Absolutely.

President Obama has laid out an ambitious goal of leading the world in college completion by 2020. Secretary Duncan has also set challenging goals such as turning around 5,000 of the lowest-performing schools and helping every child graduate high school ready for college.

Why wouldn’t we engage the private sector in our collective efforts to achieve these goals?

The education sector is unusual in its reluctant to engage the private sector. In fact, most government policy fosters the exact opposite approach - it encourages public-private partnerships to accomplish social and national goals. For example:

• The Obama administration recently canceled NASA’s moon program and replaced it with $6">http://news.cnet.com/8301-19514_3-10445227-239.html">$6 billion invest to support commercial manned spaceflight capability.
• The Department of Health and Human Services is allocating $20 billion under ARRA to help physician practices and hospitals (many of which are for-profits) adopt electronic health records (provided by 400 for-profit companies) in an effort to reduce medical errors and improve health outcomes.
• The U.S. Department of Commerce’s Broadband Technology Opportunities Program provides more than $4 billion to help private companies expand broadband infrastructure to strengthen healthcare, education, and economic development.
• Perhaps the best example the other “DOE” - energy. The U.S. Department of Energy uses a number of tax credits, loans, and grants (including ARPA-E) to support both the supply and demand of cleantech innovations. They recently provided Fisker Automotive with a $528 million loan – nearly as much as the entire I3 grant – to produce an affordable, family-oriented plug-in hybrid sedan. In March, President Obama announced more than $150 billion to support clean tech. He told a group of private sector innovators, “Your country needs you to mount a historic effort to end, once and for all, our dependence on foreign oil… And in this difficult endeavor, in this pursuit on which I believe our future depends, our country will support you.”

So the question is, if government can support the private sector in addressing climate change, improving health care, and sending a man to the moon – then why can’t it support the private sector in addressing our most pressing educational challenges?

The Administration pledges its support to private sector cleantech entrepreneurs but hasn’t yet engaged the private sector as a partner in exploring new instructional innovations, school models, or services for students. Federal policy has been more defined by its attempts to keep certain providers out, rather than broadening the provider community to expand the options, opportunities, and approaches available to students and schools. For example, Congress constructed I3 in such a way as to specifically shut out private entities. As a result, nonprofits can receive up to $50 million in direct support but a for-profit entity must instead go through a lengthy procurement process with a school districts or nonprofit entity.

Neglecting the role of the private sector ignores a key growth driver of innovation and has led to a policy and regulatory climate that has discouraged private capital markets from investing in K12. Investment in energy and cleantech surged from $1 billion in 2001 to nearly $4.5 billion in 2008 while the education industry only attracted $560 million, most of which was in postsecondary. Sarah Lacy captures this sentiment nicely when she says, “I’ve spoken to many venture capitalists who say they’d love to use technology to change education, but few think they can make money at it.” That's because our policy system won't allow them while it will allow them to make money at tackling climate change.

The solution is not to use an entity’s tax status as an artificial limitation on who is allowed to provide educational services. Instead, organizations – for-profit and non-profit – should be judged based on the quality of their service/product, past results, and alignment to the education organization’s mission and goals.

The good news is there are signs things may be changing. STARTL, backed with foundation funding, is exploring how to accelerate and scale education innovation and hosting a VC summit next month. Doug Lynch at the University of Pennsylvania has convened a number of leading non-profits and for-profits to explore new approaches to education, including hosting an education business plan competition. ASU and NeXtAdvisors recently held an Education Innovation Summit that attracted 200 organizations, including 53 companies. One of the keynote addresses was provided by Silicon Valley legend Reed Hastings who discussed his acquisition of DreamBox Learning. And Kay Madati, a vice president at CNN and Omar Wasow, a co-founder of BlackPlanet.com, just published an oped acknowledging the important contributions for-profit entities can make in supporting charter schools.

