Charter network expanding amid scrutiny

SAN DIEGO — The Inspire network of 12 home charter schools is quickly spreading its reach across California amid questions about its educational, organizational and financial practices.

At the heart of the Inspire network is a corporation whose chief executive makes about $380,000 a year and who helped create the Inspire schools, which now pay his corporation 15% of the taxpayer funds they collect.

Inspire has grown in part by advertising that parents can decide how to spend $2,600 or more a year toward their child’s education, with a teacher’s approval. Inspire operates on the idea that parents should have freedom to decide how their children are educated.

Inspire parents have been able to spend stateprovided money on expenses they say are educational, including Disneyland annual passes and private ice-skating coaching. School funds could also be spent at Costco, Amazon, Big Air Trampoline Park, Medieval Times and Guitar Center, according to Inspire’s list of approved vendors.

Meanwhile, Inspire students are required to meet with teachers and turn in assignments once a month.

The charter network is based in Duarte and enrolled 23,400 students last year. State data show that Inspire schools underperformed academically.

Last year, all Inspire schools performed below the state average in English and math test scores, with some schools showing as few as 16% of their students passing math and as few as 25% passing English.

The state average is 39% for math and 50% for English. Inspire schools had an average graduation rate of 69% last year and produced seven graduates — out of 209 — who met California state college or university admission requirements.

In a statement, Inspire said it is taking steps to improve its academics. For example, it said it will require students to take courses that qualify for state college or university admission for core subjects, and that it will use intervention programs to address struggling students.

Inspire also says that students improve their performance the longer they are enrolled. Regardless of performance, Inspire schools were paid more than $100 million in state funding during the 2017-18 school year, the latest year for which Inspire school audit reports are available.

That number will increase as Inspire continues to open more schools and enroll more families, because state funding is based on the number of students attending a school.

Since 2014, Inspire has grown to include a dozen schools across California. This year it expects to grow by 12,000 students, having opened four schools in 2019.

At least two more will open this month, according to Inspire. Inspire expects to pull in $285 million in state funding this school year.

“Overwhelming parent demand has led to the opening of several additional schools as well as the growth of existing schools,” Inspire founder and CEO Herbert Nichols said in a statement.

Inspire has been submitting petitions to districts this summer to open new schools, but it withdrew at least two after district officials questioned Inspire’s practices.

On July 12, a lawyer for Irvine Unified School District wrote a letter about an Inspire school proposal; he included 141 requests for information from Inspire about its enrichment fund practices, finances, academic performance, the school’s relationship with the larger Inspire organization and more.

Inspire withdrew petitions from Irvine Unified and from Placentia-Yorba Linda Unified last month.

Meanwhile, Lucerne Valley Unified and Lake Elementary school districts each approved a new Inspire school in June. Inspire has opened schools swiftly despite a history of ending fiscal years in the red and extensive cash borrowing.

In 2016, the latest year for which an Inspire Charter Schools tax filing is available, the organization ended the year $18 million in the red after taking in $76 million in state funds.

More recently, budgets say that Inspire schools will be in the black, but the schools rely on borrowing to make ends meet.

During the 2017-18 school year, six schools took out $93 million in high-interest loans and failed to pay off $28 million of that by the end of the year, according to the audit reports. The schools paid $6 million for interest, with rates of 14% to 47%.

This year, Inspire applied for and was granted a loan of up to $50 million from the California School Finance Authority at the same time it has at least $37 million in other outstanding debts.

Nichols attributed the need for borrowing to Inspire’s rapid growth and the fact that state money for new students doesn’t come until later in the school year. Although it is common for school districts and charter schools to borrow money for that reason, they are expected by law to pay off such balances by the end of the fiscal year.

Inspire’s practices have raised red flags among school district officials and charter school advocates.

Some charter school leaders who spoke to the San Diego Union-Tribune said they have distanced themselves from Inspire.

Jeff Rice, director of an organization called APLUS+ that provides support to personalized learning schools like Inspire, said he removed Inspire as an APLUS+ member school in 2016 because of questionable practices he saw in Inspire.

“We are all concerned about actors like this who are repeatedly violating generally acceptable best practices,” Rice said.