Philly charter operator String Theory, turned down by school board, now consulting for another charter, CHAD

In its bid to open a third charter school in Philadelphia, the arts-centered String Theory Schools has encountered roadblocks from district officials who cite its “mixed success.”

But the charter operator has been extending its reach elsewhere — in the consulting business. It has signed a $60,000-a-month contract to help rescue the Charter High School for Architecture and Design, a 20-year-old charter in danger of being closed by the School District.

The struggling school, known as CHAD, is also prepared to hand over its management to String Theory, a nonprofit led by mother and son Angela and Jason Corosanite.

A proposed agreement would send 8 percent of the charter’s payments annually from the School District — which provides the bulk of its $8.7 million budget — to the company. String Theory and CHAD are represented by the same lawyer, David Annecharico of Sand & Saidel.

The arrangement provides a window into how charter schools are run; the degree to which the publicly funded schools, which educate one-third of Philadelphia public school students, are independent; the role of outside management organizations; and the extent to which the School District has authority over how the tax dollars that underwrite the schools’ budgets are spent.

While the district requires charter schools to get approval before hiring a manager, CHAD was able to sign the consulting contract on its own.

The arrangement could be “a very lucrative deal for Angela and String Theory, especially over time,” said Gary Miron, a professor of educational leadership, research, and technology at Western Michigan University who has studied charter management agreements.

For CHAD, the hope is that String Theory’s involvement will help the charter stay open. A district evaluation last year found declining test scores and attendance, noncompliance with special-education requirements, and financial issues.

But the school board is moving ahead with the nonrenewal process, with hearings scheduled to begin June 12.

How CHAD might afford outside management is unclear. The charter is currently paying String Theory’s consulting fees with $250,000 pledged by a “benefactor,” said Lance Rothstein, the president of CHAD’s board of trustees.

But it hasn’t received the School District’s permission to hire String Theory as a manager — a proposal Rothstein said CHAD leaders floated in an effort to persuade the district they were serious about making changes.

CHAD’s board “was doing everything in its power to save" the school, Rothstein said. “If it meant that we needed to hire an EMO [education management organization] to do it … we were going to do it."

District spokesperson Megan Lello said it had "never received nor reviewed an amendment request for partnership with String Theory” from CHAD.

How many charter schools are run by management organizations seems to be an open question. The National Alliance for Public Charter Schools said management organizations ran 35 percent of charters in 2016-17. Miron, in data he will publish this year, puts the number of EMO-run charters closer to half.

String Theory’s leaders say management companies like theirs are necessary in an era of strict compliance requirements.

If charters "were to hire people to do what we do, they wouldn’t be able to stay open,” Angela Corosanite said. “Because they couldn’t afford the amount of people they need.”

The organizations serve another purpose, Miron said, as "the vehicle for growth” of charters. They attract philanthropic money, and districts that authorize charter schools may also approve "because the applications are complete. They’ve followed all the regulations,” he said.

But the companies aren’t necessarily subject to the same requirements governing public schools. Their agreements can give them ownership of lesson plans and other assets, making it difficult for charters to ever end the management relationships, Miron said. And fee structures allow them to “profit heavily,” he said.

While CHAD’s board considered a number of management companies in Philadelphia, most would have required that “you take on their flavor,” Rothstein said. The board considered proposals from String Theory and American Paradigm Schools, which operates five city charters, and decided that String Theory fit best with its design-focused model.

String Theory, meanwhile, has been eager to expand. The organization, which says it began in 2011 and runs two charter schools, both in Philadelphia, spent two years distilling its model to six “design elements" that staff are given on lanyards — including “Pathways to Passion," “Activator Culture,” and “Our Magic!”

“This model actually came from some folks we worked with that were involved in helping Ritz-Carlton grow and expand internationally,” Jason Corosanite said.

The school board in February denied String Theory’s application to open a third school in Philadelphia.

While String Theory reapplied in April for the Joan Myers Brown Academy in West Philadelphia, the district cited issues with the revised application, describing the curriculum as lacking and the school’s relationship with String Theory as “inconsistently described."

It also questioned the organization’s statement that the growth of its existing charter schools — Philadelphia Performing Arts, a K-12 school that began in 2000 as an elementary and now enrolls 2,500; and Philadelphia Charter for Arts and Sciences, a former district elementary turned over to String Theory in 2012 — bolstered its standing as a model for replication.

String Theory has had “mixed success” with those schools, the district said in its evaluation report. (The district is recommending the five-year renewal of String Theory’s Performing Arts charter.)

Corosanite said the district was “going to find a reason to say no” to the proposal. He said the school board’s February votes denying three charter schools represented a “practical moratorium” on new charters.

“We want to give Philadelphia the opportunity to say yes to this,” he said. “We’re going to exhaust our opportunities here, with still an eye toward other opportunities elsewhere.”

As of 2017, String Theory reported 34 employees and $3 million in revenue. Audited financial statements show it received $2.5 million in management fees, and an additional $530,000 in “educational consulting fees.” Annecharico said the consulting fees reimbursed String Theory for employees it sent to its two charter schools.

If retained by CHAD for a year of consulting, String Theory would net an additional $720,000 under its contract. It assigns staff members to evaluate CHAD across a host of areas: from executive leadership, compliance, and diversity to testing and assessment, data and attendance, and facilities.

Corosanite told CHAD’s board that “he has to look at everything,” said Lisa Roberts, a board member.

On a tour last month of the Center City school, which was founded in 1999 with the goal of sending African American students into architecture, Roberts and chief of innovation Andrew Phillips highlighted student work on hallway walls. Phillips’ students had deconstructed an e.e. cummings poem, creating models that represented each line spatially.

“We get absolutely no credit” from the School District for students’ design work, Phillips said. “That drives me nuts.”

The school’s proficiency scores in algebra, literature, and biology all fell between 2012-13 and 2016-17, the period reviewed by the district.

Some students come to CHAD because they think “arts school might be easier,” Roberts said. But they don’t necessarily have interest in design, she said.

Asked how CHAD would address that issue, since charter schools are not allowed to set admissions standards, Roberts pointed to String Theory and its performing arts charter school.

“They seem to have made it work,” she said.