What is the 'diverse provider model?'

How did we get it? Is it here for good?

by Eva Gold

Five years ago, the city and its schools were in turmoil over a proposal to turn over leadership of the school system and many of its schools to a for-profit company called Edison Schools Inc.

But out of discussions between city, state, and School District officials, a compromise reform plan emerged that took some of the heat off of Edison. At its core was what is now known as the “diverse provider model” of school management.

This model, in which six private, outside providers now manage a total of 41 schools across the city, put Philadelphia in the national education spotlight as the forerunner in a new trend towards increased involvement of the private sector in school management. These private sector providers include both for-profit businesses and nonprofit organizations.

The diverse provider model has not come cheap. Since 2002, the SRC has spent over $80 million for school management contracts with three national for-profit companies, two local nonprofit organizations, and two area universities (although the universities negotiated for less management responsibility and more focus on support for professional development). Next spring, the SRC will vote on whether to renew the contracts of the six providers currently managing schools.

Emergence of the model

In 2001, the Commonwealth of Pennsylvania took over the School District of Philadelphia. Many Republican state officials and some influential Democrats had long believed that large urban districts could not fix their own fiscal and academic problems. Their takeover plan was built on the premise of dramatically scaling up private sector involvement in Philadelphia's public education. Their plan, which drew heavily from an Edison Schools report that the governor had just commissioned for $2.7 million, called for Edison itself to manage up to 60 low-performing schools and take over many central office functions.

Privatization – especially the large role for Edison, whose reputation as an education management organization (EMO) was taking a beating nationally—met with massive pushback from students, parents, community members, local unions, and some local political leaders.

Despite the protests, state leaders remained firm that the private sector must be part of any solution in Philadelphia. As the local/state conflict heightened, interim School District Chief Executive Officer Philip Goldsmith and his colleagues introduced a compromise approach – that multiple organizations could manage schools in the District. This idea of a “diverse provider model” gained momentum as a way of meeting the state's requirement of involving the private sector while allaying local fears by reducing Edison's role.

In January 2002, the new School Reform Commission (at this time consisting solely of its chair, James Nevels) announced that other organizations besides Edison could apply to manage schools. In April 2002, the SRC selected seven private sector organizations (see chart) to manage 46 elementary and middle schools that had been identified as among the District's lowest performing. Edison was put in charge of 20 schools, more than any other provider but far less than the 60 the state had initially proposed.