Charter Schools
Charter Schools are publicly funded schools that operate without many of the traditional regulations found at other public schools. Generally accountable to a state or local school board, their goals are to produce positive academic results and to comply with the charter contract.

The "charter" establishing each school is a performance contract detailing the mission, program, goals, students served, methods of assessment and ways to measure success. The length of time for which charters are granted varies, although most are granted for 3 to 5 years.

Privatized Schools
Privatized Schools are operated by for-profit companies. The school or school district negotiates a contract with a private firm or education management organization and pays them an amount that varies from district to district. The company pays the school's operating expenses - and in some cases teacher salaries - and keeps any capital remaining.

The companies have the right to use their own curriculum and create their own rules, constructing the school day as they see fit, although they must still comply with all state and local regulations and reporting requirements. Also, the students must still take the same mandated standardized tests that other students at traditional public schools take.

In some cases, the companies behind privatized schools can hire and fire employees and don't answer to teacher unions. In the case of Philadelphia's effort, companies entered into specific contracts under which school employees remain members in their unions and work under existing collective bargaining agreements.

As in business, if a district is dissatisfied with the company's product, it can cancel its contract whenever officials decide it is necessary.