The city’s most established for-profit charter school management company is rebranding and recreating itself in light of a new law that forbids the group from running schools.

As of tomorrow, Victory Schools will be named Victory Education Partners and it will no longer be a traditional management company. The group will retain its for-profit status, but will continue to work in schools by offering a variety of services, from professional development to back-office support, that schools can choose to purchase.

The change was prompted by the passage of a new law last spring that doubled the cap on charter schools, and also barred for-profit companies from operating or managing new charter schools. One of three for-profit charter management groups work with New York City schools, Victory had to change or close shop in the city. It’s choosing to change.

Since 1999, Victory has managed 13 New York charter schools and it continues to run seven of them in the city, with an additional two in New York State. Most of them began when community or church groups discovered the charter management company and signed five-year contracts for services that came as one package. A contract with Victory meant the company would oversee everything from professional development to payroll.

Under the new law, Victory can continue to manage these schools — Stovall calls them his “legacy clients” — but it can’t open new ones in New York. In other cities where Victory works, such as Philadelphia and Chicago, it can continue to run schools.

But in New York, the company is evolving in accordance with the new law.

“Going forward, we are unbundling our services,” said James Stovall, who become Victory’s CEO in June. Instead of hiring Victory for all of their management and instructional services, schools will be able to pick and choose from a menu.

“So if a school wants to hire us to provide just leadership coaching, they can do that,” Stovall said. “If a school wants to hire us to provide their accounting and finance functions, they can do that.”

In addition to allowing schools to pick from a menu of services, Stovall said the company wants to get involved in turnaround schools. In the next year, New York City may begin closing as many as 47 schools, and the Department of Education is likely to replace some of them with charter schools that could buy services from Victory.

The new law that bars for-profit companies from managing charter schools is vague about precisely how involved a company can be before it crosses the line into management. One problem Victory may face is how to define that line.

“I’ve heard tossed around that well, as long as you stay below 50 percent of a school’s total number of outside vendor services, you’re safe,” Stovall said.

Executive Director of SUNY’s Charter School Institute Jonas Chartock said the charter school authorizer would look at a variety of factors to decide whether a for-profit company was overstepping the law’s bounds.

“We would not view the provision of back office services only (payroll, benefits management, accounting,
etc.) to be a violation,” he wrote in an email.

“At the other end of the spectrum, a full-service, sweep contract where the management provider receives all funds after expenses certainly would violate the law,” he said. Chartock said that SUNY would also look at how much of a school’s per pupil funding was going to pay a vendor’s fees.

“Anything over 8-10 percent would be worthy of further review and look like a more traditional management model, whereas a 3-5 percent fee would be more typical of a back-office only arrangement,” he wrote.

Established in 1999, Victory has had a mixed record in New York City. While some of the schools it helped start, like the South Bronx Charter School for International Cultures and the Arts, have earned top grades on the annual progress reports, others are struggling. The Sisulu-Walker Charter School — the first school Victory opened — went from an A last year to landing on the list of the 15 lowest performing elementary and public schools this year.

Victory has been targeted by the city’s teachers union for how much it charges schools. An analysis by Kim Gittleson showed that Victory charges schools an average of 17 percent of their per-pupil funding, or about $2,000 per student. Non-profit management groups charge their schools an average of 7 percent of their per-pupil funding, or about $1000 per student. According to Victory officials, their company charges more because it offers more support to its schools.

The union has made inroads at three Victory-run schools, where teachers voted to unionize after relations between’s the schools’ administration and staff broken down.

List of schools Victory manages:

NYC:

New World Preparatory (Staten Island), Merrick Academy (Queens), Bronx Global Learning Institute for Girls (Bronx), New Hope Academy (Brooklyn), New York City Charter High School for Architecture, Engineering and Construction Industries (Bronx), Sisulu-Walker Charter School of Harlem (Manhattan), South Bronx Charter School for International Cultures and the Arts (Bronx)

New York State:

Academy Charter School (Hempstead), Charter School of Educational Excellence (Yonkers)

Victory also helps several non-charter high schools and advises their principals. Those schools are:

August Martin High School
Herbert Lehman High School
High School for Media and Communications in Manhattan
High School for Law and Public Policy in Manhattan