BASIS Charters’ educational trade secrets

by David Safier

It looks like one of those heavily redacted CIA documents with page after page of "I could tell you but then I'd have to kill you" information blacked out. But it's not a CIA document. It's the BASIS application to open a charter school in San Antonio, Texas. The document is 400 pages long, and 72 of those pages are completely blacked out. At the bottom of each page are the words, "Shaded material denotes Confidential/Proprietary Information and/or
Confidential/Financial Information." Apparently, a whole lot of what
BASIS does is confidential and proprietary.

The three pages of the BASIS reponse to the topic, "Discuss the educational innovations that will distinguish this school from other schools," are redacted. Other blacked-out topics: Measurable student goals (2 pages); Educational program (9 pages);
Extracurricular activities (1 page); Professional development
opportunities for teachers (2 pages); Startup budget and budget for the
first year of operations (8 pages).

When the application gets down to the business end of things, the BASIS folks really get serious about redacting information. The 4 pages where they were required to
"Describe the extent to which any private entity, including any
management company, other nonprofit group, other governmental agency
and/or any other educational organization will be involved in the
operation of the charter school" are blacked out. The 12 pages of bylaws of the
sponsoring entity, BTX Schools, Inc. (BTX is short for BASIS Texas), are
blacked out as well. So are 26 pages describing the "negotiated service
agreement(s) with any organization(s) and/or individual(s) that will
provide financial accounting, payroll, and/or tax accounting services
for the proposed charter school."

Not all charter school operators find it necessary to black out major portions of their Texas applications. Two other Arizona-based charters filed applications to open schools in San Antonio: Carpe Diem and Great Hearts. The only blacked-out parts of their applications are about half a dozen names and email addresses of people who aren't directly related to the schools. Unlike BASIS, their applications put their educational approaches, operations and finances into the public record.

I come from a different school of thought than BASIS when it comes to educational approaches and practices. I don't think they should be proprietary or confidential. If a teacher or a school is doing something great for its students, I say, share it with the world so other students can benefit. If people want to make some money off their innovations, they should write a book or go on the lecture circuit, which will send a few dollars their way at the same time it gives their ideas wider distribution. But no one should worry about other people stealing their educational innovations. People should be encouraged to "steal" anything that would be valuable for their kids, within the bounds of copyright and patent law, of course. Who knows, maybe someone will adopt some of those great ideas and build on them, then send them back to the innovator in a new, improved form. Everybody's a winner, especially the only people who really matter in education, the students we teachers dedicate our professional lives to.

Our best educators are philanthropists in the original meaning of the word — lovers of human kind — not business people scrambling for market share and profits, jealously guarding their secrets from the prying eyes of competitors. BASIS, which claims to pride itself on its commitment to high quality education, doesn't seem to understand that. Apparently it thinks only students who enroll in BASIS schools are entitled to the benefits of its "product."

There's a reason BASIS adopts the confidentiality business model. BASIS is a for-profit business. The more students who enroll in its schools, the more money it stands to make. Individual BASIS schools are nonprofits, as are BASIS Schools Inc. and BTX Schools. But at the top of the pyramid is BASIS.ed, a for profit Charter Management Organization (CMO). Actually, it refers to itself as an Education Management Organization (EMO) because it has plans to branch out and create "scalable, moderately priced independent schools" in addition to its charter schools.

Every year, BASIS charters send 70% of the funds they receive from the state to the for-profit BASIS.ed where the money disappears from view. The tax returns of nonprofits are public record. You can look through their complete 990 forms online, which gives you some idea of how they spend their money, including the salaries they pay their top employees. For instance, we know that when BASIS was a nonprofit, its founders, Michael and Olga Block, together brought in as much as $315,000 a year. We also know Olga Block's sister, who was living in the Czech Republic at the time, made $61,000 in 2007 for accounting services. Since the creation of BASIS.ed, the compensation the Block family and others receive is unknown. We have no way of finding out how much of our tax dollars stays with the corporation in the form of profits and how much makes its way back to the students.

All those blacked-out pages in the BASIS San Antonio application make sense in the context of the corporation's for-profit business model. Revealing "the extent to which any private entity, including any
management company, . . . will be involved in the
operation of the charter school" would tell more about BASIS.ed than it wants the world to know. Most likely the bylaws and the "negotiated service agreements" would reveal too much "Confidential/Financial Information" as well. And since expansion of the franchise means more money for the corporate heads of BASIS.ed and others who profit from the enterprise, any information that leaks out about how it educates its students would be harmful to the brand, since others might try to duplicate BASIS's secret formula. That's the business model. Unfortunately, it's antithetical to the philanthropic principles of education, which is why the for-profit model is such a bad fit for education.