Praying for dollars: Erskine looks to charters for needed revenue, students

DUE WEST — Charter schools could be an answer to Erskine College’s prayers after years of financial woes.

Erskine’s last tax filing that showed its revenue outpaced its expenses was for the 2006-07 fiscal year, which wrapped up more than a decade ago. Since then, the college has depleted a quarter of its endowment while consistently operating in the red.

Erskine made waves this summer when it announced it would start sponsoring K-12 charter schools with its Charter Institute — it’s the only higher education institution in South Carolina to do so outside of a brief stint by South Carolina State University in 2014.

For every charter school the college sponsors, it gains 2 percent of the school’s state appropriations.

Erskine administration could not be reached for this story after multiple unreturned phone calls, voicemails and emails over the span of more than a week.

Power to the church

In 1978, Erskine’s Board of Trustees voted to do what no board has ever done — give its power to the Associate Reformed Presbyterian Church.

The ARP Church today is a remnant of what was a much larger denomination that broke off into a smaller group of just the southeastern Synod of the church, which was formed in Abbeville County.

Erskine College and Theological Seminary was founded by the ARP Church in 1839, but until 1978, the church only had the power to appoint several members of the then 32-member board.

In 1978, the Synod of the ARP Church requested to Erskine it be allowed to appoint all board members, according to minutes from the June 3-5, 1978 meeting, and Erskine’s board complied.

Aldon Knight said it was at that point Erskine got on the tracks leading to where the college stands today.

Knight grew up living and breathing Erskine — his parents attended Erskine and his dad was a top administrator in the 1970s when Knight was a child, and in 1990, he got his bachelor’s degree in history from the college before getting his masters in public administration from Clemson University. From 1995-2000, Knight was also the director of annual giving and alumni affairs at Erskine.

For the past 40 years, Knight said the ARP Church, as well as Erskine, have become more fundamentalist in their views.

In recent years, anyone applying to work at Erskine must sign a form affirming their religious views align with the ARP Church, as well as a “Statement on Human Sexuality.” The views they must affirm include that abortion is a sin, that “in all instances, one should seek to preserve the life of the unborn child,” that homosexuality is a sin and monogamous marriage is “God’s intended design for humanity.”

“It’s gone through iterations where even factions of the church that it’s still affiliated with are now not accepted by the powers that be,” Knight said. “It’s gotten narrower and narrower and narrower, and even as late as the ‘90s, there were 33 denominations represented in the Seminary. So the Seminary was training ministers and Christian ed. leaders for 33 denominations as recently as 20 years ago, and now there’s not.”

In 2010, Erskine sued the ARP Church after its General Synod fired half of the college’s 30 board members and created its own interim board during a special called meeting in North Carolina.

The firing came after the Synod formed a commission and conducted a six-month investigation to see if Erskine was “in faithful accordance with the standards of the ARP Church.”

At the time, Bill Marsh, vice chairman of the commission, said the church’s directives had not been heeded by Erskine and the decision to dissolve the board was paramount to the stability of the school.

“We felt like for Erskine College to move forward, the church needed to speak into the confusion and say, ‘This is what we want; go do it,’” Marsh said at the time.

But a spokesman for the school at the time, Rick Hendricks, said the ARP Church only contributes about 2 percent of the school’s budget.

“Bottom line — the ARP Church does not own Erskine College,” he said.

The college ultimately dropped the suit, but another was filed by some of the dismissed trustees along with the Erskine Alumni Association. The suit was again dropped, and Erskine officials said they had reached a compromise outside of court.

A proposed policy in 2011 would have allowed the church to remove trustees, but the vote failed to pass Erskine’s board with a two-thirds majority in 2012.

An outspoken critic of the college’s conservative leanings, former tenured professor of English at Erskine, William Crenshaw, sued the college after he was fired in 2011 for what he said was a predictable and inevitable symptom of the “new Erskine disease.”

A letter to Erskine from the American Association of University Professors questioned and criticized the decision to release Crenshaw.

Knight said the college’s far-leaning views have begun to alienate faculty and students and has resulted in a drop in alumni giving.

“The majority of alums at Erskine would have a very tolerant Christianity — would be good citizens and people that are well-placed in the world,” Knight said.

In 2011, the Alumni Association sent out a survey after it noticed a three-year pattern of decline in donations from alumni of the college. The survey was sent to 3,586 alumni who had donated to the college in the past 10 years, with 926 responses. 96.3 percent of respondents said they were Christian, while 25.2 percent identified with the ARP denomination.

The survey showed about 46 percent of the respondents had withdrawn or decreased their giving to Erskine. The top three reasons for withdrawn and decreased donations were: the commission’s dismissal of half of the college’s board, a change in policy at Erskine affirming the “inerrency” of the Bible and the proposed policy that would have allowed the church to remove trustees.

