Foundations help secure $93M in bonds for Aspire charter school network expansion in Calif.

Foundations help Aspire charter network expand

SEATTLE — The Gates and Schwab Foundations announced Thursday they will back a California charter school network’s efforts to secure $93 million in tax-exempt bonds to help them expand and serve more than 4,000 new students.

The unique financing arrangement is known as a Program Related Investment.

Both the Bill & Melinda Gates Foundation and the Charles and Helen Schwab Foundation have provided $8 million in unfunded guarantees to Aspire Public Schools to back the charter organization’s bond financing for new school buildings.

The nonprofit charter school network operates 25 schools educating more than 7,600 students in grades K-12 in six California communities, East Palo Alto, Modesto, Oakland, Stockton, Sacramento, and Los Angeles. By 2020, the organization hopes to have more than 60 public schools in its network.

Aspire was founded in 1998 and focuses on communities with a large percentage of low-income and minority students. In state test scores, Aspire schools went up 30 points on average this past year, the charter organization said. California’s growth target for Aspire students is 3 points a year.

Aspire is one of five California-based charter management organizations that worked as a team to win a $60 million grant from the Gates Foundation for a new teacher training initiative.

Allan Golston, president of the U.S. Program at the Gates Foundation, notes that state and local governments do not provide buildings for public charter schools, so expansion was difficult even before the economic situation tightened credit markets.

“Access to facilities financing is a critical barrier for even the highest-performing, most creditworthy charter schools,” Golston said in a statement.

The foundations’ credit support helps Aspire access the bond market at more favorable terms.

Golston said the bond guarantee will deepen the impact of the foundation’s investment in Aspire by lowering the cost of expansion.

NCB Capital Impact, a nonprofit lender to charter schools, will act as a financial intermediary and program facilitator for the Program Related Investment. The Gates Foundation is giving NCB a $959,000 three-year grant and the lender is contributing $1 million in a funded guarantee.