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2007 Annual Report

I. Board of Directors Update

The initial Board of Directors of Chicago International Charter School came together with a shared vision and passion for educating the traditionally underserved members of society; inner-city, urban youth, from kindergarten through twelfth grade. These individuals formed an organization dedicated to bringing change to the traditionally staid education community. They built a unique organization that has relied on a business model focusing on core competencies (see sidebar) and economies of scale with the confidence to allow talented education partners to employ their strengths to achieve the organizational goal: college preparation for all students, from kindergarten to twelfth grade. The education partners assume the day-to-day operations of the “business,” educating more than 6,700 students across 11 neighborhood campuses.

In addition to the distinctive business model, much of the Board’s functioning is patterned after the corporate world, specifically the governing board approach. The

Chicago International Board is not a traditional non-profit “working” board. This Board is focused on the end, with the education partners concerned with the means. This model gives the Board members opportunities to evaluate the organization’s goals and, when those goals are met, to focus on the next initiative—all with a focus on results in the classroom.

In order to live this focus, board members must know the outcomes and how (and whether) the organization is achieving its goals. The Chicago International Board adopted a rigorous assessment system over the last two years, which not only informs the Board of Student Achievement (and campus achievement in aggregate), but

also informs teachers of students’ strengths and weaknesses, leading to the goal of differentiated instruction for the students of Chicago International.

The Board has realized that as we grow as an organization, the Board becomes further and further removed from the front lines. In order to keep members aware and in tune with the individual campuses, the Board launched the CICS Teacher, Parent and Student Advisory Boards during the 2006 – 2007 school year. The purposes of these boards are to provide advice and feedback to the Board regarding the experiences of CICS children, teachers and families. Through the insights of students, teachers, and parents, we hope to improve the school program delivered at Chicago International so that the educa-tional program best meets the needs of each campus community. Each CICS Campus has one member on each advisory board. The campus director chooses the teacher representatives. The Parent Organization

Annual Repor t Contents

I. Board of Directors Update II. Fiscal Year 2008 Financial ProjectionsIII. Funder Prof ileIV. About the BondsV. Fiscal Year 2007 Funding PartnersVI. Student Performance Update

The financial philosophy of Chicago International Charter School (CICS) is to operate schools using the per pupil and entitlement funds provided through Chicago Public Schools, the Illinois State Board of Education, and the U.S. Department of Education. The fiscal policy of Chicago International is to operate a balanced budget. CICS generates small cash surpluses each year to create a cash reserve fund to be used for emergencies. In addition to the revenues from the public school system, Chicago International solicits donations for special projects and to finance organizational growth. Our philosophy presents a unique challenge because charter schools in Chicago receive less funding than traditional public schools.

of each campus chooses the parent reps, and the students generally come from the leadership of the student government.

Of the nine members of the Board, four remain from the original board: David Chizewer, Kate Gottfred, Craig Henderson and Gerald Jenkins. The remaining five have joined the board over the last four years (see sidebar list of Board Members and their professions). This collection of talented, committed people continues to keep student achievement at the forefront of Chicago International.

Executive Committee:Craig W. Henderson (Board President) is the founder and president of C. W. Henderson & Associates, Inc., an investment counseling firm that specializes in tax-exempt municipal securities and manages assets totaling approximately $1.8 billion.

David J. Chizewer (Vice President) is a partner in Goldberg, Kohn, Bell, Black, Rosenbloom, and Mortiz’s Litigation Group and is the chair of the firm’s Education Industry Practice.

Laura Thonn (Treasurer) is a manager at PricewaterhouseCoopers LLP in their business assurance practice. She is a licensed certified public accountant and also has a master’s degree in Social Service Administration.

Thomas J. Nieman (Secretary) is the owner and president of Nieman Inc., a privately held company that specializes in developing curriculum materials for educational publishers.

Board Members at large:John Gates is chairman and CEO of PortaeCo LLC, a private investment firm. Prior to forming PortaeCo, he co-founded CenterPoint Properties Trust.

Dr. Catherine Gottfred is president of Gottfred Speech Associates, Ltd., a firm that provides language therapy to children and adults across Chicago.

Thomas Hayden is the chief marketing officer for the Medill School of Journalism at Northwestern University and also serves on the faculty of Medill.

Gerald L. Jenkins is a principal at Goldberg, Kohn, Bell, Black, Rosenbloom, and Mortiz, where he specializes in tax planning and corporate creation.

John Lock is the CEO and president of Charter School Growth Fund, a firm specializing in value-added grants and loans for the development and expansion of high-quality charter management and support organizations.