In 2015, the college made national headlines after it announced its “Statement on human sexuality” — the same statement faculty must agree with to be employed at the school.

Two athletes on the volleyball team at the school had publicly come out as gay in a story published on Outsports.com one year before the statement was released. Both of them have said they believe the statement was released because of them.

As a result, both athletes transferred out of Erskine, although president of the school at the time, Paul Kooistra, said the statement had nothing to do with the athletes and had been developing it for 2 1/2 years.

A decade in the red

Kooistra came on board at Erskine in 2014 after the school had been placed in warning status from the Southern Association of Colleges and Schools Commission on Colleges (SACSCOC) for two years for financial instability.

In 2014, the college had a $3.4 million deficit, which shrank to $950,067 in 2015, but in 2016, the school was in the red by $1.2 million.

The college hasn’t seen a surplus in a decade — in 2008, as the nation faced the Great Recession, Erskine bled $8.4 million in losses. Since then, the school’s had a steady annual deficit anywhere from $950,000 to $5 million.

At the same time, the school watched its endowment fall from $52.3 million to $35.3 million, with an $8 million investment loss in 2008 and several years of tepid earning accounting for part of the decline.

Total enrollment has steadily fallen since the 2008-09 school year, according to the U.S. Department of Education’s Integrated Postsecondary Education Data System. While the undergraduate population has remained relatively static, the number of graduate students has dropped by nearly half, plunging the total student body to 822 from 1,013, or an 18.9 percent drop, in that span.

In December 2014, Kooistra announced major cuts to keep the college afloat — the entire Department of Foreign Languages was eliminated, tuition was increased, salaries were slashed from 5 to 30 percent and several faculty positions were cut.

The college was placed on probation by SACSCOC that same month, which is one step away from being denied accreditation. However, a year later, Erskine was removed from probation as Kooistra announced the school was stable financially.

This year, Erskine filed its 2015-16 990 forms in April, which show a $1.2 million deficit. An audit for the 2016-17 fiscal year, filed in September, showed the financial situation might be improving — the endowment grew to $38.6 million and revenue outpaced expenses by $1.7 million, though the statement of financial position in the audit calculates revenues and expenses differently than the federal tax form.

“I have lived this my whole life,” Knight said. “It’s probably going to take Erskine getting to the point of closing its doors before people really push the panic button and figure out it’s urgent and want to get involved.”

A hail Mary?

On Nov. 3, the college accepted 10 charter schools into its fold and boasted it had already received an additional 24 new charter applications.

If Erskine accepted each of the schools, it stands to gain 2 percent of the 34 schools’ state appropriations. Since the Charter School Act of 1996 became law, charter schools receive state funding similar to public schools.

Nine of the 10 schools Erskine accepted in November are already established charter schools sponsored by the South Carolina Public Charter School District.

If Erskine sponsored just those nine schools, it would receive about $1.1 million a year based on the 2016-17 state appropriations.

In unapproved minutes from the Alumni Association’s Oct. 28 board meeting, alumni asked Erskine President Robert Gustafson why the school was getting involved with charters.

According to the minutes, his response was that the sponsorship would give the college an opportunity to have a relationship with more than 25 “Restoration Schools that educate with a classical model,” more than 1,000 graduates a year and a “pipeline for admissions.”

Gustafson told the board there is zero expense from Erskine, but the college will gain 2 percent of the charter schools’ administration fees.

“It may work, and it may not, but there is no reason not to try it,” Gustafson said, according to the board minutes.

Alumni board secretary Ashley Weyers confirmed the minutes were accurate.

Battle over transfer schools

When Erskine announced its Charter Institute this summer, it also announced there were already two schools interested in joining — Cyber Academy of South Carolina and South Carolina Virtual School.

Both schools were already charters sponsored by the S.C. Charter School District, and both had turbulent relationships with the district over their “breach” statuses.

The district has four “statuses” it labels districts based on annual evaluations — good, caution, breach and revocation. When a school reaches revocation, its charter is not renewed and the school can no longer operate.

This status lies at the crux of a battle between the charter district and Erskine — district officials have said they don’t want to risk “authorizer shopping” by letting a failing school jump sponsors in order to evade accountability and remain open.

Elliot Smalley, superintendent of the South Carolina Public Charter School District, said the job of the sponsor — also called authorizer — is to hold charter schools accountable while they retain the autonomy to operate how they want and make their own school-level decisions.

This autonomy means the schools’ performances are their own responsibility — not the sponsor’s — but that they must be held accountable if they’re under-performing.

