Money diverted?

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Rocketship’s Mantra on revenue generation to fund growth, from recent board reports.

Morgan Hill’s staff report on Rocketship’s charter application raises questions about how money is spent by Rocketship.  Rocketship spends more than twice that of Morgan Hill on management services.  They send a whopping $1.8 million dollars a year out of the community in management fees, but it’s unclear where it’s used.  They spend 44% of revenue on compensation, whereas Morgan Hill spends 80-85% on compensation.  Rocketship’s recent board report seem to indicate that the money will be used to fund growth in other regions or states.  The potential implications are clear:  students are subjected to extremely high student to teacher ratios and spend inordinate time on computers all to generate growth in other regions or states.  At, we strongly believe that state tax money should be spent in the communities for which it is earmarked.  We also raise questions about oversight to prevent the possibility of abuse by Rocketship, a private corporation.

From Morgan HIll’s Charter Petition Denial:

The management fees paid to Rocketship Education total 35%: 15% for management services and 20% for facilities. For comparison purposes, MHUSD administrative charge for 2013-14 is 6.14% and 9% of the budget Is dedicated to facilities

Staff is concerned that local funds generated by RSMH would be used to support other Rocketship schools. This is supported by statements in Rocketship’s Board materials, “LaunchPad will charge relatively high facilities fees; the profit will be used to finance new facilities and cover LaunchPad operating costs…”  The Articles of Incorporation indicate the Board of Directors may receive compensation; it is unclear if local funds would be used to financially support a Board of Directors serving other schools and in a multitude of stales.

Compensation as an overall percentage of the total budget is 44% in 2014-15, 45% in 2015-16, and 43% in 2016-17. Historical data indicates that compensation typically represents 80-85% of a district’s total budget. Staff notes that lower compensation may hamper the charter school’s efforts to attract and retain qualified staff.

Rocketship’s charter application shows very high management fees flowing out of the community, back to the national offices. Morgan Hill questions whether those could be used in other communities, or even out of the state.
Rocketship’s charter application shows management fees total more than Salaries.