Category: Uncategorized

Demystifying Bond Financing for Charter School Leaders

Charter school bond financing represents one of the most complex yet potentially advantageous funding mechanisms available for educational facility projects. While only 12% of charter schools nationwide successfully secure bond financing, understanding when and how bonds work can unlock significant opportunities for the right schools at the right time.

This comprehensive guide breaks down everything charter school leaders need to know about bond financing, from basic concepts through qualification requirements, helping you determine whether bonds align with your school’s facility financing strategy.

What Are Municipal Bonds and How Do They Work for Charter Schools?
Understanding Municipal Bond Basics

Municipal bonds are debt securities issued by government entities or qualified organizations to finance public projects. For charter schools, these bonds provide access to tax-exempt financing that can significantly reduce borrowing costs compared to traditional commercial loans.

Key Bond Characteristics:

  • Tax-Exempt Status: Interest earned by bondholders is typically exempt from federal and often state taxes
  • Long-Term Financing: Bond terms usually range from 20-30 years
  • Fixed Interest Rates: Provides predictable debt service costs throughout the bond term
  • Large Transaction Sizes: Most bonds are issued for projects of $10 million or more
How Charter School Bonds Differ from Traditional Financing

Unlike bank loans or lease agreements, bonds involve selling debt securities to multiple investors in the public market. This process requires extensive documentation, legal review, and ongoing compliance but can provide more favorable interest rates for qualified schools.

Bond Market Structure:

  • Issuer: The entity responsible for bond payments (often the charter school or related organization)
  • Underwriter: Investment bank that manages the bond sale process
  • Trustee: Third party that oversees bond compliance and payments
  • Credit Enhancement: Insurance or guarantees that improve bond ratings
  • Investors: Individual and institutional buyers who purchase the bonds
When Charter School Bond Financing Makes Strategic Sense
Ideal Candidates for Bond Financing

Bond financing works best for charter schools that meet specific criteria related to stability, size, and long-term planning.

Optimal School Characteristics:

  • Mature Operations: Schools with at least 5-7 years of operational history
  • Stable Enrollment: Consistent or growing student populations with waiting lists
  • Strong Financials: Healthy operating margins and cash reserves
  • Permanent Facility Needs: Schools ready for their “forever home” without expansion plans
  • Large Project Size: Facility investments of $10+ million to justify transaction costs
The Charter School Bond Financing Process: Step by Step
Https Growschools Com Article Best Practices For Charter School Facilities Financing
Phase 1: Pre-Qualification and Planning (6-12 months)

Financial Assessment:

  • Comprehensive review of school’s financial history and projections
  • Analysis of enrollment trends and market position
  • Evaluation of debt capacity and coverage ratios
  • Assessment of cash reserves and working capital needs

Feasibility Analysis:

  • Project cost estimation and budget development
  • Market analysis for proposed facility location
  • Educational program alignment with facility design
  • Long-term strategic planning confirmation
Phase 2: Team Assembly and Documentation (3-6 months)

Professional Team Selection:

  • Bond Counsel: Legal experts specializing in municipal bond law
  • Underwriter: Investment bank to manage the bond sale process
  • Financial Advisor: Independent advisor representing the school’s interests
  • Trustee: Institution to oversee ongoing bond compliance
  • Credit Rating Agencies: Organizations that assess and rate the bonds

Documentation Development:

  • Official Statement: Comprehensive disclosure document for investors
  • Bond Indenture: Legal agreement outlining bond terms and conditions
  • Continuing Disclosure Agreement: Ongoing reporting requirements
  • Credit Enhancement Applications: If applicable for better rates
Phase 3: Credit Rating and Marketing (2-3 months)

Credit Rating Process:

  • Detailed presentation to rating agencies (Moody’s, S&P, Fitch)
  • Site visits and management interviews
  • Financial analysis and stress testing
  • Rating assignment that affects interest rates

Bond Marketing:

  • Investor presentations and roadshows
  • Market timing and pricing strategies
  • Order collection and allocation
  • Final pricing based on market demand
Phase 4: Closing and Implementation (1-2 months)

Final Documentation:

  • Legal review and execution of all bond documents
  • Funding arrangements and escrow establishment
  • Insurance and compliance confirmations
  • Bond delivery and payment processing
Making the Decision: Is Bond Financing Right for Your School?

Charter school bond financing represents a powerful tool for the right schools at the right time, but it’s not suitable for every situation. Success requires careful assessment of your school’s readiness, thorough understanding of the process, and realistic evaluation of alternatives.

The schools that benefit most from bond financing are those that have achieved operational maturity, demonstrated long-term stability, and are ready to make permanent facility commitments that will serve their communities for decades to come.

Whether bond financing aligns with your school’s strategy depends on your specific circumstances, timeline, and long-term vision. The key is making an informed decision based on comprehensive analysis rather than assumptions about what financing approach is best.

Webinar: Top Five Financial Mistakes Charter Schools Make…And How to Avoid Them

Join us for our live webinar this week!

We’re going to answer one really important question, “How do we avoid the top financial mistakes that charter schools make?” We’re being joined by some leaders of Desert Star Academy, SALTech, and Wayne Preparatory – and they’ll be generously and bravely sharing the mistakes they’ve made as charter leaders, and of course how they solved those problems for the future.
We presented some of this content at the National Charter School Conference in Austin, Texas last month to a standing-room-only audience, so we’re bringing it back as a webinar for those that weren’t able to make it out to Austin. Join us to understand the five mistakes and you’ll walk away armed with the tools you’ll need to avoid them.
Our esteemed panelists:
Margie Montgomery, Founder / Executive Director, Desert Star Academy
Michael LaRoche, Founder / Executive Director, SALTech Charter High School
Sharon Thompson, Chairman of the Board, Wayne Preparatory Academy
Tricia Blum, Head of Business Consulting, Charter School Capital

Top Five Financial Mistakes Charter Schools Make…And How to Avoid Them
Wednesday, July 25, 2018
9:00 a.m. PT/ 12:00 p.m. ET

We hope to see you there!
REGISTER

Missed this event? Check out the recording here!