“This isn’t about Erskine or any other charter authorizer — it’s about the simple truth that chronically failing charters schools don’t do better when they escape accountability by hopping from one authorizer to another,” Smalley said. “Charters that have failed to turn this autonomy into results year after year are not going to improve just because they switch a sponsor — they will continue to shortchange taxpayers and fail students, and this not only violates the terms of their charter contracts, but is disastrous for the citizens and future of South Carolina.”

But the failing transferring schools told Erskine their breach status is not justified and based on a “performance framework” they don’t agree with — another point of contention with the charter district and the schools, one the district argues is unsubstantiated because all schools had input and were involved with creating the framework.

Erskine Charter Institute officials told the schools at a meeting in October they would independently evaluate their performance and status with the district, but until then the schools would keep their breach statuses if they are able to transfer.

Since the two virtual schools announced their intent to transfer, seven other schools with the charter district also asked to transfer to Erskine. Of the nine schools, five are in breach status because of poor academics, two are in caution and two are not eligible for statuses because they were opened less than two years ago.

Four of the schools are also being audited by the state Office of the Inspector General over attendance data, which is a factor used to determine a school’s state appropriations.

According to the S.C. Charter Act, both the current sponsor, the transferring school and the new sponsor have to agree to a transfer for it to happen. It’s because of this law the charter schools cannot simply leave the district for another sponsor.

Since no school has requested to transfer out of the S.C. Public Charter School District before, the district did not have a procedure for the process. In September, the charter district’s board members reviewed a transfer policy that would not allow schools in breach status to transfer — the policy would also require board members to take into account the best interest of students and if the new sponsor has the capacity to handle the school.

A report from the National Association of Charter School Authorizers (NACSA) said authorizer shopping is a “growing threat” to the charter school movement, and the CEO of NACSA, Greg Richmond, urged the district to approve the policy, essentially denying breach schools the ability to transfer.

The district is expected to make a decision today on the nine transfer requests.

A political game

When Erskine announced its Charter Institute in August, Gov. Henry McMaster — a member of the ARP First Presbyterian Church in Columbia — praised the college on Twitter, and when questions arose surrounding the 2 percent Erskine would receive, McMaster asked for an Attorney General opinion that said the private college should be able to receive the state funds.

This isn’t the first time McMaster has publicly supported charter schools — in August, he told the audience of a Charter Schools USA summit in North Carolina that his politics would align with charter schools.

“There’s a lot of politics involved often in getting things set up, and whatever politics I can bring to bear is on the side of the charter schools, wherever we can set them up,” McMaster told the crowd. “And we want more of them because we know they work.”

McMaster attended the groundbreaking of Mevers School of Excellence earlier this year in Goose Creek — one of the nine schools seeking to transfer to Erskine.

Charter schools have been at the forefront in politics and the Department of Education’s policies after prominent charter movement supporter Betsy DeVos was confirmed as secretary of education earlier this year.

Money to gain from charter schools

Charter Schools USA is a for-profit education management company based out of Florida that donated $3,500 to McMaster’s 2018 campaign for governor. K12 Inc., a for-profit company providing curriculum to the two virtual schools in South Carolina that initially sought to transfer to Erskine, also donated $3,500 to his campaign this year.

Companies profiting off of charter schools have been under scrutiny in other states in recent years — a study from the Center for Research on Education Outcomes (CREDO) released this year said students managed by for-profit companies performed worse than students at charters managed by nonprofit entities.

In South Carolina, K12 Inc. donated $1,000 to Rep. Bill Whitmire’s campaign last year. Whitmire is the chairman of the Ways and Means committee that controls the charter district’s budget.

In October, Whitmire told Smalley he wouldn’t like it if the district passed a transfer policy banning breach schools from switching sponsors.

“I can’t speak for the rest of the committee members, but I would not like it if your board passed something that says they cannot leave on accord, that’s just me personally,” Whitmire said at a committee meeting with Smalley.

Whitmire is not the only legislator to speak up about the proposed policy.

Rep. Shannon Erickson told the district to “be wary” of policies that don’t have choice at the forefront. Erickson also received $1,000 from K12 Inc. last year.

The study done by CREDO places the blame on both authorizers and legislators for low-performing schools nationwide within the charter movement.

“Some charter authorizers are not holding their schools adequately accountable. Why are charter schools with weak academic track records allowed to replicate? Why are some networks with terrible average growth allowed to continue to operate multiple schools? Charter school authorizers are charged with acting as the gatekeepers to ensure schools of choice are beneficial to their students. Some of them seem to be abdicating that responsibility,” the study concludes. “If authorizers will not step up to their responsibilities to regulate charter performance, then legislatures need to acknowledge their responsibilities to regulate authorizers.”