Charter School Financing: How to Secure Funding for Your Charter School

Since the first charter school opened its doors in Minnesota in 1991, the school choice movement has become increasingly popular in the United States. Data from the National Center for Education Statistics offer clear insights:

“Between school years 2004–05 and 2014–15, the percentage of all public schools that were charter schools increased from 4 to 7 percent, and the total number of charter schools increased from 3,400 to 6,750. The percentage of public school students who attended public charter schools increased from 2 to 5 percent between fall 2004 and fall 2014.

“The number of students enrolled in public charter schools increased by 1.8 million students (from 0.9 million to 2.7 million), while the number of students attending traditional public schools decreased by 0.4 million.”

Indeed, more and more families are opting for charter school educations. That means even more work needs to be done to pay for these institutions.

According to the Center for Educational Reform, charter schools spend more money per student than they accept from state governments. While charter schools receive lots of public financing, many institutions need to secure outside funding to cover all operational costs.

With so many more charter schools being built throughout the country, it is increasingly difficult to find the money needed to provide a top-notch education.

Here are four ways you can secure funding for your charter school this year.

1. Gain a Comprehensive Understanding of Charter School Laws

Before you take any other step with your charter school financing, you and those you are working with should familiarize yourselves with the relevant charter school laws. In the U.S, each state must pass a law stating that charter schools are allowed, and, as a result, each state has composed different laws for these institutions.

At present, 44 states, along with the District of Columbia, permit charter schools. Vermont, West Virginia, North Dakota, Nebraska, and Montana do not. (South Dakota only allows them if they primarily serve students from Native American tribes that are federally recognized, and if the state receives a federal grant.)

Unsurprisingly, the laws vary based on location. One of the biggest differences is regarding the contract length a charter school can be granted. In Arizona, for example, state law dictates that a contract for a charter school “is effective for 15 years from the first day of the fiscal year as specified in the charter and may be renewed for successive periods of 20 years.” In New York, however, charter school agreements cannot be longer than five years.

Additionally, most states determine who is allowed to open a charter school; some have caps on the number of charter schools they allow, and some outline who must provide transportation for the students.

Moreover, the states usually specify the students who can receive enrollment preference and the schools that can receive approval preference.

Given how much of your charter school financing and general operations depend on location, it is important to do a lot of research on the laws that impact you.

2. Work with Organizations That Specialize in Charter School Funding

Throughout the United States, many organizations are working hard to help charter schools receive the money they need to operate. Some of these organizations are based in individual states, so as you search for funding, research local nonprofits that have a history of helping causes similar to yours.

Here are five organizations that provide help with charter school financing.

• 1. Opportunity Finance Network: a national group of community development financial institutions, often referred to as CDFIs, that work to stabilize communities.
• 2. Charter School Development Corporation: Another CDFI, the Charter School Development Corporation offers financial assistance to charter schools that serve mostly low-income students in communities that have underperforming public schools.
• 3. Partners for the Common Good: A nonprofit community investment corporation, Partners for the Common Good provided more than $22 million in capital to disenfranchised communities from 2006 to 2012.
• 4. The Reinvestment Fund: An organization that finances charter schools throughout the Mid-Atlantic, The Reinvestment Fund is powered by more than 860 investors. Using a heavily analytical approach, TRF focuses on low-income communities to achieve social change.
• 5. Local Initiatives Support Corp: Also an organization that provides charter school financing to low-income areas, Local Initiatives Support Corp offers loans, grants, and equity across 44 states.

Charter Asset Management offers six types of funding for eligible charter schools:

• Gap Financing
• Operational Cash Flow
• Growth Funding
• Capital Expenditures
• Working Capital

We currently provide funding for qualified charter schools in 17 states, including California, Nevada, Utah, Arizona, Texas, North Carolina, Florida, Louisiana, South Carolina, Idaho, Georgia, New York, Tennessee, Wisconsin, Colorado, Indiana, and Ohio.

3. Apply for Federal Education Grant Funds

• Charter School Program State Education Agency (SEA) Competition: This competition offers charter school financing to those who wish to “plan, design, and implement new charter schools, as well as to disseminate information about them.”
• Charter School Program Non-State Education Agency (Non-SEA) Competition. This competition’s purpose is to “expand opportunities for all students, particularly traditionally underserved students, to attend high-quality charter schools … and meet challenging State academic standards.”
• Replication and Expansion of High-Quality Charter Schools Competition. This competition is for charter management organizations that are trying to “replicate and expand high-quality charter schools that have demonstrated success.”
• National Leadership Activities Grant Competition. This competition is for nonprofits that are attempting to fund projects “of national significance” which can “improve charter school quality and provide money to disseminate information about their projects.”
• Credit Enhancement for Charter School Facilities Competition. The grantees of this competition must allocate the funds to “improve their credit in order to help charter schools use private sector capital to buy, construct, renovate, or lease academic facilities.”
• Per-Pupil Facilities Aid Competition. This competition helps charter schools by providing money to “make payments, on a per-pupil basis, to finance charter school facilities.”

4. Contact One of Our Representatives

At Charter Asset Management, our mission is to provide short-term charter school financing at the lowest cost possible. If your school receives an offer from another financial institution, we can guarantee a lower cost for capital.

Moreover, having worked with more than 250 charter schools, we have a strong record of success. We can ensure that your school enjoys a fast turnaround for funding: typically in less than 24 hours for our current clients and in fewer than 10 days for new clients.

To get in touch with professionals who understand the complicated, ever-changing landscape of charter school governance and financing, contact our team today.