 

charter school investmentsWalton Family Announces $100 Million for Charter School Investments

Editor’s Note: This post about the Walton Family grants towards charter school investments was originally published here, on June 19, 2018, by the Walton Family Foundation.

More than $100 million in new grants will support diverse and innovative school models and leaders

AUSTIN, Texas – Today, the Walton Family Foundation announced efforts to build and expand on two decades of school startup grants to fuel the growth of high-quality schools across the country. The strategy, detailed in Rooted in Opportunity: The Walton Family Foundation’s Approach to Starting and Growing High-Quality Schools, includes continued grants to proven organizations, like those that help create successful charter schools, with an expanded focus on innovative school models to meet the learning needs of all children. Foundation grants totaling more than $100 million will allow educators and leaders to launch hundreds of schools in the coming years.
“Thanks to courageous school founders – overwhelmingly teachers who have a vision for what school can be – we know that quality schools that put children on a path to college and career success at scale are possible,” said Walton Family Foundation K-12 Education Director Marc Sternberg. “But the simple truth is that a great school remains out of reach for too many families. So we’ve got to do more – more to support educators with a passion and plan for something better, more for families who look to schools as a pathway to opportunity. And in order to build on two decades of work, we need partners old and new in philanthropy and positions of civic leadership who share a vision for the day when all children have access to a school that is right for them.”

Areas of continued and new support are:

Starting and scaling more proven high-quality public charter schools.
Building Excellent Schools: Identify, recruit and train leaders to launch high-quality public charter schools across the country.
KIPP: Grants that support all of KIPP’s strategic priorities including growth, academics, talent and the KIPP Through College program.
Supporting district and private schools that are embracing accountability and autonomy.
Indianapolis Public Schools: Expansion of school-based autonomy and principal trainings.
Partnership Schools: To bring a proven turnaround model to struggling Catholic schools.
Implementing diverse pedagogical approaches.
Big Picture Learning: Open 15 new public schools focused on real-world learning through internships and other activities.
Wildflower: Support for opening new, teacher-led Montessori schools in this network of district, private and forthcoming micro-charter schools across the country.
Increasing early-stage support for leaders of color
Teaching Excellence: Train and support at least 620 educators, 70 percent of whom will identify as people of color, to teach across 15 charter organizations and school districts.
Camelback Ventures: Recruit, train and support leaders and entrepreneurs as they start schools or education-focused ventures across the country.
Navigating the student transition from secondary to post-secondary college and career
The Match Foundation: Grow the college-support program Duet, which provides flexible and affordable degree programs and start-to-finish college coaching.
YouthForce NOLA: Help hundreds of New Orleans students secure internships and earn industry-recognized credentials, putting them on a path to high-wage jobs.
Growing schools that are serving special student populations well
CHIME Institute: Grow the network of fully-inclusive schools where students with and without special needs outperform state averages.
Collegiate Academies: Expand Opportunities Academy, a rigorous full-day program that helps students with moderate to significant disabilities reach their highest potential.
Starting more schools that serve students of diverse backgrounds
Bricolage Academy: Support to help the New Orleans school grow to meet the needs of local families. Currently, six times as many students seek enrollment at Bricolage than the school has capacity to serve.
Diverse Charter Schools Coalition: Study, source and share best practices of intentionally diverse public charter schools. Work closely with a select number of future school leaders to incubate and launch new schools.
Early stage support for entrepreneurs
Reframe Labs: Recruit and support diverse leaders as they design and open innovative public schools in Los Angeles.
4.0 Schools: Recruit and support early stage entrepreneurs developing transformative schools, learning spaces and technology tools.
“Quality public schools are the bedrock of thriving communities and a strong democratic society. The investments that the Walton Family Foundation is making in innovation, accountability for serving students well, and diversity in American public education are heartening because of the difference they will make in the lives of students and families across the country,” said former U.S. Secretary of Education and CEO and President of The Education Trust John B. King, Jr. “More students, particularly those from low-income backgrounds and students of color, will be able to receive rich learning opportunities, successfully transition from P-12 into college and careers, and attend intentionally diverse public schools — with diverse, effective teachers and school leaders. I’m looking forward to the ways in which these important efforts will advance excellence and equity in public education.”
Some of the most impactful grants that span multiple focus areas include:

Charter School Growth Fund

Charter School Growth Fund invests in talented education entrepreneurs who are building networks of great charter schools. To date, CSGF has funded networks that operate more than 870 schools that serve over 370,000 students. Walton’s most recent support will help CSGF identify, develop and train school leaders of color with proven educational track records who have a high potential for success in starting and scaling high-performing charter management organizations.

NewSchools Venture Fund

NewSchools Venture Fund is a venture philanthropy that raises contributions from donors and uses them to find, fund and support teams of educators, and entrepreneurs who are reimagining public education and opening high-quality, innovative schools. New support from the Walton Family Foundation will allow NewSchools to support early-stage ventures that will increase the proportion of Black and Latino leaders in Prek-12 education, as well as incubate and support the launch of more than 30 schools.

