Charter University: a new paradigm: the capitalist model for American academics is overcoming its beginnings as a challenged idea.

IT HAS NOW BEEN NEARLY 15 years since the first public policy debates emerged surrounding the invention of charter colleges or universities.

Few higher ed insiders took these charter proposals seriously when they were first introduced. After all, the only credible organizations that were pushing charters were like-minded, conservative think-tank organizations (Pioneer Institute, Empire Foundation, et al.), as well as a few private businessmen who yearned for an opportunity to run institutions of higher learning "like their businesses."

Some observers soon recognized, however, that colleges and universities could be operated in a more businesslike fashion--empowered through fiscal and managerial autonomy and lured by public funding incentives in exchange for increased academic productivity and improved student performance.

Early on in the national charter conversation, public faculty unions successfully opposed the proliferation of charter college and university proposals based on prognostications of academic quality erosion, the creation of academic sweatshops, and the dire consequences of operating under the radar of public accountability.

Lost in the din of political static is a new wave of public expectation for doing more with less in public higher education that has rekindled the charter debate. As the middle class feels increasingly squeezed out of private higher learning options, the charter concept is likely to have increasing appeal--particularly in the court of public opinion.

Perhaps, more than any other chatter experiment, St. Mary's College of Maryland, a public liberal arts school, set the benchmark performance bar for contemporary charter colleges and universities.

By agreeing to a predictable lump-sum state appropriation in consideration for broader autonomy, St. Mary's was able to increase both friend-raising and fundraising, improve student academic performance (higher conversion yield, retention, persistence, and program completion rates), and, impressively, increase its academic ranking, reputation, and ability to attract a well-credentialed liberal arts faculty and a better academically prepared student body.

While opponents to the original charter proposal predicted catastrophic implications--increased tuition pricing and loss of tenure--history has proven these concerns largely unfounded. Indeed, even though St. Mary's tuition increased significantly, increased external funding was reinvested in need-based financial aid, producing a more selective market position and a more diverse admissions pool.

OPTING OUT OF THE CHARTER DEBATE

For all of the apparent advantages to charter colleges and universities, many institutions remain on the sidelines of the debate out of concern that charter schools will drain the precious talents and resources from multicampus systems--creating an imbalance in favor of a few select institutions. On the other side of the fence stands a growing chorus of voices within the business community, people who recognize the upside of deploying a risk-and-reward system of targeted incentives.

Over time, the charter college and university movement has spread to a wide array of specialty institutions--like Colorado School of Mines and Massachusetts College of Art. There are even charter colleges of education like the ones at California State University Los Angeles and Berry College (Ga.).

For those who remain skeptical about the sustainability of the charter college and university movement, they need look no further than the most recent enactment by the Virginia Legislature, which designated charter status for UVa, Virginia Tech, and one of the nation's oldest and most venerable institutions, The College of William and Mary.

Clearly, charter college and university status is not for the faint of heart. In point of fact, the charter process is designed to place institutions in an open, competitive market position, relying on their intuitive wits to anticipate change and reinvent themselves in a highly fickle student consumer market.

Like the proactive mice-like creatures in Spencer Johnson's business epic Who Moved My Cheese?, charter colleges and universities that anticipate the winds of inevitable change in higher education will succeed as national role models spurring peak performance from both public and private institutional peers.

SPOTTING A CHARTER PROPOSAL

Recognizing a charter proposal as such can be o challenge because proponents may call the idea by another name. Here are some ways to sort it all out:

* Know the likeliest candidates. In most cases the charter institution will not be the venerable land-grant research university. It is more likely the proposal will focus on a small specialty institution--the kind of entrepreneurial college or university that needs to distinguish itself from other public campuses within the same statewide system.

* Understand the concept. The charter concept revolves around a set of covenants between a public institution and the state. The flexibility and latitude to establish new programs in response to fast-shifting demographic, educational-attainment, and career-preparation trends lies at the heart of the concept. In the purest form, charter colleges and universities must balance autonomy, nimbleness, and accountability.

* Look for autonomy. In virtually all cases, the charter institution has authority to set its own tuition and fees as well as retain both tuition and non-tuition revenues streams for future reinvestment. Similarly, most charter colleges and universities aim to enjoy a full measure of autonomy in budgetary, personnel and administrative matters, including procurement, capital outlay financing, and construction.

James Martin is a professor at Mount Ida College (Mass.). James E. Samels is president and CEO of The Education Alliance. Their book is Presidential Transition in Higher Education: Managing Leadership Change (Johns Hopkins University Press, 2004).