Hense because of his experience and the complexity of the job, said Gregory Prince, the board’s vice chairman.
“I would argue that Don Hense is an educator, real estate developer, investment banker and bond market specialist,” Prince said.
Friendship operates nine campuses on six sites serving students from preschool through 12th grade. Three of those campuses are rated Tier 1, or high-performing, by the charter school board. Three are rated Tier 2, or mid-performing, and three serving early grades have not yet been classified.
“He was the founder, so he’s been there 20 years, but we wanted to make sure we could keep him,” Prince said.
Competition for strong leaders and the size of schools are two of many factors that drive decisions about executive compensation at charter schools, according to charter school board members. Boards also survey executive compensation at other charter school networks around the country or other local nonprofit groups for comparison.
Some charter leaders say their job duties — as leaders of small businesses — differ markedly from a superintendent of a public school system.
“I’m sure Kaya [Henderson] has never had to worry about making payroll for her staff, finding a facility in which to operate or negotiating leases with the city,” Sonia Gutierrez, founder of Carlos Rosario International, an adult-education and job-training charter school, wrote in an e-mail.
Gutierrez’s total compensation from Carlos Rosario was $328,744, including deferred compensation. She received another $23,660 from a related nonprofit organization that manages Carlos Rosario’s buildings, making for a total package of $352,404.
Some of the highest-paid charter leaders in the city oversee high-performing schools with a reputation for raising the math and reading test scores of disadvantaged students. Total compensation for Susan Schaeffler, chief executive of KIPP DC, is $232,643, while total compensation for Emily Lawson, chief executive of DC Prep, is $231,261.
Carrie Irvin, president of Charter Board Partners, an organization that works to strengthen charter school boards, said that in her experience, many boards aren’t doing a good job evaluating and compensating leaders according to their ability to meet concrete goals, including student achievement goals.
“We’re talking about allocating taxpayer money to hire and retain a leader who can ensure that kids are getting a great education, and that’s a really big decision,” Irvin said. “That’s why it’s so important to have strong boards.”
Charter schools’ tax filings offer only a small snapshot of salaries at the organizations. The picture is even less complete when a school is run by an outside for-profit company.
In the District, that fact has been made clear in two pending lawsuits that allege charter officials diverted money from schools for personal gain.
One suit involves Community Academy and its leader, Amos. Amos and the school’s board members contend that they did nothing illegal. A. Scott Bolden, the board’s attorney, said Amos earned his salary, given his local and national connections and experience as a corporate executive who built Community Academy into an organization serving 1,600 children.
“I think we owe him money, quite frankly,” Bolden said at a recent public hearing.
The D.C. Public Charter School Board sees things differently: It voted this month to revoke Community Academy’s charter for financial mismanagement.
The second lawsuit involves three former leaders of Options, a school for at-risk teens, and two for-profit management companies they ran. Tax forms show that the highest-paid of the three, former chief executive Donna Montgomery, earned $319,700 in total compensation from Options during the 2012 calendar year. She allegedly was paid $425,000 during the 2012-2013 school year, according to court documents.
Options has been run by a court-appointed receiver since the lawsuit was filed in the fall of 2013.
At least three other charter schools in the city currently use for-profit management companies: Somerset Prep, Basis DC and Hope Community. Each of the management companies runs multiple schools in multiple states.
More than a dozen other schools have relationships with nonprofit organizations that serve as management companies or share facilities or board members or provide other support.
Scott Pearson, executive director of the D.C. Public Charter School Board, has been pressing the D.C. Council to pass legislation that he says would tighten the transparency loophole by giving him more power to examine management companies’ books and records.
Pearson said he doesn’t want to limit salaries but does want to ensure that more expenditures are transparent. “PCSB’s concern is that schools provide quality education. It is up to individual charter school boards to set the appropriate salary to recruit the best teachers and other employees,” he said.
David Grosso (I-At Large), chair of the D.C. Council’s Education Committee, says he plans to introduce that legislation within the next few weeks.
Grosso said that Options and Community Academy, and the high salaries paid their leaders, are outliers. “We have to be good wardens of the money, but most of these schools are,” he said. “We are seeing a couple of instances that are the exceptions.”
Ted Mellnik contributed to this report.