fcpcs growth strategies - august 2014

Copyright © 2014 Charter School Capital, Inc.

Charter School Growth

Strategies

Florida Consortium of Public Charter Schools

August 5, 2014

OUR MISSION

Throughout the U.S., charter schools are providing existing and important

educational opportunities to students. To be successful, charter schools need

two foundational elements in place – financial stability and the freedom to

focus on what they do best – education our kids.

Charter School Capital ensures these happen every day. We take care of

charter schools by providing access to the resources schools need to be stable

and grow.

Charter School Capital

WHO WE ARE

• Began funding charter schools in California in 2007

• More than $0.6 billion of funding to charter schools nationally

• Charter school finance and operations experience

• Significant charter school industry and investor relationships

• Stellar track record with schools and investors - 0% default rate

• Relationships with more than 400 charter schools serving more than 400,000 students

Invested in charter schools

4Copyright © 2014 Charter School Capital, Inc.

WHAT WE DO

• Working and growth capital– Accelerate attendance-based funding

• Facilities financing– Expansion and new development

• Resource development– Matching clients with grant, entitlement and philanthropic funds

• Advisory support – pro bono for clients– Translating financial impact of legislative action – Financial planning, both short and long-term– Evaluating and creating new funding paths

Empower charter schools by providing access to funding


WHAT WE’LL COVER

• Charter school growth stages• Challenges school operators face at each stage• Best practices and takeaways

Agenda

Presentation is available to download atwww.slideshare.net/CharterSchoolCapital


Stages of Growth


STAGES OF GROWTH

# of Students

Start-upSurvival/Establish

GrowthFlexibility/Stability

Sustainable MaturityEfficiency

Time (years)

0 2-3 5-10

100%

Students as a % of mature targets

10-25% 25-90% 90-100%


CHALLENGES

Reasons for charter school closures

42%

24%

19%

6%

5%4%

FinancialMismanagementAcademicAuthorizer ObstaclesFacilitiesOther

Source: The State of Charter Schools,The Center For Education Reform, December 2011


STAGES OF GROWTH

Strategic approach

Start-up Growth Sustainability

Financing

Facilities

Community involvement

Academic accountability

Operational support


STAGES OF GROWTH

Strategic approach


Financing Any liquidity

Facilities In target locale


Awareness


Establish program

Operational support

Outside experts

STAGES OF GROWTH

Strategic approach


Financing Any liquidity Flexibility/scalability

Facilities In target locale Modular


Awareness Fulfill the promise


Establish program Measure program

Operational support

Outside experts Transitional resources


STAGES OF GROWTH

Strategic approach



Cost

Facilities In target locale Modular Curb appeal/cost


Awareness Fulfill the promise Fabric of community


Establish program Measure program Continuous improvement

Operational support


In-house team


STAGES OF GROWTH

Strategic approach



Cost






Operational support


In-house team


STAGES OF GROWTH

• Different structures of working capital– Receivable sale– Term loan– Line of credit

• Facilities financing options– Lease option– Bond– Traditional bank loan

• Regarding costs of funds, all costs are NOT created equal– Evaluate total $ cost rather than % rate– Consider fixed transactional costs and penalties, in addition to annual rate

related to costs

Finance considerations


The Start-up Phase


STAGES OF GROWTH

Start-up

Common MisperceptionsFounding team to “create” best practices

“If you build it, they will come”


STAGES OF GROWTH

Start-up

Marshall speak to this series of slides

The Challenges

Finding good leadership and teachers

Securing resources

Finding suitable facilities

Healthy enrollment

Sustaining high performance as network expands


STAGES OF GROWTH

Start-up

Best Practices

Study and meet with schools doing things well

Don’t be a master of everything. Master a few things and do them really well

Build genuine and robust relationship with teachers, leaders, vendors, and external constituents

Pay close attention to the budget

Pay even closer attention to student progress data

Do not waiver in your belief or mission


The Growth Phase


STAGES OF GROWTH

Growth

Common Misperceptions“After the 3rd year, all will be in place and it’s smooth sailing!”

Performance and accountability requirements will be stagnant

Done with professional development

No need to change routines or systems

We’ll have sufficient funds from operating revenue to support expansion

Facility upgrades will be minimal, if at all


STAGES OF GROWTH

GrowthChallenges

Maintaining high expectations and being flexible

Advancing levels of student performance

Managing growth with limited resources

Upgrading systems to support growth

Retaining quality teachers and leaders

Matching capital to operational needs


STAGES OF GROWTH

Growth

Best PracticesContinuous professional development and leadership training

Build on the culture

Focus on individualized instruction and data analysis

Increase visibility in the movement



The Sustainable Maturity Phase


STAGES OF GROWTH

Sustainable maturity

Common MisperceptionsWith growth, comes distance

Time to cash in

Challenges decrease as you scale


STAGES OF GROWTH


The ChallengesDeveloping and executing a sustainable strategic plan

Identify aspiration – mission, vision, core values, SWOT

Right team to implement strategic vision and plan

Reevaluate financing to match your needs


STAGES OF GROWTH


Best PracticesDefine your objectives clearly and communicate them extensively both internally and externally

Celebrate your successes and analyze your failures

Develop data-driven culture and make sure you retain the passion that got you started

Develop pillars that define what you do

Assess performance regularly and use assessment to improve

Take what you do seriously without taking yourself too seriously


Recap


STAGES OF GROWTH

Recap



Cost






Operational support


In-house team


STAGES OF GROWTH

• Stages in charter school lifecycle present very different challenges

• Strategy and focus needs to vary significantly as you grow

• Leverage experts at every stage to allow you to focus on educating kids

• Financial analysis illuminates positive potential impact of growth and scale

Key takeaways


Stuart Ellis

877.272.1001

[email protected]

SlideShare.net/CharterSchoolCapital