The hierarchy of core competencies of Chicago International:Board of Directors: Oversight, governance, vision, and focus

Leadership Team: Finance, compliance reporting, relationship building, fund raising, facility acquisition, and management, and student performance evaluation

Education Management Partners: Training and managing personnel, implementing curriculum, involving parents and community, and managing school culture and climate

Teachers: Teaching, differentiating instruction, and caring

II. Fiscal Year 2008 Financial Projections

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To support Mayor Daley’s effort to create 100 new schools by 2010, Chicago’s civic and business communities launched the Renaissance Schools Fund (RSF), which raises funds for the new schools and provides strategic guidance and accountability for the process. Phyllis Lockett is CEO of the Renaissance Schools Fund, which has in the last two-and-a-half years raised $41 million to launch 38 new public schools through Renaissance 2010. RSF has contributed more than $1.3 million to support four Chicago International campuses, namely: Chicago International Avalon, Chicago International Wrightwood, Chicago International Ralph Ellison, and Chicago International Irving Park.

What is your vision for the Renaissance 2010 initiative?For children in the city’s most underserved communities to compete effectively in the global economy, we must do a better job of providing access to high-quality school options.

The city’s business and civic communities invested in Renaissance 2010 because they saw it as an opportunity to create innovative

Chicago public schools on a significant enough scale that would give parents real options and that would infuse competition into the system. With competition, our belief is the system will inspire innovation and improvement.

The opportunity for choice has already unleashed strong parent demand for high-quality schools. At the same time, the pipeline of high-quality schools is growing as some of the early school leaders, such as Chicago International, are developing into high-performing networks and new educational entrepreneurs are emerging.

How does RSF assess the new schools it funds?Our work is driven by the need to create greater equity in our public education system and to offer families high-quality public school options. To do this, RSF seeks to replicate high-performing school models.

We look for high-performing models wherever they are found—they may be from the private sector, among charter schools, or among the best of the traditional public system. The common denominator among these models is

that students are learning.

In evaluating schools, we look for schools that offer:

1) Choice: We support schools that are open to students from across the city. We believe schools should compete and parents should have the opportunity to “vote with their feet,” creating a demand for high-performing schools.

2) Innovation: We support schools that offer innovative practices, such as providing more professional development to teachers, a longer school day, or longer school year.

3) Capacity: We support schools with entrepreneurial school leaders, sound financial and operational strategies, and consistent governance structure.

How have Chicago’s business and civic com-munities embraced the school choice model? Chicago’s civic and business communities have been long-term partners in the city’s school reform efforts, paving the way for the reform movement of the 1980s and in just the last two years, they have contributed more than $41 million to create new high-performing

III. Funder Prof ile: Interview with Phyllis Lockett, CEO, The Renaissance Schools Fund

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schools through Renaissance 2010. Our donors believe in the need to offer Chicago families high-quality public school options.

How would you assess your impact to date?As of October 2007, 55 new schools have been created, and these schools offer innovative practices and outperform, on average, neighbor-hood schools. (See “RSF Facts.”) They have an oversubscription rate of 140 percent, which demonstrates that there is real demand for high-quality schools.

We are working to create a pipeline for high performing school models, and based on the results so far—both the supply of high-quality schools and the demand for them—we are on the right track.

RSF Facts

More time with innovative instruction…

* RSF-funded elementary schools spend an average of 32 percent more time than CPS elementary schools on core subjects (317 minutes each day versus 240 minutes each day).

* RSF-funded high schools spend an average of 22 percent more time on core subjects than CPS high schools (342 minutes each day versus 280 minutes each day).

…leads to stronger student outcomes.

* In the 2005 cohort of RSF elementary schools, the percentage of students proficient on the math portion of the ISAT increased 12 percent over the previous year (versus five percent in CPS schools).

* On average, RSF schools out-performed neighborhood comparison schools by three percent in reading and math, with some schools outperforming their neighbors by as much as 23 percent.

IV. About the Bonds

2007 witnessed a refinancing of Chicago International Charter School’s (CICS) original $16,050,000 bond issue from 2002 with a new $49,475,000 long-term tax-exempt bond to support facility improvements and expansion. The transaction was completed in early February and it received an investment grade rating from Standard & Poor’s Corporation.

Among 4,100 charter schools nationally, approximately 300 have been able to qualify for bond financing due to investors’ limited appetite for debt from this new sector of public building bonds. While S&P has rated more bonds than the two other national rating services, fewer than 50 charter schools have received an investment grade rating. To meet this high credit standard, a charter school must meet criteria in many areas, including:

1. the legal framework under which it operates

2. the relationship with the charter’s authorizer

3. financial practices and professional management practices

4. Board oversight of operations and adherence to its mission

5. educational results, and

6. community support for its school(s).

While other features of a charter school bond are examined, such as the bond structure, budgeting and audit practices, and fund balances, Chicago International’s bond differed from other charter schools’ bonds in that part of the security was a mortgage on the various owned properties and revenues from leased properties without mortgages. Most charter school bonds have been for a single school, not a city-wide network of 11 campuses under one charter and governance structure.

