Broke But Not Broken: Charter Schools Get Scrappy

Charter schools are facing a tough reality: they're about to lose $40 million in federal funding. The pandemic money that kept many schools afloat just dried up. And here's the kicker—charter schools already get only 70 cents for every dollar that regular public schools receive.

But here's what's amazing: the best charter school leaders aren't giving up. They're getting creative and finding new ways to keep their doors open.

The Money Problem Is Hitting Hard Right Now

"This is the first time we're seeing schools' budgets actually shrink," says Jason Sitomer from Charter Impact. He works with charter schools every day. "Before, schools had that extra pandemic money to help when things got tight or when fewer kids enrolled."

That pandemic funding was huge—up to 10% of what some schools spent each year. It officially ended on September 30, 2024. Just like that, gone.

Charter Schools Face Three Big Money Problems at Once

1. Less Money from Washington The government plans to cut Charter Schools Program funding by 9% next year. This program is the only federal money specifically for opening new charter schools. The cut affects about 3.7 million students—most of them Black, Brown, or from families without much money.
2. The Pandemic Money Is Gone Schools that counted on ESSER funds to pay their bills are scrambling. The money stopped coming overnight, and many schools built their whole budgets around it.
3. Everything Costs More While schools get less money, their bills keep growing. Health insurance for teachers is getting crazy expensive. The average debt for each student jumped from $15,321 to $18,214 in just two years—that's a 19% increase.

Five Smart Ways Charter Leaders Are Saving Their Schools

The charter school leaders who are making it work have some clever tricks up their sleeves:

1. Getting Smarter About Staff Paying teachers and staff eats up 65-75% of most school budgets. That's not sustainable anymore. Smart leaders are:

• Finding new ways to use fewer people but still teach kids well
• Using computers to handle boring paperwork
• Hiring people in flexible ways that match how many students they have

"Some schools were spending 75% of their money just on salaries," Sitomer says. "You can't keep a school running that way."

2. Joining Forces with Other Schools Small charter schools are having the hardest time.

"Schools really need at least 200 students to make the money work," Sitomer explains. "That's why we're seeing more schools team up, merge together, or sadly, close down."

When schools combine, they can share costs for things like principals, bookkeeping, and buying supplies in bulk.

3. Getting Smart About Healthcare Costs Health insurance is one of the biggest bills schools pay. Leaders are fighting back by:

• Looking at the data to find where they're wasting money
• Negotiating better deals with insurance companies
• Creating benefit packages that teachers can afford but that don't break the school's budget
• Following all the rules so they don't get hit with fines

4. Using Technology to Save Money The smartest schools know that sometimes you need to spend money to save money. They're buying:

• Software that does repetitive tasks automatically
• Programs that show them where they're wasting money
• Teaching tools that help kids learn better without costing more in the long run

"Simple automation takes away the boring work and lets staff spend time on things that actually help kids," Sitomer points out.

5. Building a Safety Net Good charter leaders aren't just cutting costs—they're building schools that can handle whatever comes next:

• Saving more money for emergencies (schools now keep enough cash to run for 145 days without any new money coming in—that's up 33% from six years ago)
• Working hard to keep enrollment steady
• Making backup plans for different funding scenarios
• Finding new ways to make money beyond government funding

When Times Get Tough, Charter Schools Get Creative

Here's what's really interesting: these money problems are actually making some charter schools stronger. They're being forced to get creative in ways they never would have tried before.

S&P Global Ratings (they're the folks who check if organizations can pay their bills) says charter schools overall are doing okay. They wrote that "most rated schools are doing well and staying strong, with good leadership teams and enough cash saved up."

Charter schools can change faster than regular public schools. They don't have as many rules holding them back, so they can try new ideas quickly.

Three Things Every Charter School Leader Should Do Right Now

1. Look at Every Dollar You Spend Go through your budget line by line and ask:

• Does this expense directly help us teach kids?
• Could we do this cheaper or better?
• Can we split this cost with another school?

2. Make a Plan to Keep Students Coming Since schools get money based on how many students they have:

• Figure out who in your community needs your school and how to reach them
• Show parents why your school is special
• Build strong relationships so families want to stay
• Watch your enrollment numbers like a hawk

3. Don't Go It Alone No school can survive by itself anymore:

• Look for other charter schools you could team up with
• Share office staff and services with other schools
• Partner with community groups to offer more without spending more
• Join buying groups to get better prices on supplies

Charter Schools Will Come Out Stronger

Even with all these money problems, I believe charter schools will make it through. Why? Because tough times force people to get smarter about how they work.

The schools that survive will be the ones that never forget why they exist—to give kids a great education—while also being smart about money. They'll come out not just surviving, but actually stronger and better able to serve the families who need them most.

What's your school doing to save money while still giving kids a great education? I'd love to hear your story in the comments.