Valor Collegiate Academies

Valor Collegiate Academies is a network of high-performing, intentionally diverse public charter schools in Nashville, TN. This support will allow Valor to codify its successful model that blends academic rigor and social-emotional learning and share best practices with schools in Nashville and across the nation.
“Every child deserves access to a great school, which is why it’s important to see a strong commitment to accountability,” said former U.S. Secretary of Education and Managing Partner at Emerson Collective Arne Duncan. “To continue our progress as a country, we need to aim higher for all children and all schools.”
“It requires a collective effort to have a transformative effect on the lives of students and teachers across our great nation,” said former U.S. Secretary of Education and University of North Carolina System President Margaret Spellings. “I applaud the Walton Family Foundation for undertaking this optimistic endeavor, and I am inspired to see their willingness to address issues in education through a varied and holistic approach.”
“As former Houston Superintendent and US Secretary of Education, I saw firsthand the power and importance of new school startup support provided by the Walton Family Foundation,” said former U.S. Secretary of Education Rod Paige. “These resources allowed thousands of passionate educators and other community members to open new schools that today prove what is possible in public education and how to change for the better the lives of children, families and communities across the nation.”
The Walton Family Foundation has supported the creation of more than 2,200 charter, district and private schools with $424 million in grants since 1997. These schools now serve about 840,000 children nationwide.

About the Walton Family Foundation

The Walton Family Foundation is, at its core, a family-led foundation. The children and grandchildren of our founders, Sam and Helen Walton, lead the foundation and create access to opportunity for people and communities. We work in three areas: improving K-12 education, protecting rivers and oceans and the communities they support, and investing in our home region of Northwest Arkansas and the Arkansas-Mississippi Delta. In 2016, the foundation awarded more than $454 million in grants in support of these initiatives. To learn more, visit waltonfamilyfoundation.org and follow us on Facebook and Twitter.

Since the company’s inception in 2007, Charter School Capital has been committed to the success of charter schools. We provide growth capital and facilities financing to charter schools nationwide. Our depth of experience working with charter school leaders and our knowledge of how to address charter school financial and operational needs have allowed us to provide over $1.6 billion in support of 600 charter schools that educate 800,000 students across the country. For more information on how we can support your charter school, contact us. We’d love to work with you!

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Charter School FinancingCharter School Financing: Myths vs. Facts

From funding your growth, managing deferrals, to investment in facilities, get ahead of the game knowing these five charter school financing myths & facts!
charter school financing
Tweet: MYTH: Charter schools should use their reserves to finance growth instead of looking for outside financing options. FACT: Using outside financing to facilitate growth can make a charter more financially secure in the long run and pay for continued growth without depleting cash reserves.
MYTH: Charter schools should use their reserves to finance growth instead of looking for outside financing options.
FACT: Using outside financing to facilitate growth can make a charter more financially secure in the long run and pay for continued growth without depleting cash reserves.

charter school financing
 
Tweet: MYTH: Growth capital should only be used in the case of state funding delays or deferrals or as a last resort. FACT: Growth capital is incredibly flexible and can be used for operational growth, program enhancements, technology upgrades, school expansion, etc. MYTH: Growth capital should only be used in the case of state funding delays or deferrals or as a last resort.
FACT: Growth capital is incredibly flexible and can be used for operational growth, program enhancements, technology upgrades, school expansion, etc.


Tweet: MYTH: Running a charter school is not like running a business. FACT: A charter school is a business and making smart, informed business decisions will benefit your school’s viability, financial health and overall growth. MYTH: Running a charter school is not like running a business.
FACT: A charter school is a business and making smart, informed business decisions will benefit your school’s viability, financial health and overall growth.


Tweet: MYTH: Bonds are the best way to fund a facility. FACT: Only 12% of charter schools have accessed bond financing. The process of securing a bond is often time-consuming and can incur hidden fees from audits, trustees and rating agencies.MYTH: Bonds are the best way to fund a facility.
FACT: Only 12% of charter schools have accessed bond financing. The process of securing a bond is often time-consuming and can incur hidden fees from audits, trustees and rating agencies.
Source: LISC, Charter School Bond Issuance, 2015

Charter School Financing
Tweet: MYTH: Charter schools should own their facilities. FACT: You’re in the business of educating students, not owning and managing real estate. There are many other financing options that will give you control and security over your facility.MYTH: Charter schools should own their facilities.
FACT: You’re in the business of educating students, not owning and managing real estate. There are many other financing options that will give you control and security over your facility.

 
If you’d like to download the PDF version of this infographic, click here.

 
Charter School Budgeting
Charter School Budgeting Best Practices: Don’t Just Survive–Thrive!
Since the opening of Charter School Capital 10 years ago, we’ve reviewed thousands of charter school budgets. Year after year, we see common mistakes many charter schools make when budgeting for their academic year. Hear from charter school finance experts as they give you a breakdown of budgeting best practices to help you have a financially successful academic year. Don’t just survive — thrive!

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school choice
Editor’s Note: With the anniversary of our nation’s independence next week, I thought that addressing the idea of freedom, and more specifically freedom of choice in education was a timely topic. We understand the flexibility in the educational curriculum that public charter schools offer needs to be balanced with accountability. But there has been much debate over the effect that public charter schools have on traditional public schools. This article takes a closer look at the benefits of school choice. It also shows that no evidence or study exists supporting the argument that public charter schools harm traditional public schools. But rather, evidence has been shown to the contrary: the existence of public charters has often improved traditional public school performance in those communities.
We think it’s vital to keep tabs on the pulse of all things related to charter schools, including informational resources,  and how to support charter school growth. We hope you find this—and any other article we curate—both interesting and valuable. Please read on to learn more.

*This op-ed article on the benefits of school choice was originally posted here on February 28, 20118 by the Desert News and written by Teresa Mull (tmull@heartland.org), a research fellow in education policy at The Heartland Institute.