The Federal government has an opportunity with ESEA reauthorization to make education the next “cleantech” where public policy invites and supports private sector partnerships with schools. It is the only way we will accomplish the Administration's goals and cultivate the next generation models of education our students are demanding.

The issue here is quality, not tax-status. Unfortunately, because we have so few good cues for quality in K-12 education people frequently default to signals like for-profit or non-profit. Yet to assume these are useful delineations is to ignore the extremely wide variance in quality that exists in all sectors – public, for-profit, and non-profit. And, at the same time, to assume that for-profit means cheaper or more efficient is to ignore the diversity that exists around those issues as well.

Instead, questions like fit, mission alignment, and quality are more useful ways for a school, school district, or state to evaluate the various service providers out there. This is why Bellwether works with both non-profits and for-profits. We believe there are better ways to judge the effectiveness of educational ventures than how the IRS classifies them and that all sectors can bring value to this enterprise.

At NewSchools Venture Fund, where I work, I am considered a “hybrid” education reformer: my background spans work with large urban public school districts, for-profit education management organization (EMO) Edison Schools (now called EdisonLearning), an industry association for private providers of education services (the Education Industry Association), and a range of nonprofit organizations, including the Black Alliance for Educational Options and the National Alliance for Public Charter Schools.

What I have learned from this work across these sectors is this: no sector has a monopoly on innovation and quality, and no sector is immune from failure. Entrepreneurs in each sector have designed and launched schools, tools, programs and services, and the ultimate measure of their success is not their corporate structure but their impact on student achievement and attainment. Each sector brings unique strengths to closing the achievement gap, the civil rights issue of our time.

If anything, I believe that for-profit and nonprofit organizations are often more accountable than public agencies because survive and scale only on the basis of achieving their mission and producing results – not on the basis of earmarks and appropriations. Further, I believe that it is possible for a for-profit organization to be mission-driven and focused on delivering great outcomes for students; in those cases, making a profit can be well-aligned with serving the needs of children, with the bottom line inextricably linked to transforming the lives of children.

Ultimately, we must educate our children by any means necessary. It is time to end the sector debate and to embrace the quality revolution – holding each sector (and the organizations and people within it) equally accountable and responsible for improving student outcomes, growing to scale those organizations and approaches that yield positive results and shuttering those that don’t.

An organization’s “for-” or “non-” profit legal status seems to me unrelated to its ability to help children learn. Some organizations are focused on learning, others aren't. Results are the measure of intention; we tend to get whatever we’re focused on. So rather than focusing on “non-profit” and “for-profit” organizations, let’s focus on “for-learning” organizations.

A possible problem does exist here in the difference between private and public “for-profit” organizatons. Technically, shareholder return must be the focus of a publicly-traded organization. In our current education system, it's hard to see how shareholder return could be equated with learning. Cost-savings, yes. Economies of scale, perhaps. Increased learning? I doubt if the idea would even make the agenda at a quarterly board meeting.

When we discuss the relative merits and demerits of “for-profit” and “non-profit” educational organizations, we make the same category error that we make when discussing charter schools and traditional public schools. Organizational structure is not as important as many other factors. It is, at best, a potential enabler of other mechanisms that might make a difference. At worst, it’s another rabbit hole to run down or—as we will probably see this week—an invitation to view another yet another pre-scripted version of “The Liberals vs. Conservatives Show.”

While it is uncomfortable to think that some “for-profit” organizations might be tempted by their very nature to put profit ahead of people, it is just as hard to argue that “non-profit” organizations are any less mercenary when salaries are due and it’s time to re-up on the lease for the home office. Everyone is worried about the bottom line these days. “For-profit” companies worry about selling, and marketing, and all sorts of unseemly things in the world of public education. At the same time, “non-profits” run around the country worshipping at the altar of Gates, Broad, and Walton. Pick your poison.

Or pick “for-learning” schools.

A “for-learning” school is one whose purpose (it’s reason FOR being) is to help kids learn. End of story. It’s actually not a new concept, though I hope the term catches on because I think it would clear up a lot of foolishness.

