OREM — Rick McCloskey was out of town last summer when he learned his daughter's private school, Meridian, was closing, perhaps for good.
But McCloskey and a few other parents felt there was a way to save the school, perhaps the only pre-k—12 private school in Utah County. But it would require a novel approach — going for profit.
In the world of private schools, most are non-profit. Non-profit schools not only get tax breaks, but many parents are more comfortable sending their child to a school where they know where the money is going. Over the past several decades, even private schools that have started as for-profit entities usually go non-profit. Meridian is bucking that trend.
Since inception, Meridian had been struggling to get enough donations to stay afloat and wanted to explore some education products that would help sustain it. Tasi Young, the new head of the school, said the school probably could reopen as a non-profit, but the new owners felt a for-profit model would be more long-lasting and reliable.
Myra McGovern, spokeswoman for the National Association of Independent Schools, a non-profit organization, said she had only heard of one other instance in the last while of a school turning from non-profit to for-profit, MacDuffie School in Springfield, Mass., which was bought by a corporation last month. But it could become more popular.
Unlike a non-profit school which is run by a board of trustees, usually made up of parents, and has to disclose all of its finances, a for-profit school has an owner and can keep its finances private. For-profit schools are also run more like a business and are interested in making money.
They run more efficiently and are more accountable for results, said Jim Williams, executive director of National Independent Private Schools Association, an organization for for-profit private schools. And over the last couple of years, Williams said he has noticed more interest in this type of model.
McCloskey and three other parents and community members will be the owners of Meridian. They started working on a new plan just after the former board of trustees announced the schools closing. The parents called Tasi Young, an attorney and parent who had a background in education businesses, to be the head.
McGovern, though, says for-profit schools are still "very, very rare" in part because parents aren't always sure their money is going back into the system and because non-profit schools can get tax breaks and receive donations. Traditionally, she said, most independent day schools can only pay for about 85 percent of their expenses with tuition,
But McCloskey, one of the new owners, hopes that tuition will pay for most of the schools expenses and plans to keep tuition about the same as it was when the school was a non-profit. Young said he plans on being very open with parents about the school's financial operations as well.
Changing to a for-profit model was a secondary thought to reopening the school, Young said. But he said the owners wanted to explore developing educational products like software and learning modules (something Young has a background in), which will help bring revenue and financial stability to the school.
The main advantage McCloskey sees in having a for-profit school is the fact that there are owners. He said not only was Meridian struggling as a non-profit because of the constant need for donations from parents, teachers and the community, it also had an ever-changing board of trustees as parents of students moved on when their kids graduated.
"Most of us will be involved with this until the day we die," he said of the new investors, mostly parents of students who were attending Meridian up until its closing last August.
McCloskey also said reopening the school as a for-profit is not about making money (he said the investors are just hoping to break even), but it's about being a part of educational innovation, something for-profit private schools are known for, Williams said,
One innovation Meridian will implement at its new opening will be a larger focus on technology, including having a laptop or iPad for each student and having some assignments online. Another is having a more global focus by recruting more international students and having a foreign teacher exchange that would allow a couple Meridian teachers to teach in a foreign country for a year and have teachers from that country come and teach at Meridian for that time period.
In Utah, there are only a handful of private, for-profit schools as the state has a much lower than average amount of private school students in general, at about three percent, according to the latest information from the state. Nationally about 11 percent of students attend private school, according to the National Center for Education Statistics. One of the largest for-profit private schools in Utah is Challenger, which started in Utah in 1963 and now has 22 schools in five states.
"Any successful venture must profit in order to survive and expand," said Lynette Hansmann, director of communications at Challenger.
Hansmann said the students at the school, on average, score above the 90th percentile on national standardized tests. Since the school doesn't accept donations or funds of any kind from government entities, it can make its own decisions on curriculum, teaching methods and techniques, she said.
The Meridian owners do plan on keeping the schools same mission and is even trying to recruit many of the same teachers Meridian had last year.
"We really hope [being for-profit] will not change the school except for the stability," Young said. "People will know we have a financial model that is secure."
The school plans on opening its upper level school this fall with 100-150 ninth to 12th graders at its former location in Orem. Young hopes to add the middle (6-8) and lower (pre-k-5) grades the following year. In August, the school plans to announce a new location in Provo or Orem.
"We want to see the success of this school for decades and have it be a real asset to the community and a leader in education," McCloskey said. "To see the influence that a school and its teachers can have on children is a pretty powerful experience."
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