School Choice Doesn’t Destroy Traditional Public Schools; It Makes Them Better

The go-to mantra of many traditional government school advocates is that education-choice programs destroy neighborhood public schools. Their argument is flawed for a couple of reasons. The first is it shouldn’t matter if traditional public schools go the way of the dodo if children, despite public schools’ demise, are receiving a better education. And then there is the fact that their argument is simply not true.
The presence of education-choice options doesn’t “destroy” public education, but it does make existing government schools step up their game, as Sarah A. Cordes wrote in a recent EdNext study titled “ Charters and the Common Good.”
She wrote, “I find that students in district schools do better when charters open nearby: Students in these schools earn higher scores on reading and math tests and are less likely to repeat a grade. The closer the schools, the larger the effect: Co-location increases test scores by 0.08 standard deviations in math and 0.06 in reading.”
The effects are modest, as Cordes noted, but what’s equally important in the school-choice debate is that charters have “no significant negative effects on student performance at district schools nearby,” and “it may be beneficial (and certainly not harmful) to allow for further expansion in NYC.”
Cordes concluded that her findings “show that communities can expand charter schools to meet growing demand without putting district schools at risk of instability or failure. Far from an existential threat to their district-school neighbors, public charter schools can benefit not only their own students but also those in other programs down the street — or hallway.”
Cordes’ findings are a great boon to the education-choice debate. The more policymakers, and constituents who try to persuade them, are armed with evidence showing school choice works, the more likely it is good policy will come into being, right? To quote Ernest Hemingway, “Isn’t it pretty to think so?”
The reality is the free-market system of school choice has always had research on its side. EdChoice.org reported, for instance, “Thirty-one empirical studies (including all methods) have examined private school choice’s impact on academic outcomes in public schools. Within that body of research, 29 studies find that choice improved the performance of nearby public schools. One study finds no significant effects. To date, no empirical study has found that school choice harms students in public schools.”
What’s more, “The research shows that students in school-choice programs attend more integrated schools than their public school counterparts,” EdChoice reported.
There goes the false “School choice only benefits high-income, white families” narrative public school proponents have been peddling for decades. After all, how could a system that forces students to attend the school that corresponds with their ZIP code do anything but segregate by income level? The U.S. Government Accountability Office reported in 2016 that segregation in America’s public schools has actually increased in recent years.
Education choice is good for society. That’s not news to those of us who have been paying attention to the school-choice debate in recent years, and it’s no surprise that the educational elite, who remain committed to their plan to control education for everyone in America, would propagate myths about education choice to maintain their power, prestige and hefty incomes. But studies like Cordes’ are nevertheless vital for growing the school-choice movement.
The more school choice we have, the more evidence there will be supporting its value to society, and pretty soon, we’ll have so much overwhelming proof that even teachers unions and the politicians they control won’t be able to ignore it any longer.

Charter School Capital is committed to the success of charter schools and has solely focused on funding charter schools since the company’s inception in 2007. Our depth of experience working with charter school leaders and our knowledge of how to address charter school financial and operational needs have allowed us to provide over $1.6 billion in support of 600 charter schools that educate 800,000 students across the country. For more information on how we can support your charter school, contact us!

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Budget Best Practices for Charter Schools
Did you miss our live session at the National Charter Schools Conference; Budget Best Practices for Charter Schools? Not to worry! We wanted to make sure to share the highlights from this session right here on the Charter School Capital blog. We were honored to have two charter school finance experts whose depth of experience brought so much value to this presentation.
Budget Best Practices for Charter SchoolsSpencer Styles, President & CEO, Charter Impact

Budget Best Practices for Charter SchoolsMatt Percin, Manager of Financial Analysis and Risk, Charter School Capital

Since the opening of Charter School Capital 10 years ago, we’ve reviewed thousands of charter school budgets. Year after year, we see common mistakes many charter schools make when budgeting for their academic year. So, we’re sharing some budgeting best practices to help you have a financially successful academic year—whether your school is growing student enrollment, expanding facilities, or implementing new educational programs. Don’t just survive – thrive!

Below is an outline of our presentation, but scroll to the bottom to download the handy datasheet and you’ll also find a link to the video of the live presentation.

BUDGET BEST PRACTICES FOR CHARTER SCHOOLS

BUDGET PLANNING FOR STARTUP SCHOOLS

  1. Start with petition budget
  2. Pay close attention to your budget and then map out your priorities for the year
  3. Have a plan and show how costs frame the budget to show how parts make up the whole
  4. Build a budget that includes everything on your wishlist, then prioritize (with your stakeholders)
  5. Plan for surprises by having a budget surplus to cover unexpected costs
  6. Lay the foundation for your annual budget, but plan for regular updates along the way

BUDGET PLANNING FOR GROWTH/MATURE SCHOOLS

  1. Start with a baseline budget based on the previous year
  2. Pay attention to how enrollment projections directly affect revenue
  3. Actively manage your cash flow: financing, receivables, payables, etc.
  4. Understand your accounts payable and vendor relationships
  5. Strategically partner with external service providers and keep them in the loop

CASH FLOW PLANNING

  • What attendance metric drives your revenue?
  • What revenue is monthly, quarterly, or more variable?
  • What happened in prior years with regards to the timing of payments?
  • What costs are fixed monthly and which vary?
  • Communicate with your vendors to plan your accounts payable according to your budget ebbs and flows
  • Financing: Note timing of inflow from your financer and outflow timing for payments
  • Receivables: Map out the timing of state payments and how that affects your cash flow

REVENUE FACTORS TO CONSIDER

  1. Note the correlations of free and reduced-price lunch to your need for fundraising
  2. Track and understand your fundraising families and need for per-student fundraising goals
  3. Understand your restricted grants: how it was intended to be spent, programs reliant on the grant, etc.
  4. Have a plan for the sustainability of institutional fundraising and the programs supported by it

EXPENDITURE TRENDS

  1. Salary scale changes: your area’s unemployment rate, demand for teachers, increasing salaries, etc.
  2. Retirement benefits: Compare a defined contribution plan verus a defined benefit plan
  3. Do you need new textbooks or to renew or change your school’s technology to stay current?
  4. Be mindful of facility cost increases (interest rates, exemption laws, etc.) Plan on how to fund any needed updates or additions

BUDGET SAFEGUARDS

  • Review salary scale changes with the future in mind
  • Consider non-financial perks for your employees: recognition, flexibility, career path and professional opportunities, etc.
  • Have an equipment/technology plan to budget for upgrading or replacing your tech infrastructure
  • Facilities: Plan new construction, your maximum enrollment, and set a facilities reserve fund
  • Have an annual Board of Directors discussion on your school’s long-term initiatives, with a focus on your mission
  • Set target fund balance and target cash balance

 

To watch the video of the live presentation, you can find it on our Facebook page.
To download the printable one-page PDF datasheet, click here.
We hope that this has been helpful and valuable information! We’d love to read your comments and suggestions, so please add them in below.

