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Charter fundraising varies widely

This school year, Chicago's 22 charter schools plan to raise some $12 million in private contributions. But their dependence on fundraising varies widely, from about 4 percent of the budget at the Chicago International schools to 40 percent at Young Women's Leadership Charter School.
From the May, 2006 issue of Catalyst-Chicago Private Fundraising

This school year, Chicago's 22 charter schools plan to raise some $12 million in private contributions. But their dependence on fundraising varies widely, from about 4 percent of the budget at the Chicago International schools to 40 percent at Young Women's Leadership Charter School.

The monetary differences reflect differences in philosophy and program as much as fundraising muscle.

For example, Chicago International, which raised about $730 per student in private money, believes that greater fundraising cannot be sustained over the long haul. Young Women's, which raised about $3,600 per student, believes that spending more money is necessary to prepare its students for success beyond high school.

"In any given year, we believe that we should not be dependent on fundraising for more than 5 percent of our operating costs," says Elizabeth Delaney-Purvis, executive director of the Chicago Charter School Foundation, which oversees the 10 campuses of Chicago International.

If each campus counted on philanthropy for even 15 to 20 percent of its revenue, she says, they would have to raise $10 million a year. They might be able to do that for the first four to five years, she says, but not in perpetuity. This year, the campuses raised $4 million.

Purvis adds that with 10 campuses, Chicago International is able to achieve some economies of scale—in contracts, for example—that are unavailable to other charters.

Betty Shabazz Charter, which operates three campuses, also has resisted big-time fundraising. A parents' council at one campus raises $40,000 a year to pay for the sports program. Community members provide in-kind services and goods—one campus recently received 50 refurbished computers. To keep payroll down, the school looks for teachers with multiple skills. For example, one teacher also serves as the technology coordinator.

But now that the cost of health insurance, utilities, salaries and the like is outpacing its public dollars, Shabazz too is asking for bigger bucks. Actor Danny Glover was the headliner at a recent fundraiser that brought in $40,000.

However, Anthony Daniels-Halisi, the charter's director of business operations, stresses that the charter doesn't want to become so dependent on philanthropy that it would have to cut core programs, should those extra dollars not come in. He sets a goal of no more than 5 to 10 percent of the budget

Sustainability a concern

At the other end of the spectrum, Joan Hall, board president at Young Women's Leadership, says extra money makes a difference. "Our school recently ranked No. 1 in college admissions and graduation rates of all non-selective high schools," she notes. "We spend $10,000 per pupil, and we believe those rankings indicate that's what it costs to properly educate a high school student in Chicago."

Chicago Public Schools provides charter high schools with $6,075 per pupil in base funding plus additional funds depending on the size of the school and the student population. Illinois Network of Charter Schools estimates it adds up to about 82 percent of what traditional high schools get on average.

Hall concedes that "sustainability is a legitimate concern" but says that board members "are completely determined" to raise the money." They personally contributed 25 percent to 30 percent of the $1.2 million they have raised for each of the past four years, she says.

Perspectives Charter also is engaged in major fundraising. It is conducting an "Open Doors" campaign that has already raised $3.6 million to pick up some of the cost of building a new school and will help pay for planning future growth (potentially adding three more campuses by 2007).

Dianne Campbell, director of external relations, says the charter hopes to house its new campuses in CPS buildings, which is cheaper.

"Our long-term plan is to raise $200,000 annually per school, which will be about 4 percent of the budget," she says.

The Darwinian Effect

Clive Belfield, associate director at the National Center for the Study of Privatization in Education at Columbia University, says that in the long haul, schools cannot rely on fundraising or volunteer help.

"Philanthropists are not in the business of providing education, but of stimulating it," he says, "so it's short-lived."

He argues that the enthusiasm of parents and communities is short-lived as well. "In early years it works, but nothing systemic has been integrated into school," he says.

However, John Ayers, vice president of communications at the National Association of Charter School Authorizers, says Chicago has enough money to meet the charters' needs. "Chicago is an extremely wealthy town, and there's a lot of good will for schools," he says. "And these charters know how to market themselves."

Ayers stresses that it's not "advantaged people providing extra dollars for advantaged kids. They're getting wealthy people and businesses to give extra dollars for poor kids."

Seventy-nine percent of charter students receive a free or reduced-price lunch, a Catalyst analysis shows.

Ayers challenges the charters that aren't fundraising. He says they should be asking: "What are we doing wrong that we aren't getting money? What could we do with 20 percent more revenue?"

However, it is a challenge that not all can meet. The Children's Choir Academy, located in McKinley Park, started in 2001 as a school that integrated music into its academic program. Difficulties raising enough money for its program soon led to the initial board's disintegration.

Geoffrey Stone, president of the Chicago Children's Choir board, which holds the charter for the Choir Academy, estimates that it would take at least an extra $1,000 per child for an adequate choral program, "and a good deal more for a full-scale program."

Chicago Children's Choir is not up for that and is now trying to transfer control of the school to another operator.

Belfield says that this Darwinian effect operates nationwide, with financially weak charters going under.

In Chicago, three of 36 campuses have closed in the last eight years, and at least one of those for financial mismanagement. Beatriz Rendon, executive director of new school support at CPS, says the district's approval process includes a thorough review by the Illinois Facilities Fund, which examines the financial plan, including the fundraising objectives, to ensure that the operators have the "financial capacity and wherewithal."

Fundraising, she elaborates, is encouraged and supported by her office. "We never say you're fundraising too much money!"

Performance-based funding

Belfield and Ayers agree that charter quality is important for fundraising.

Belfield argues that nationally charters have not exceeded the performance of traditional public schools and that contributors are beginning to notice that their dollars aren't going very far.

Ayers, on the other hand, applauds the performance of charters in Chicago, saying that as long as charters "continue to be successful academically, they will continue to raise the money."

Elaine Allensworth, associate director at the Consortium on Chicago School Research, says that while there has been no formal study of the performance of charters compared to regular schools in Chicago, "there are a number of charter schools that look exceptionally good."

Even after controlling for the backgrounds of the students, these schools post impressive graduation rates, test scores and student attendance, she says.

However, even those comfortable with charter fundraising argue that, ultimately, the state needs to increase funding for charter schools.

"We are hopeful that the Illinois legislature will recognize the need to increase funding," says Hall of Young Women's Charter.

To contact Mallika Ahluwalia, call (312) 673-3874 or e-mail mallika@catalyst-chicago.org.

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