The most common “for-learning” organizations are great classrooms. My mom had a huge banner in her room that said “Learning is our #1 job!”. Now maybe that’s a little too “Ford Pinto” for you, and it certainly doesn’t compare to the irresistible Golden Rule-ishness of “Work hard. Be nice.” But it means the same thing. Once you’ve stepped into this place, you have stepped into a “for-learning” organization. Banish ignorance all ye who enter here!

I’m beginning to think that we really do believe in silver bullets, and that the bullet we keep looking for is some kind of structural or free-market mechanism we can snap into place like Data’s “emotion chip” on Star Trek. Once implanted, this bit of “techno-policy” will bring our schools to life and endow them with the humanity their sci-fi analog has been longing for since Dr. Noonien Soong flipped his switch on star date whatever-it-was at the Colony on Omicron Theta.

This is science fiction. “For-profit” organizations aren’t inherently better or worse at helping kids learn than “non-profit” organizations, just like charter schools aren’t inherently better or worse than traditional public schools. By contrast, “for-learning” schools are best of all.

So long as we recognize that it is no wiser to romanticize them than to demonize them, we absolutely ought to welcome for-profits into the education sector. For that reason, recent administration moves to give preferential treatment to non-profits and publicly operated entities at the expense of for-profits, in areas such as i3 and higher education, is problematic.

Because they're so busy trying to curry favor with public officials and parents and are so worried about their public image, for-profit providers rarely make an explicit case for their own existence. There’s much discussion of choices and love of at-risk children, but little adult discussion of the benefits implicit in for-profit provision. While I’ve spent my entire working life in the employ of public entities and non-profits (making me a peculiar defender of for-profits), that also perhaps frees me to simply say things that for-profits shy away from.

While they certainly boast their own set of potential weaknesses, for-profits also have unique strengths. Several of these are particularly relevant today. First, because for-profits seek to earn competitive returns for investors, promising entrepreneurs are positioned to tap vast sums through the private equity markets. Second, for-profits have a relentless, selfish imperative to seek out and adopt cost-efficiencies where nonprofit managers will typically move more gingerly (witness last week’s hand-wringing about whether districts can possibly find ways to trim five or six percent of their teacher workforce). Third, for-profits have self-interested cause to expand (e.g. “scale”) more rapidly than nonprofits. Fourth, a focus on the bottom line means that for-profits are more willing to shift their efforts or reallocate resources when circumstances warrant. In short, the discipline of being for-profit can make organizations more nimble and quick-footed, whether the question is growth or a change in strategy.

Nonprofits have little incentive to become “early adopters” of cheaper or more uncertain tools and techniques. For example, if substituting on-line training for in-person professional development is found to be almost as effective and far cheaper, it seems only sensible to adopt it and redirect the new dollars to more useful pursuits. Of course, such shifts are often slowed up because managers may have personal relationship with trainers, veteran employees may like their workshop travel or distrust online training, and clients may resent the perception that they are being short-changed. Such pressures exist at both for- profits and non-profits, of course. Without investors to reap the benefits of new efficiencies and push aggressively for cost savings, non-profits tend to make the switch much more slowly (typically, instead retaining old training and layering a bit of the new on top). Self-interest tends to encourage a more aggressive pace at for-profits.

Of course, the uneven record of the private sector in the last decade reminds us that for-profits have significant limitations—to say the least. The incentive to cut costs can translate into an incentive to cut corners. The urge to grow can lead to unacceptable compromises in quality. These are real concerns that require careful attention. Nonetheless, while ideologically-inspired opposition, unproven business models, and the uneven financial results of some for-profits have raised questions about for-profit ventures, we should not therefore imagine that nonprofits can readily match their dexterity, capacity for scale, and aggressive cost cutting. There is an important role for public entities, nonprofits, and for-profits alike in the vast expanse of American schooling.

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Sandy Kress has this right. Focus on agencies that serve students well and find ways to make them available to families.

