Tennessee Charter School Law Eliminates Profit Motive

For-profit entities are not allowed to operate or manage charter schools in Tennessee. According to the Tennessee Department of Education:

Though a few states allow for-profit entities to operate public charter schools, and many states allow non-profit charter school governing bodies to contract with for-profit entities to operate or manage charter schools, Tennessee law prohibits either of those arrangements. Tennessee Code Annotated § 49-13-104(7) defines the sponsor: as “any individual, group, or other organization filing an application in support of the establishment of a public charter school . . .” That section notes that “a sponsor cannot be a for-profit entity.” The law requires the governing body, which operates the charter school to be “a not-for-profit organization” with 501(c)(3) exemption. The law in that same section (§ 49-13-106)(b)(1)(B)) says “no charter shall be granted to a for-profit corporation.” Tennessee law does allow a charter school governing body to “contract for services,” but it specifically limits that authority: “except for the management or operation of the charter school by a for-profit entity.” So, a charter school could contract with a for-profit entity for limited services, but cannot give up the actual management or operation of the school to that entity.