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The A-Rated, Nonprofit Lending Fund Provides Long-Term, Low-Cost Facilities Financing to High-Quality Public Charter Schools. The Issuance Will Allow More Resources to Directly Reach 30,000 Students.
Equitable Facilities Fund (EFF) will issue $100 million in A-rated tax-exempt bonds to further its mission of supporting an equitable, high-quality public education for all students by providing financing to excellent public charter schools to build, grow and renovate facilities.
Through EFF’s Preliminary Official Statement, the nonprofit lender has laid out plans that will support 30,000 public charter school students by providing affordable funds for their schools’ buildings, equipment and other capital projects, thus directing more resources into the classroom and helping students realize academic success and a lifetime of opportunity.
EFF is supported by the Walton Family Foundation’s Building Equity Initiative(BEI), an unprecedented effort to make it easier and more affordable for public charter schools to access equitable, affordable facilities funding.
“This next step for the Building Equity Initiative will help public charter schools more easily and affordably access facilities and free up resources to go where they belong, with teachers and students,” said Walton Family Foundation board member Alice Walton.
Since launching in 2018, EFF has committed more than $158 million in low-interest loans supporting 11 public charter facilities projects across seven states. To date, these loans have saved public charter schools and networks over $15 million and allowed them to better serve more than 30,000 total students.
EFF pools public charter school loans in an innovative manner to provide long-term, fixed-rate loans with terms that public charter schools could not otherwise secure. Adapting a revolving loan fund model that has successfully supported more than $100 billion in clean water projects for three decades, EFF is the first pooled fund of its kind for public charter schools. The fund’s team of finance and public charter school experts have formulated a best-in-class loan underwriting and monitoring system and plan to raise additional capital for a target near-term fund size of $600 million to benefit high-quality public education.
"Every high-quality public school deserves equitable, permanent financing,” said EFF Founder and CEO Anand Kesavan. “This is what we're striving to provide at EFF—with a proven approach that has the potential to positively impact thousands of students. That's the beauty of it. We're combining traditional investment structures and cutting-edge philanthropy and putting it all to work against educational inequity."
Unlike district schools, which typically operate out of buildings acquired and financed from credit founded on a tax base, public charter schools must fund facilities costs from their operating budgets. This can lead to uneven distribution of resources for public school students attending public charter schools, where valuable resources are directed away from classroom instruction in order to pay for the school facility. EFF, by providing credit enhancement and low-cost permanent capital, aims to ensure public charter schools can direct more resources to helping students realize meaningful academic and life outcomes.
“Equitable Facilities Fund has been an incredible partner for us,” said Jeremy Chiappetta, CEO of Blackstone Valley Prep Mayoral Academy (BVP), which received a $16 million loan from the EFF to finance the acquisition of a previously leased high school facility for its 1,959 K-12 students in northeast Rhode Island. The loan will save BVP, one of the highest-performing school networks in Rhode Island, over $60,000 annually throughout its 30-year term.
“As a relatively young and growing organization, our ability to access facilities funding was limited. The EFF team, however, not only provided us with very favorable financing terms, but also provided sage strategic advice and counsel. As a result of this project, we are able to reallocate hundreds of thousands of dollars into classrooms.”