Charter schools in the United States are government-funded public schools that operate with autonomy from local school districts under performance contracts called charters. These schools are open to all students based on capacity and do not charge tuition. They may be run as non-profit or for-profit institutions, though for-profit management organizations are only permitted in Arizona. Charter schools may fundraise independently in addition to government funding.
The charter school concept originated from academic work by UC Berkeley professors Stephen Sugarman and Jack Coons in the 1970s, with the term 'charter schools' formally defined by Ray Budde in 1974. Albert Shanker of the American Federation of Teachers championed the concept in 1988. Minnesota became the first state to pass charter school legislation in 1991, followed by California in 1992. As of 2022, 46 states and the District of Columbia have charter school laws.
Charter schools operate under performance contracts detailing their mission, program, goals, and assessment methods, typically granted for 3-5 years. They are accountable to sponsors (local school boards, state agencies, universities, or other entities) for student achievement. As of March 2009, approximately 12.5% of over 5,000 charter schools founded had closed due to academic, financial, or managerial problems.
Charter schools receive significantly less funding than traditional public schools. A 2005 study found charter schools receive approximately 22% less per-pupil funding than district schools (about $1,800 difference), with some urban areas showing gaps of 40%. A 2010 study reported charters received 64% of district counterparts' funding ($7,131 vs. $11,184 per pupil). Charter schools raise an average of $500 per student from donors and may spend substantial amounts on advertising to attract students.
Charter schools serve more disadvantaged populations, including higher percentages of low-income and minority students compared to traditional public schools. Sixty-one percent serve populations where over 60% qualify for free or reduced lunch. Studies show charter schools tend to be small (fewer than 200 students), located in urban areas, and somewhat more racially diverse than average schools in their states.