Funding charter school facilities can be a perfectly sound investment in quality education for low-income communities--if lenders and investors scrutinize a school’s track record, says a report by LISC and the National Association of Charter School Authorizers. Too often, funders don’t look at data indicating whether a school might not repay a loan, or even close. Good communication with authorizers is a key to good investment.
The below excerpt is sourced from:
"U.S. charter school investors, lenders, authorizers should talk more - study"
by Megan Davies, WHBL News
U.S. charter school investors, lenders, authorizers should talk more -study
Investors and lenders to charter schools and the authorizers of those schools should communicate better in order to lessen the risk of making a poor investment or facing an unexpected school closure, according to a report released on Thursday.
Of 393 charter school bond offering documents analyzed, only six used evaluation reports from authorizers detailing ongoing monitoring of a school, said the report, by community financing organization the Local Initiatives Support Corporation and the National Association of Charter School Authorizers (NACSA), which represents authorizers and sets standards.
Instead, bond investors and underwriters typically use original charter authorizations which reflect goals rather than actual performance in meeting goals, said the report.
"One thing puzzling is that some lenders are looking at the original charter documents or they may be looking at newspaper articles but not at the summative reports that actually address performance," said Nelson Smith, senior adviser at the NACSA. Continued[+]...