Knee-jerk reactions to for-profit companies make me nervous. Profit-seeking companies are organized around a principle of meeting demand. It tends to focus one's efforts. We have created an open hostility to for-profit companies in the public charter school sector, for example, where Arizona is the only state that still allows a direct relationship with for-profit companies.

As Tom points out, private companies can go to scale much more efficiently due to an ability to raise capital on anticipated revenues. If that is a frightening prospect, we are in desperate need of basic economic education.

As a final point worth considering, every venture that owes its existence to philanthropic support also owes an allegiance to the philosophy of that contributor. We have been blessed in the education reform sector with many dedicated philanthropists. But even the most brilliant and powerful philanthropic organization will never be able to anticipate all the desires and needs of this richly diverse and ever evolving nation…especially in the case of small or entirely novel ventures. I have seen philanthropy be every bit as exclusive as any private club, and it concerns me that we will narrow our vision of what is possible or necessary by relying far too greatly on the visions of a few large organizations.

The unique power of capitalism and profit seeking companies is that they go where nobody has gone before, they risk their time and money on desperately needed innovation, and when successful, they succeed at expanding the economic base of this country. Their most powerful contribution, in my view, is the ability to create permanent wealth and new opportunity in communities where it didn't exist before.

Let's just keep asking what parents seek for their children, and let every effective company and organization offer what they need. I think that can take us down a pretty powerful path for kids.

School districts have trouble investing in innovation. Nonprofits have difficulty scaling. Private enterprise is uniquely well suited to produce and scale innovation. Education is the only public delivery system in the US where private enterprise is relegated to fringe involvement—which explains why we don’t have the tools and schools our kids deserve.

By the end of this decade most US students will attend a school that blends online and onsite learning. Blended formats featuring personalized digital learning hold the potential to improve learning, staffing, and facilities productivity.

Districts and nonprofit charter holders interested in creating a new blended school or converting an existing school have a variety of quality partners to choose from. State virtual schools in Florida and North Carolina serve over 200,000 students and provide experienced support to schools incorporating online learning. Virtual education providers including K12, Connections Academy, KCDL have experience running statewide virtual charters and are beginning to work with districts to create effective and efficient blended models.

City Prep, an organization I lead, is the first blended learning service provider. We’re working with nonprofit charter holders and school districts to create a new generation of engaging and effective urban high schools.

The fiscal crisis is forcing districts to create ways to serve students better for less money. AdvancePath runs academies that serve over-aged and under-credited better than most district alternative high schools and often for half as much (I’m a board member). By soliciting a partner right now, a district could expand and improve STEM and college credit options offered in September and save money.

US education needs an order of magnitude increase in R&D to produce the tools and schools our kids deserve. We should take advantage of inherent incentives that private enterprise has for speed, quality and scale by increasing the number of public-private partnerships for student achievement.

The assumption in the question's introduction makes no sense. You can make arguments that including the private sector is important for a variety of reasons, and the private sector is involved in all sorts of areas in schooling, from textbooks and testing to school construction. But it’s foolish to think that if a state hands over virtual-school authority to a private firm, somehow the state's taxpayers will save money. If someone invests in a business, they’re going to want a return on that money, and that’ll mean public money. And at least in Florida, the public state virtual school is operated well and has a great reputation. In the past two years, the Florida legislature has undermined the Florida Virtual School by mandating that each district create its own program, and many observers assume that was a maneuver to give an opportunity for favored private companies to feed at the public trough. The excuse in Florida may be to save money, but the reality is that the legislature threatens to ruin the national model of secondary-education distance learning.

This is the wrong question. Indeed if a district or state is contracting with an EMO just to make money, it shouldn't. And if a district or state is refusing to contract with an EMO because it makes a profit, it shouldn't.

The question instead is whether an EMO would enhance the achievement of students, as against current management. If an objective analysis shows it would, then contracting serves "the educational needs of children," and the state or district should do so.