Charter School Capital is committed to the success of charter schools and has solely focused on funding charter schools since the company’s inception in 2007. Our depth of experience working with charter school leaders and our knowledge of how to address charter school financial and operational needs have allowed us to provide over $1.6 billion in support of 600 charter schools that educate 800,000 students across the country. For more information on how we can support your charter school, contact us!

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The Top Five Financial Mistakes Charter Schools Make: And How to Avoid Them

Did you miss our live session at the National Charter Schools Conference; The Top Five Financial Mistakes Charter Schools Make: And How to Avoid Them? Not to worry! We wanted to make sure to share the highlights from this session right here on the Charter School Capital blog. We were honored to have an outstanding panel of charter school experts whose depth of experience brought so much value to this presentation.

Tricia Blum Head of Business Consulting, Charter School Capital

Margie Montgomery Founder, Desert Star Academy

Sharon Thompson, Chairman of the Board, Wayne Academy

Michael LaRoche Founder/Executive Director, SALTech

 

The Five Mistakes

The panelists began by outlining the top five mistakes:
1. Not Recognizing Your Schools is a Businesses
2. Being Unprepared for the Unexpected
3. Underestimating the Importance of Finances
4. Losing Sight of Your Mission
5. Not Maintaining Strong Relationships

How to Avoid the Top Five Financial Mistakes Charter Schools Make

Here’s a bit more detail on each mistake and the action items you can take to avoid them:

MISTAKE #1: Not recognizing that your school is a business

ACTION STEPS
1. Be the superintendent (not a principal)

  • Not just curriculum and teachers
  • Its endless hard work
  • You will be challenged in ways you never thought possible

2. Know your customer

  • All your stakeholders are customers:
    • Parents
    • Students
    • Community
    • Authorizer
    • Staff

3. Be the boss—the buck stops with you (literally)

  • Everything impacts your financials (especially mistakes)
  • You are responsible for it all
  • Find a mentor

SOLUTION: REMEMBER, YOUR SCHOOL IS A BUSINESS

MISTAKE #2: Being Unprepared for the Unexpected

ACTION STEPS
1. Beware the lawsuit and bad actors
2. Keep a strong, updated wait list

  • Sometimes your enrollment stream dries up or decreases substantially
    • Military bases/large employers, new schools, bad PR

3. Facilities have tripped up more than one great charter schools

  • Landlords aren’t always your friend: Know and understand your lease and the numbers behind them
  • Start looking for larger or better facilities now

4. Beware the tenacity of angry employees and parents

  • Create and maintain good public perception
    • Marketing/PR

SOLUTION: PREPARE FOR THE UNEXPECTED

MISTAKE #3: Underestimating the Importance of Finances

ACTION STEPS
1. Make a plan, work the plan:

  • Budget forecast
    • Don’t underbudget
    • Don’t overspend
      *When in doubt do without
  • Cash flow
  • Budget to actuals
  • Have a contingency plan

2. Beware the claw-back

  • Forecast enrollment realistically
    • Nobody will correct you but they will take your money

3. Hire a charter school financial expert

  • Internally & externally

SOLUTION: REMEMBER, SUCCESS REQUIRES MONEY

MISTAKE #4: Losing Sight of Your Mission

ACTION STEPS
1. Know your end game—its’ your mission and vision

  • Tie all financials and operations back to your goal or consciously make new goals (redo mission/vision)

2. FAB (be Ferocious About your Boundaries)

  • Said differently, Trust but verify
    • Experts

3. Enrollment, enrollment, enrollment

SOLUTION: KEEP YOUR EYE ON THE PRIZE: YOUR MISSION

MISTAKE #5: Not Maintaining Strong Relationships

ACTION STEPS
1. Authorizers: Aren’t always your friend

  • A “fine” relationship with your Authorizer suggests no relationship with your Authorizer
    • Calendar regular contact with staff, ED/superintendent, Charter Board
    • Toot your own horn
    • Show up to Authorizer events

2. Your Board of Directors: know your governance

  • You report to them–cultivate them
  • Lean on them for good and bad—they should be involved not just aware
  • Organized and agenda-d monthly public meetings

3. Experts: find them, pay them-keep the good ones

  • Consultants, thought leaders, business partners

SOLUTION: HAVE FRIENDS IN ALL THE RIGHT PLACES

To watch the video of the live presentation, you can find it on our Facebook page.
To download a printable PDF datasheet, click here.
We hope that this has been helpful and valuable information! We’d love to read your comments and suggestions, so please add them in below.

Charter School Capital is committed to the success of charter schools and has solely focused on funding charter schools since the company’s inception in 2007. Our depth of experience working with charter school leaders and our knowledge of how to address charter school financial and operational needs have allowed us to provide over $1.6 billion in support of 600 charter schools that educate 800,000 students across the country. For more information on how we can support your charter school, contact us!

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charter school budgetCHARTER EDtalk: Charter School Budget Best Practices

Check out this CHARTER EDtalk for tips and tricks on charter school budget best practices! Janet Johnson sits down with Matt Percin, both from Charter School Capital, to learn about the importance of being flexible and adaptable as a startup school and the increased budget-planning power you have as a more mature school. You’ll also get key insights on vendor management as you work through budget ebbs and flows. See the short video below.

