What Affordable Private Schools Teach Us About Social Enterprise

The hype around social enterprises often trumps a deeper investigation and critique of the challenges facing those organizations.

After spending nine months exploring affordable private schools (APS) and social enterprise in India, I’ve noticed a number of challenges with APS that also apply to social enterprises more broadly. Below, I discuss three critiques and myths about affordable private schools, and offer some lessons that those working in the social enterprise ecosystem can take into consideration for their own work.


James Tooley, one of the foremost scholars and champions of APS, argues that APS are a great model for education because they are based on market and behavioral economics. In government schools, the government pays teachers regardless of their impact on learning outcomes, and students attend for free. Therefore, the argument follows, government schools have no accountability to provide quality education. Champions of APS argue that because parents pay schools fees for student attendance, and teachers are paid by the school, the school and teachers are more accountable to provide quality education.

But my on-the-ground experience with APS has shown that accountability isn’t always in place at APS and is more complex than many recognize.

Unlike consumers of everyday products–where consumers can buy a product and whether they use it or not once they’ve purchased it is of no harm to the company–accountability in APS, and in education broadly, actually needs to work both ways. It takes not just the school owner and teachers, but also the parents to make accountability work.

The best example of this is persistent parent failure to pay school fees—a difficult problem that school owners constantly lament. If fees are not paid on time or in full, it creates a number of monthly and annual financial sustainability problems for the school that affects the hiring of quality teachers, extracurricular opportunities, and service provider payment.

Most parents struggle to pay fees not out of choice but because their low, irregular wages make paying monthly fees difficult. In other cases, parents have the money but don’t bother to pay on time, or fathers pocket the money for alcohol (schools like to note that working mothers typically, and proudly, pay fees whenever they can). In either case, the school owner is often too lenient and waves or delays fee payment because they recognize the circumstances of the community they are working with. Currently, there are no mechanisms in place to make parents accountable to the school to pay fees on time and in full (regardless of individual circumstance) beyond preventing students from taking exams, or in drastic cases, kicking students out of school. Every exam period, parents flood to the school to argue for a fee waiver, or pay just in time for their child to take the exam.

Some argue that fees ultimately even out at the end of the year, but that doesn’t help when teacher salaries and service providers depend on monthly payments. Parents then complain about the quality of the school, but when they don’t pay fees, they are also accountable for the school’s limitations.

Help with Accountability: Social enterprises should put programs in place to help their beneficiaries become more accountable. In the APS context, this could mean financial education or job training programs for APS parents to help them make more regular payments, or stricter fee payment tracking and policies. For a health organization, this could mean creating an accountability feedback loop to ensure that beneficiaries are regularly taking their medicine or getting tested.

Enrollment and Quality Service

One common argument used in favor of affordable private schools is that parents know which schools are the best and this creates a free market for school choice–the best schools will rise to the top and the others won’t have customers. In addition, some, such as education panelists at the Khemka Forum on Social Entrepreneurship in December 2012, argue that parents use enrollment as an indicator to know which schools are the best. I have come to believe that this is flawed logic.

While it’s true that parents do discuss schools with others in the community, ultimately, I’ve found that school choice comes down to location, peer pressure, and fees. Parents willing to pay a substantial portion of their already low-income care about their children and their education more than anything else. But the vast majority of parents that send their children to APS are also a product of APS or government schools themselves, and don’t know how to evaluate a quality education that teaches English accurately and the skills necessary for the middle-class careers their children aspire towards. And unfortunately, they too often fall prey to the myth that private, English-medium education is better than government school education, even when that may not always be the case for the schools in their neighborhood.

The reality that I’ve observed is that parents make school decisions based on local factors. Many parents experience pressure from the school owner, who may be a neighbor, relative, or family friend, to send their children to their school. If you ask some parents why they send their children to a particular school, they will often mention the influence of the school owner in their decision-making. Another factor is school availability in neighborhoods. In more densely populated areas there may be several APS to choose from. But in other areas, between the choice of the local government school and two local APS, many parents may often choose whichever one is closer to home or which has lower fees for convenience (or a school owner more lenient with fee payment). After narrowing down choices based on these local factors, parents often look at issues such as whether the school has a computer lab or playground.

In addition, higher enrollment does not signify better quality education. Schools with fee troubles will try to increase enrollment to gain more fees, but schools with fee problems tend to have a number of educational quality problems as well. And in some cases, higher enrollment can even mean worse education due to crowded classrooms and lack of teacher attention to individual students due to higher teacher-student ratios.

Numbers served does not signify quality: The number of people a social enterprise serves does not equate to quality service or a “better” social enterprise. Beneficiaries of social enterprises may be using a social enterprise’s service not because they are the best, but because they are the only option around or because of local pressures. Yes, perhaps this means a social enterprise is meeting a local need, but that doesn’t mean that they are necessarily providing a quality service.

Impact Assessment

Assessors of APS often look at the number of students that pass their final State Board exams after 10th class. This is a problematic evaluation metric for education, and ignores the fact that APS spend the entire year teaching students to memorize curriculum and test questions in order to take these exams.

Others have tried to be more creative in school assessment. India-based Gray Matters Capital created a ranking mechanism to assess APS on a number of factors including school infrastructure, parent evaluations, school finances, and learning outcomes, from which they conduct analysis on APS and provide information of the ranking to schools. But their assessment mechanism is focused on school conditions and learning outcomes, and the accuracy of the evaluation has mixed reviews, in my own opinion. (Full disclosure: the Gray Matters Capital Foundation, a parent organization of Gray Matters Capital, sponsored my fellowship in India.)

Instead (or perhaps, in addition) there needs to be more focus on post-APS statistics. If a value proposition of APS is that they provide better quality education and ultimately upward mobility for low-income Indian youth, then there needs to be an assessment of where students go after they attend an APS. How many graduate from Intermediate, from college, and from a post-graduate program? How many dropout and why? How many work as engineers and doctors, and how many take over the family kirana shop or become drivers or maids like their parents? Of course, this data is also valuable when compared to government schools. What are the statistics on graduation and employment for government students compared to APS students? Impact assessment of schools needs to go beyond immediate outcomes, but this hasn’t be done because schools don’t keep in touch with or track alumni in a formal manner.

Rethink Impact Assessment: We need to be more creative with how we assess the impact of social enterprises. One form of impact assessment that is becoming more popular is Most Significant Change, which involves various levels of stakeholders deciding what to measure and collecting stories of significant change from the field, and then forming teams to evaluate the stories and the value of the reported changes. But even when focusing on more quantitative data, impact assessors should look long-term and judge by what happens to beneficiaries after they leave a program.

Social enterprises are constantly adapting and improving. This requires those of us working in social enterprise to test out and offer solutions, as well as be more honest and critical of the solutions we are working with. The problems facing affordable private schools can serve as examples to think more critically about our social innovations in order to improve them.


  1. This is a really great, thoughtful post. I absolutely agree that accountability for parents is an issue that should be discussed more. Perhaps schools can take lessons learned by microfinance institutions trying to get members to pay back loans (such as member support groups)? Thanks for the insight!

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