In the News
Fund for charter schools gets $10 million grant
The money can help charters in the region buy or upgrade buildings, which can be hard to finance.
Martha Woodall
Philadelphia Inquirer, September 2, 2005
Buying or renting buildings is the biggest challenge facing charter schools, but a new $10 million federal grant to the Reinvestment Fund in Philadelphia could help finance 25 charter facilities across the Mid-Atlantic region, affecting 15,000 students.
Charter schools from throughout the Philadelphia region have already expressed interest in tapping into the fund, officials said.
Don Hinkle-Brown, president of the fund's lending initiatives, said yesterday that the $10 million grant would leverage a total of $50 million that can be used to provide loans, loan guarantees and other services to help charter schools expand, buy or upgrade buildings.
The other $40 million will come from private sources, including banks and others that invested in the fund's Charter School Capital Access Program.
Although the Reinvestment Fund has received federal money for its charter-lending program in the past, Hinkle-Brown said, the $10 million grant from the U.S. Department of Education was the largest to date. It was one of five charter-financing grants the department awarded across the country.
"Not only does it provide another source of capital... but it serves as a stimulus to all the other lenders," said Timothy Daniels, executive director of the Pennsylvania Coalition of Charter Schools.
Charter schools have difficulty obtaining financing from banks. They are considered risky investments because the schools are new and their operating charters are rarely longer than five years.
Traditional public schools can issue bonds for capital programs and are eligible to receive government reimbursement for construction costs. Although charter schools are publicly funded, they are not eligible for such help with building costs. They also receive less taxpayer money per student than traditional public schools.
Since the Reinvestment Fund began its charter-financing program several years ago, it has provided loans and other support to help 27 charter schools buy property and build and renovate structures. It also has provided financing for charter schools to upgrade leased facilities. Hinkle-Brown said banks were leery of making loans to charter schools to upgrade rented facilities.
Most of the 27 schools are in Philadelphia, though the fund covers the Mid-Atlantic region.
Sara Vernon Sterman, director of the fund's charter-school lending program, said that while the fund has worked mostly with Philadelphia charters, it has begun working with charters in Baltimore, Pittsburgh and New Jersey. She noted that the fund has provided some working capital for the DUE Season Charter School in Camden.
Hinkle-Brown said that, as news of the federal grant has spread, the fund has received inquiries from charter schools in smaller districts, including Allentown and Harrisburg, and from charter schools in New Jersey.
Brien Gardiner, who heads the Philadelphia Academy Charter School, said his school would not exist without the Reinvestment Fund. It provided funds that allowed the charter to upgrade its rented facilities and helped provide financing so the charter could buy a property and upgrade it for its growing high school program.
"We were able to get in, and now we have 25-year financing," he said. "Without them, we could not have done it."
Based in Center City, the Reinvestment Fund is a nonprofit corporation that finances neighborhood and economic development projects in the Mid-Atlantic region.