Read the complete transcript here:
Janet Johnson (JJ): Welcome everyone to our next CHARTER EDtalk with Matt Percin, who is the manager of Charter School Capital’s financial analysis and risk. Can you tell me a little bit about what you do?
Matt Percin (MP): Sure. Simply put, what our team is responsible for is mainly understanding how much funding our clients could need and then trying to actually map out a plan of what they need or what we can provide so it’s a cohesive relationship for us. And then the other thing we’re doing is actually valuing what we’re going to buy. So we’re valuing the future revenue streams. We’re looking at purchasing for the school for financing as well as for real estate business. Figuring out what schools can afford … helping schools map that out.
JJ: So, you do actually work with the schools a little bit. Oh, that’s cool. Because I have a feeling a lot of schools don’t have people with your experience on staff. Is that correct?
MP: Sometimes it’s nice if they have some kind of back-office provider (BOP) who has someone we can dialogue with. But sometimes we take a more active approach with our schools that don’t [have a BOP]. So, it’s helpful.
JJ: There’s a couple of different types of schools that we work with here: startup schools, and then a little bit more mature – or growth-oriented – schools. Can you tell me a little bit about the differences between the approach for financial support for each?
MP: For sure. I would say probably the three things that we could emphasize for a startup school versus a growth or mature school is flexibility, variability, and then the power and efficiency you have as a school.
JJ: So can you tell me a little bit about what is flexibility versus variability?
MP: So, if we say variability for a startup school, you’re actually a lot more variable in the sense of you don’t have any history yet, so you have no backlog to figure out how last year worked out. You have to be a lot more adaptive to what happens … because you might say, hey, we think on our petition budget, we’re going to open up with 100 kids. But you may open up with 125 or 75. So then figuring out how to quickly adapt to your budget and adjust accordingly, you just have to be a lot more reactive as a startup school.
JJ: So all the planning in the world, you still have to kind of be nimble and you help with that.
MP: Exactly. You know, if you’re a growing school or a school that’s been mature or been around for five years, three years, somewhere in that realm, you have a baseline and you knew how things happened last year and you have less variability in your student count because you’ve established yourself in the market. You have, the students that already come to your school. And they may continue on in your school so you have a lot more understanding of what your baseline is going to look like for future years.
JJ: So you’re more predictable.
MP: Yes. So, then the other, the other thing I talked about was the flexibility. So the flexibility or sometimes you can think of it as the power you have as a school, if we can use that word.
JJ: I like that word!
MP: So, if you’re a startup school, once again, you just have to be more flexible. You aren’t flexible yourself yet, [but] you just have to become more flexible. So, that could mean adjustments up front, changes down the line. It’s really all about reaction like we said before.
JJ: So are we managing expenses more than we’re managing revenues at this point?
MP: It’s definitely both, but I think everything starts with your student count, which is what leads to your revenue, and then you have to adjust expenses accordingly.
JJ: So it’s as important to keep happy students and as it is to bring them in.
MP: Exactly. Then, obviously, if you’re mature or growing school, the power you have is that you have established relationships with your vendors: the people that supply your technology, or your books or your landlord. You have a relationship with them. If you have any challenging months or times of the year, you have the ability to use that relationship and utilize it for your advantage and maybe say, “Hey, in the first three months of the year, my revenue and my cash is tight, can I push out maybe some expenses to later in the year?” Then, you have that type of power upfront for your vendor management.
JJ: Love that idea of power around vendor management. Do you find that vendors oftentimes will respond to that?
MP: Definitely. I think the key is always communication upfront. It’s like anything in life, right? If you give someone the forewarning with enough time, the relationship is a lot easier to maintain and establish.
JJ: So, flexibility when you start, then you become more dependable and your variable expenses are more predictable, and you establish yourself as a reliable partner to others, and you have more power as you grow up. And the key to all that is your student revenue should exceed your expenses.
MP: Exactly. Awesome. Very well said.
JJ: Thank you. I know cashflow planning is a big consideration for a lot of schools. Can you talk about how that affects your budget? You talked a little bit about it before, but can you dig into a little bit about what should charter leaders look out for when they’re planning their cash flow?
MP: I think the key is that sometimes cashflow planning gets overlooked. Everyone knows that for any business—which a charter school is—you have to have a budget, right? But sometimes people forget to look at things from the actual “ins and outs” perspective, which is what a cash flow is. A cash flow is essentially your budget, but it’s broken out usually looking 12 months ahead. So, you can figure out how everything looks monthly or sometimes even weekly. So then you can start to figure out really the questions you want to ask yourself are … What are my challenging times of the year? Because if you figure out where you’re challenging times the years are, then you can use everything we just spoke about – your vendor management and all your accounts payable management – and you can forecast that upfront. And then it starts the conversations with your vendors. And if you have to look for financing, you know when you might need it. So basically, thecash floww is helpful because it gets you looking and becoming more proactive in the future.
JJ: And tools for managing cashflow or or resources for managing cash flow. Those are people like your back office provider?
MP: Yes.
JJ: But what if you don’t have one? Does that mean Charter School Capital helps you, if you’re working with us?
MP: Yes, we do that all the time. Even if they do have a back office provider, sometimes it’s a relationship we work in tandem with the back office. It’s usually a partnership is how we always work on that type of thing.
JJ: Yeah, because I don’t know that a lot of schools have [one]. Maybe they do, but it’s been our experience, I think, that they don’t have as much visibility as they should into cashflow.
MP: I agree. Sometimes it just gets overlooked, but the fact is that it’s a very important tool for many reasons. It’s important to look at.
JJ: Good. So if a charter leader is looking for new financial support for a school, what should they be looking at? Who should they be looking at? What are the steps that they should be taking?
MP: That’s a good question. I think what you want to start with, is figuring out how much you need. Right? So, in order to do that, I would say you probably need the same document we just referred to, which is the cashflow. Because then you can start to figure out if there’s some type of gap in your cash flow or you don’t have enough actual cash in the system to pay something important, rent or some big bill that’s coming up. Then you actually know. So, I would say you first want to establish how much you need and then with that, when you need it.
JJ: And, do we help with that? Is Charter school capital help with that? Even if you’re not doing business with us yet?
MP: We do. I think schools generally know if they think they’re going to have problems with cash, but they might not be as honed in on exactly how much they need and when—and then in the future, how whatever financing they do get is going to affect them. So, we try and help show them the path. Always, in advance. We like to look at things, pretty far in advance – six months, 12 months – to help schools map out where they can go, and what they want to achieve.
JJ: Any, any last recommendations or advice for charter leaders from where you sit?
MP: That’s a good question. I would say if it kind of relates to what we just spoke about, but it can be applied to anything. I think the biggest baseline driver for everything is the student count. But it’s very easy to know student count and how much you get paid for the year. But it’s more important to understand—when those students come on board—when does the actual receipt of the revenue come for those students. Because, oftentimes (and all across the United States where there are charters) there’s some lag from when new students come versus when the actual payment for them comes. It could be three months, it could be nine months. So, then you have to figure out as you add new students, how you pay all the onboarding costs for new teachers and new books for those students. So, if you have that mapped out, it sets everything else off much better.
JJ: Matt, thank you so much. We really appreciate your help today. And for more information on charter school budget planning and tips, Charter School Capital has a whole bunch of resources on the website at www.charterschoolp.wpengine.com/resources . So, come visit us and find out more. And if you have a real question about budgets, Matt might help you out.

