Two non-profit lending funds launched by the Building Equity Initiative have made more than $40 million in new loans for public charter school facilities. The low-cost loans, distributed through the Charter Fund and Facilities Investment Fund, have to date allowed four schools across the country to find, secure and renovate permanent facilities. As a result of these loans, these four schools will save hundreds of thousands of dollars over the next 30 years and serve more than 3,500 students collectively.
“More schools now have access to permanent, quality facilities and resources once spent on facilities can now go back to classrooms, to teachers and back where our resources should be – with students,” said Alice Walton.
The Charter Fund (CIF) is a national non-profit social impact fund created to help high-performing charter schools across the country maximize resources for students. The CIF provides long-term, fixed-rate loans—similar to a home mortgage—for up to 100 percent loan-to-value financing, with no reserve fund requirements and millions of dollars saved over the life of a loan. The CIF is the first pooled fund of its kind for public charter schools, utilizing philanthropy and excellent credit standards to develop a product with immense value for schools and fund investors alike.
Recent projects include:
"CIF's successful launch affirmed our founding hypothesis: schools are eager to spend less on facilities and more on children,” said CIF Founder and CEO Anand Kesavan. “Our first two loans to Soulsville and Village Tech saved the schools over $5 million—dollars right back into high-performing classrooms. Long-term, low-cost, high impact. That’s our mission. We look forward to helping dozens more schools save in the coming years. It's been rewarding and humbling to work alongside the Walton Family Foundation, high-performing school leaders and their school communities as we grow scalable, efficient capital markets to work toward educational equity."
Created in collaboration with Bank of America Merrill Lynch and managed by Civic Builders, the Facilities Investment Fund (FIF) is a groundbreaking $100 million loan fund that is committed to improving facilities financing for high-performing charter schools and networks across the country. The program provides financing for new school construction or renovations to existing buildings with loans up to $20 million for up to 90 percent loan-to-value financing. The interest rate is fixed for the duration of the five-year loan period, and the loans feature 25-year amortization, no prepayment penalty, and up to 24 months of interest-only during construction.
Recent projects include:
"For 17 years, Civic Builders has been committed to our mission of ensuring that real estate will never be a barrier to an excellent education,” said Civic Builders CEO David Umansky. “The Facilities Investment Fund represents a critical step toward improving access to affordable facilities financing for high-performing charter schools nationwide. We are proud to partner with the Walton Family Foundation and Bank of America Merrill Lynch to bring this innovative product to the facilities lending landscape."
Accessing facilities that adequately serve the needs of their public school students and educators remains a significant barrier for public charter schools across the country. The CIF and FIF aim to incentivize new and additional capital to charter school facility projects at cost-effective interest rates. The Building Equity Initiative marks the first time philanthropists have tried to catalyze system-wide improvements in how high-performing public charter schools access facilities financing. Through the Building Equity Initiative, there is now a large network of real estate experts, lenders, financiers, technical assistance providers and additional resources available to help public charter schools finance and secure facilities.
About the Walton Family Foundation
The Walton Family Foundation is, at its core, a family-led foundation. The children and grandchildren of our founders, Sam and Helen Walton, lead the foundation and create access to opportunity for people and communities. We work in three areas: improving K-12 education, protecting rivers and oceans and the communities they support, and investing in our home region of Northwest Arkansas and the Arkansas-Mississippi Delta. In 2017, the foundation awarded more than $535 million in grants in support of these initiatives. To learn more, visit waltonfamilyfoundation.org and follow us on Facebook and Twitter.