Chicago International’s bonding team included D.A. Davidson as Underwriter; William Blair as Financial Advisor; Mayer Brown as Bond Counsel; Kutak Rock as Disclosure Counsel and Goldberg Kohn as Foundation Counsel. The bonds were issued through the Illinois Finance Authority.

Russ Caldwell, Senior Vice President of D.A. Davidson remarked that Chicago International’s 2007 bonds were unique in several respects: chiefly that institutional investors recognized CICS’s multiple campuses have greater financial strength and financial flexibility than a single charter school entity. “This, coupled with a strong operating history, caused the BBB rated bonds to be accepted by the market place similar to ‘A’ rated securities,” Caldwell said. “The 30-year fixed rate bonds at 4.99 percent were purchased by institutional investors, many of whom were local to Chicago. Chicago International’s credit has enjoyed the best investor reception of any single school or system of charter schools to date in the national market place.

Thomas Lanctot, Financial Advisor, added, “Chicago International’s bonds have established a framework for other charters to follow.” Consistent, positive financial performance underlying high educational results is the best path to the capital markets for charter schools, according to Lanctot.

CICS Wrightwood Halloween Party:

Panjanea Rivers, Deasire Brooks,

Phyllis Lockett, Joy Jamerson,

Ashley Ward and Maya Holcomb

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CICS Wrightwood Halloween Party:

Panjanea Rivers, Deasire Brooks,

Phyllis Lockett, Joy Jamerson,

Ashley Ward and Maya Holcomb

Chicago International Charter School (CICS) has been continuously striving to meet the needs of today’s student, and has acknowl-edged the importance of using data in making educational decisions. By evaluating student performance data, we identify students’ needs and address their needs using instructional best practices in the classroom. As we move forward as a data-driven school, we are able to see the growth our students are making.

CICS Elementary School Performance: ISAT and NWEA (Figure 1)In our elementary schools, 75 percent of our students are meeting and/or exceed-ing state standards on the 2007 Illinois Standards Achievement Test (ISAT) in math and 59 percent in reading. Consequently all campuses are meeting and/or exceeding state math standards, compared to 63 percent of Chicago area charter schools and 59 percent of Chicago public schools. Three of eight Chicago International campuses are exceeding both the average Chicago area charter school and Chicago public school percentages in reading. Our students achieve growth year-to-year as well: 50 percent of Chicago International students made expected gains in reading on the ISAT and 55 percent made gains in math.* (Figure 1)

Although Chicago International is moving our students towards the standard goal of proficiency by state standards, the school has also raised the bar for internal standards. Using a tool called Measures of Academic Progress (MAPs) from the Northwest Evaluation Assessment’s (NWEA), Chicago International tracks not only students’ proficiency, but also their growth from year-to-year and within each school year. Administered three times a year, the NWEA tracks student progress throughout the school year. It allows administrators and teachers to access test results for their students within days of testing completion and

make instructional changes in the classroom that best meet students’ needs.

Chicago International has been successful in moving students from the “below” to the “meets” category on the ISAT. Using NWEA-inspired growth and proficiency targets, which are aligned with the Illinois state standards, Chicago International has increased the overall percentage of students meeting the projected growth targets on the NWEA reading and math scale. Fall 2007 data suggests 54 percent have made adequate NWEA projected growth in reading and 64 percent of students will meet projected proficiency in reading. Fall 2007 NWEA math scores suggest 50 percent of students have made their projected growth targets and 75 percent will meet their projected proficiency targets in math. Compared to the previous year, school-wide Chicago International is increasing the percentage of students who are meeting projected growth targets. (Figures 2 and 3)

CICS High School Performance: ACTChicago International students have an average of 19 on the ACT compared the to average Chicago public school ACT score of 17. Longwood ACT composite scores ranged from 11–24, with an average of 17. Northtown ACT composite scores ranged from 11–35, with an average score of 20.

Moving ForwardAs Chicago International Charter School continues to progress, focus will remain on the growth of our students. We expect to see growth for students at all academic levels, and these data ensure that we are meeting all students’ academic needs across our K-12 system.

*Based on CPS calculations.

V. Fiscal Year 2007 Funding Partners

On behalf of the 6,700 students, their families and the 500 educators who constitute Chicago International, the Board of Directors wish to extend their deepest gratitude to these organizations and individuals for their continued support of our mission. These gifts of cash and in-kind goods and services truly make a difference in the lives of thousands of Chicago’s youth and adults on a daily basis.

Cash Contributions:Bill & Melinda Gates Foundation

Charter School Growth Fund

Circle of Service Foundation

John Gates, Jr.

Judd Enterprises

Kraft Foods

Pritzker Traubert Family Foundation

Renaissance Schools Fund

Walton Family Foundation

In-kind contributions:AMC Mortgage Services

Bally’s Hyde Park

Goldberg, Kohn, Bell, Black, Rosenbloom, and Moritz

KaBOOM!

The Home Depot

U.S. Tennis Association

VI. Student Performance Update

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Figure 2.

Figure 3.

Figure 1.