Charter School Capital is committed to the success of charter schools and has solely focused on funding charter schools since the company’s inception in 2007. Our depth of experience working with charter school leaders and our knowledge of how to address charter school financial and operational needs have allowed us to provide over $1.6 billion in support of 600 charter schools that educate 800,000 students across the country. For more information on how we can support your charter school, contact us!

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Charter School FinancesFind Out How to Avoid the Top Five Financial Mistakes Charter Schools Make

Our upcoming session at the National Charter Schools Conference is going to answer one really important question, “How do we avoid the top financial mistakes that charter schools make?” We are so honored to have an outstanding panel of charter school experts join us to share insights from their years of charter school experience.

Tricia Blum Head of Business Consulting, Charter School Capital

Margie Montgomery Founder, Desert Star Academy

Sharon Thompson, Chairman of the Board, Wayne Academy

Michael LaRoche Founder/Executive Director, SALTech

 

So, what are the five mistakes?

1. Not Recognizing Your Schools is a Businesses
2. Being Unprepared for the Unexpected
3. Underestimating the Importance of Finances
4. Losing Sight of Your Mission
5. Not Maintaining Strong Relationships

We chatted briefly with two of our panelists, Michael LaRoche, the Founder and Executive Director at SALTech and Margie Montgomery, Founder of Desert Star Academy, asked them a few questions in advance of their participation on our panel.

Q: Can you briefly describe your history with Charter School Capital (CSC) and why you are excited to participate with Charter School Capital at the National Conference?
Michael LaRoche: CSC was always there to support SALTech’s mission for facility financing from day one. We developed relationships with the CSC staff in early 2013, during our separation from the Education Management Company. SALTech experienced significant cash flow problems soon after construction which would have closed most schools. CSC stood by SALTech during the good times and challenging encounters along the way. I am very excited to share our journey and the support CSC provided to enable success.
Margie Montgomery: As the founder of Desert Star Academy, I have been a client of CSC for four years. First, with working capital. CSC provided funding for Desert Star Academy to open the charter to purchase furniture and the initial curriculum. After two years, CSC’s Facility team purchased land from Desert Star to build an 11,000 square foot building that housed our new middle school
I am extremely excited to participate with CSC at the conference because this company provides resources and opportunities for charter schools to grow and expand. They also provide support to each of the schools to improve and maintain financial stability. It is truly an honor and privilege to be a speaker with them at the conference.

Q: What do you hope people take away from our session “Top Five Financial Mistakes Charter Schools Make . . . And How to Avoid Them”?
Michael LaRoche:

1. Not Recognizing Charter Schools are Businesses
Ensure the school leadership and the Board have a shared vision for the school and are on the same page. They need to collaborate and agree on legal, financial, marketing, staffing, budgeting, construction and growth opportunities that matter to the school. They must also have a contingency plan in place for when things do not go as expected. Moreover, they must seek innovative ways to outperform the competition continuously.
2. Poor Enrollment Forecasting
Work with a financial expert to carefully understand how expected enrollments affects the entire school operations. Nothing is 100% guaranteed and the perfect time is always now. You must take the financial walk!
3. Sales & Marketing
Most charter schools do not have the resources to hire a sales or marketing team to support their enrollments efforts. You are the chief salesperson for your school. Therefore, you must scaffold your sales and marketing thinking to your staff quickly. Help your staff to understand that everyone is a salesperson for the school. Help your staff to look for trends and opportunities in the education marketplace.
4. Build Strong Relationships
You can not do it alone. Innovation is not the leader or Board responsibility. Make the connection with businesses and organizations that share your vision and mission that will add relevance to your school. Keep your parents and students informed of your goals, they are your first line of support and sometimes your only line of support.
5. Ferocious Around the Boundry
The school leadership and the Board must plan for and respond quickly to any threats made against the school, which includes the following: The school district, state, parents, students, staff, other organizations and social media to mention a few.
Margie Montgomery:
1. It is not enough to open a charter school as a building principal you MUST have superintendent experience.
Running a charter school is a business. If you are the lone person at the top running the school and directing your board you must have business experience. As the school leader, you are managing cash flow every week and making financial decisions daily. Be prepared.
2. Plan for the unexpected.
Talk to many charter leaders about the first year of business in respect to the hills and valleys. Understand the mishaps that can occur and be prepared to handle them from a financial standpoint to staff and curriculum issues. Over plan in every aspect from sound policies to financial planning, as once the doors open you are putting out fires.
3. Have financial reserves from day one.
Plan to have cash reserves from day one and budget for a set amount to go to the reserves every month. This will get you through the unexpected and have a build up for growth. Your incomes come in monthly and growth expenses occur in the few months before school starts. Reach out to charter school capital during your planning phases to partner with them for financial stability. Once funded, immediately set up a cash reserve account.

