This year’s edition of Hopes, Fears, & Reality explores the broad realities of the present-day charter school movement. In this chapter, CRPE authors report the results of their new study of charter school “hot spots” around the nation, examining how city school districts that lose students and funding to charter schools can help their schools compete. The authors show that these school districts are not doomed to failure, and they describe in detail how one district is responding to intense charter school competition.