The Charter Schools Development Corporation (CSDC) is a 501(c)(3) nonprofit corporation and Community Development Financial Institution (CDFI). CSDC provides a critical service for new and expanding charter schools which, unlike traditional schools, have neither a ready source of capital for facilities, nor the taxing or bonding authority to address capital funding requirements. Because public charter schools’ per-pupil funding is often inequitable compared to that of traditional public schools (about 75-80% on average when compared to traditional schools nationwide), virtually all charter schools must use operational funding – money which otherwise would go towards educational purposes and classroom teaching and learning – to cover capital budget shortfalls. CSDC helps charter schools with the twin challenge of finding and financing facilities and closing the funding gap so that they can keep their focus on their educational mission and student achievement gains.
CSDC specializes in working with newly formed and early stage charter schools in their first few years of operation, with a priority of schools in low-income communities and/or communities with a significant number of underperforming district schools. CSDC is focused on helping to “stand up” and stabilize those schools so that they become independently creditworthy, without the need for CSDC’s further assistance, by virtue of their successful operating history and demonstrated ability to meet their enrollment goals and produce good academic and financial results.
Over its decade-plus history, CSDC has provided or leveraged millions in capital financing and facilities for charter schools in 25 states and the District of Columbia. It has steadily expanded its program offerings and financial services as the charter school movement has grown from a single school in Minnesota over 20 years ago to millions of students attending charter schools in 43 states and the District of Columbia today, with 600,000 families on charter school waiting lists nationwide.
- CSDC, through its Building Block Fund, has provided over $48 million in credit enhancement for over 130 charter school organizations in 25 states and the District of Columbia serving over 42,500 students (78% low income). CSDC’s credit enhancements take the form of partial, limited guarantees or additional collateral for charter school facility lease and loan payment obligations.
- CSDC has developed over 4.4 million square feet of educational facilities through its nonprofit real estate development services (Turnkey Development Program), whereby CSDC acquires, develops and builds-to-suit properties for lease with option-to-purchase to its client-tenant schools, and Fee Developer Program. CSDC has developed over $150 million in real estate projects, several of which have been sold to the charter school optionees under this “lease-to-own” program.
- CSDC has originated over $11 million in facilities and working capital loans through its direct lending programs. CSDC’s lending initiatives have leveraged $30 million in debt financing and lease commitments.
- Another CSDC subsidiary, CSDC New Markets Fund, LLC, received $40 million in New Markets Tax Credits and fully sourced (suballocated) those federal income tax credits for a like-amount of equity and debt capital used to finance permanent facilities for five charter schools in four states and D.C.
CSDC’s business model has expanded in direct response to the growth of the charter school movement and its emerging financial sector. CSDC has a long record of success in facilitating the flow of capital to low-income and early stage schools and continues to advance the understanding of charter school financing within the private sector and encourage private lenders and investors to enter the charter school market.