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 twenty-year history, CSDC has provided or leveraged millions in capital financing and facilities for charter schools in 26 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 7,000 charter schools in 44 states and the District of Columbia today.
CSDC has provided almost $80 million in federal and philanthropic credit enhancements to support charter school facility projects across all of its programs. Some notable accomplishments are summarized below (as of 12/31/17).
- Provides partial, limited guarantees or additional collateral for charter school lease and loan payment obligations
- Served 84 schools enrolling over 26,000 students in over 2.4 million square feet of space
- Leveraged over $238 million in private sector financing and lease commitments
- Acquires, develops, and builds-to-suit properties for lease with option-to-purchase to tenant schools
- Served 65 schools enrolling over 30,000 students
- Developed over 2.8 million square feet of educational facilities
- Leveraged over $320 million in private sector, senior and subordinated debt financing
- Originated over $30 million in facilities acquisition, renovation and leasehold improvement loans
- Served 37 schools enrolling over 15,000 students in almost 1 million square feet of space
- Leveraged over $56 million in debt financing
- 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 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.