Q: What are you most looking forward to at the conference?
Michael LaRoche: SALTech Charter High School has a great story of resilience, belief and an impressive academic and financial track record in helping and supporting at-risk youths for over 15 years. I was privileged to have a front-row seat to bear witness to SALTech journey so that others can benefit.
Margie Montgomery: I am looking forward to seeing the team and sharing my experiences with charter holders outside of my local and state area. Running a charter school is such an exciting, yet challenging opportunity for everyone involved and if I can assist and encourage others to be successful I will have achieved another professional goal.

And, this is just a sneak peek at the wealth of knowledge our panelists will be sharing! We want to sincerely thank Micheal, Margie, and our other esteemed panelists for their partnership, leadership, and willingness to share their experiences to help support other charter leaders.

W e’ll be streaming this session on Facebook Live from the National Charter School Conference on Monday, June 18th at 2 pm CT or (12 pm PT). Don’t miss it!

And check back on our blog late on June 18th to download a handy one-page PDF of the five mistakes.

Charter School Capital is committed to the success of charter schools and has solely focused on funding charter schools since the company’s inception in 2007. Our depth of experience working with charter school leaders and our knowledge of how to address charter school financial and operational needs have allowed us to provide over $1.6 billion in support of 600 charter schools that educate 800,000 students across the country. For more information on how we can support your charter school, contact us!

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National Charter School ConferenceJOIN US AT THE 2018 NATIONAL CHARTER SCHOOLS CONFERENCE

We are excited for you to join us in Austin, Texas, for the National Charter Schools Conference (NCSC18), June 17-20! Did you know they’re expecting nearly 4,500 attendees? There will also be over 260 exhibitors on site who provide the resources and support that help charter schools succeed.
You’ll find all of the vendors in the Exhibit Hall. Please be sure to stop by and visit with us at the Charter School Capital booth (#1307).

Charter School ConferenceShare the charter school love to receive a special prize! It’s as easy as 1-2-3:

  1. Grab the We Love Charter Schools fan (find it in your registration bag)
  2. Take a photo with it using the hashtag #welovecharterschools
  3. Then share on Twitter for a chance to win a special prize!

Also in the Exhibit Hall, you’ll find a Charter Talks stage, including TED Talk-style presentations from school leaders and advocacy thought-leaders, live music, and book chats and signings. They will also be hosting a coffee bar and providing boxed lunches to keep us all fully charged throughout these busy days.
Ready to network? Come to the Happy Hour on Sunday night, 6-8 p.m.! We’ll be there and are looking forward to meeting other fellow charter movement enthusiasts!

We’re honored to be presenting two brand new sessions at this year’s National Charter Schools Conference:


Top Five Financial Mistakes Charter Schools Make … And How to Avoid Them

Monday, June 18 | 2:00 p.m. – 3:15 p.m. | Room 12 A/B

Whether your school is growing student enrollment, expanding facilities, or implementing new educational programs, we can all agree that a school’s financial wellness is one of the most important aspects of running a successful charter organization. Without sound financial wellness, schools close, regardless of how successful they were at educating students. Get armed with the right knowledge, techniques, and materials to ensure financial success and learn how to avoid the pitfalls that may cause trouble.

Charter School ConferenceCharter School Budgeting Best Practices: Don’t Just Survive—Thrive!

Tuesday, June 19 | 10:00 a.m. – 11:00 a.m. | Room 12 A/B

Since the opening of Charter School Capital 10 years ago, we’ve reviewed thousands of charter school budgets. Year after year, we see common mistakes many charter schools make when budgeting for their academic year. Hear from charter school finance experts as they give you a breakdown of budgeting best practices to help you have a financially successful academic year. Don’t just survive — thrive!

To learn more about the sessions, set up a 1:1 time to meet with us,  or add them to your calendar, click here. And don’t worry, if you can’t be there in person, we’ll be live streaming the sessions on our Facebook page. Be sure to follow us so you don’t miss a thing!

Get the most out of your time at a conference with these handy tips

Before the conference:

  • Build relationships! If you know of people you want to reconnect with or get to know better who will be attending—clients, vendors, friends-of-friends—reach out a few weeks before the conference to set up a time to meet for coffee or a meal while you’re at the event.
  • Plan your sessions – Try to attend a range of topics, skill-building sessions, and social events, but make sure to allow for downtime. It’s all about making the most of your time there.
  • Know which conference social activities you plan on attending ahead of time so you can set up some great networking opportunities!

At the conference:

  • Connect with the speakers of all the sessions you attend.
  • Use Google docs to collaborate and share session notes with your team. If time is short, list the “immediate actions” you gathered from your sessions–even just the three key takeaways and any notes on follow-ups you’d like to do on the topic or with the speakers.
  • Keep a list of vendors you spoke to on the exhibit floor for solutions to future needs. And, so they don’t get lost at the bottom of your swag bag, bring an empty business card case to keep those cards handy for later!

After the conference:

  • Within a week of returning from the event, send a personal follow-up to everyone you met to let them know you enjoyed meeting them
  • If you met anyone you specifically want to do business or build a relationship with, set up a phone call or face-to-face meeting.
  • Not everyone is able to attend conferences in person. Be generous with your new information, inspiration, and contacts you made at the conference by sharing them with your fellow co-workers, colleagues, and friends!

WE HOPE TO SEE YOU THERE!