Cash Incentives for Charter School Recruitment: Unethical Bribe or Shrewd Marketing Technique?

In cash-strapped school districts, where traditional public schools and charters compete over funds, schools face acute financial pressure to attract and retain students. In recent years, some charter schools have discreetly turned to a controversial recruitment strategy: offering low-income families cash stipends or other prizes in exchange for drawing new students into their schools.

The practice is a not-much-discussed part of the school choice debate, and it’s not well-known how widespread it is either. This is in large part because schools are typically under no obligation to report it. Critics say these incentives amount to unethical bribes targeting primarily low-income families, though defenders say they’re just shrewd marketing techniques.

The KIPP charter network is one of the largest and most prestigious charter school networks across the country. In December 2016, KIPP Adelante, a San Diego charter, sent a newsletter out to enrolled families offering substantial cash stipends to those who could help recruit new fifth graders to their school.

The promotion read:

If you know a 5th grader at another school and you get them to come to school here, you will receive a premium of $500 to offset your child’s educational expenses. In addition, the family you bring to KIPP Adelante will receive a premium of $100 (also for educational expenses) for enrolling their child here. Bring two 5th Graders to the school – get $1000! These students have to attend our school for at least 2 weeks before you can collect your premium.

A former KIPP Adelante teacher shared the newsletter with The Intercept, troubled by the ad targeting a school where 99 percent of students enrolled are children of color, and 98 percent qualify for free-and-reduced-price lunch.

That same year, the school offered a smaller cash incentive program to KIPP Adelante employees to help recruit fifth graders. The specific drive to recruit those students can be explained by the school’s unique makeup. In San Diego, elementary schools tend to go through the fifth grade, with middle schools covering the next three grades. But KIPP Adelante enrolls students from grades five to eight, which means enrolling fifth graders typically requires students to leave their elementary schools early.

Monique McKeown, the school’s principal, confirmed to The Intercept that they implemented the financial incentive program but said it was not successful and discontinued it this school year. McKeown said no families ended up claiming the money and just “one to three teachers did.” KIPP Adelante is a tuition-free public school that also provides students with free transportation and uniforms, and the funds were set to come out of the school’s budget.

Gary Miron, an education professor at Western Michigan University who has studied KIPP schools said he’s never seen such a program. “I’m flabbergasted, that’s really striking,” he said.

The KIPP network comprises 209 charter schools educating about 90,000 students around the country. It does not normally monitor practices such as offering enrollment incentives, but Steve Mancini, a national spokesperson for KIPP, responded to an inquiry from The Intercept by surveying leaders from the 30 regions in which the charter management organization operates. He said he found that the majority of their schools do not have such recruitment practices:

While KIPP San Diego’s recruitment incentive program is allowed by state law, it is not common practices among KIPP network schools. The majority of KIPP schools do not provide incentives to staff or students for helping with student recruiting. Those that do generally offer students small-value items like school shirts, uniform vouchers, and gift certificates as incentives for referring their peers to apply to KIPP. These initiatives are done in accordance with state and local laws. KIPP’s recruiting relies on our reputation for providing high-quality education.  Families choose KIPP because our dual focus on character and academics, partnerships with more than 90 colleges, and commitment to building strong relationships with families.

KIPP leaders in southern California, though, told The Intercept it is relatively common in their region. “I know that other charter schools do similar things,” said McKeown, the KIPP Adelante principal. “I can’t speak to exactly what they do because I don’t know, but I can say that I know for a fact that other charters in the area do the same thing.”

Allison Ohle, executive director of KIPP San Diego, told The Intercept that “it’s not an uncommon practice” for charter schools to offer these sorts of stipends. Ohle declined to name other schools that offer cash bonuses, but emphasized that the practice is legal.

“I have pretty clear memories when our team was trying to figure this out, we looked at what was allowable and not in the law, and we saw we could use financial reimbursements for educational expenses,” she said. “That was totally above-board and up-and-up.”

Briana Gilchrist, a press assistant for the National Alliance for Public Charter Schools, told The Intercept that her organization “does not track information related to financial gifts to families who enroll their students.”

While little formal study has been paid to the use of financial incentives to enroll students, local news reports show charter schools in a number of other states have employed similar strategies in recent years — though to a lesser degree than what was tried at KIPP Adelante.

In 2014, MLive reported that an Ann Arbor-area charter school offered small gift cards to families that helped recruit other students. “We know that word of mouth is one of the best ways to spread the word, and we know that our satisfied parents are the best spokespersons,” said a representative for the charter network.

That same year, the Milwaukee Journal Sentinel reported on a couple of charter schools in Wisconsin that offered families $100 cash rewards for referring new students. One charter school offered families a $50 grocery store gift card.

Another charter school in Indianapolis offered families $100 grocery store gift cards to sign up in 2015. “I’m not one of those folks who sees it as a problem,” the charter school’s chief strategy officer told Chalkbeat Indiana at the time. “The real shame would be if taxpayers built the building, bought the computers and nobody showed up. That would be the ultimate abuse of taxpayer dollars.”

At least one state has formally outlawed the practice, with legislators characterizing it as unethical bribery. In 2009, Colorado passed a law banning the use of financial incentives after it was reported that a charter network had offered families $100 gift certificates for enrolling. The Denver Post reported on a local charter school that broke the new law in 2010 when it offered families $400 worth of gift cards if they helped recruit new students.

Luis Huerta, an education policy professor at Columbia University Teachers College, said while he knew of charter schools in the 1990s that offered cash bonuses to families that home-schooled their children, he was stunned to hear similar strategies are still being used today.

“In California, they used to work to get all these home-schooled kids to sign up for charter schools and would give out cash and other prizes to get more and more families to enroll,” he told The Intercept. Such “home-school charters” were considered cash cows for school districts, Huerta explained, because the children required minimal overhead to be educated, but each student would still generate the full per-pupil revenue from the state. Huerta documented the rise and fall of home-school charters in books published in 2000 and in 2009.

Sarah Butler Jessen, an education professor at the University of Southern Maine’s Muskie School of Public Service and co-author of a new book, “Selling School: The Marketing of Public Education,” told The Intercept that she’s never heard of schools offering families cash incentives for recruitment, but that she’s not surprised, either.

“Part of the reason this doesn’t surprise me is because there isn’t a lot of transparency with these activities. There is no requirement that schools report practices like this,” she said, adding that charters, as privately managed organizations, are generally subject to different public reporting guidelines.

“It can be really difficult to get the inside information, even from teachers and certainly from administrators who would be able to speak to these larger policies,” Jessen said. “It’s just hard to track.”