Recent years have seen a growing push toward Portfolio Management Models that incorporate a variety of "providers" operating public schools. One rationale for this is that such organizations can offer distinct and innovative educational practices. This article describes the Diverse Provider Model implemented in Philadelphia from 2002-2008, and the shifts in practices by many outside providers away from distinction and toward alignment with the district approach. Drawing on institutional theory, we examine possible explanations for these shifts, including the particular structures and incentives in Philadelphia and discuss what can be learned about the prospects for innovation through outside providers.