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Fundraising challenge

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[Editor’s note: This is the first of two stories on charter school funding.]

By Ret Boney

Significant financial challenges nag most of the young schools in the eight-year-old charter-school movement, which enrolled almost 22,000 North Carolina students last year and has grown to 97 schools, charter-school advocates say.

In 1996, North Carolina lawmakers passed the Charter Schools Act authorizing the development of up to 100 charter schools throughout the state, and requiring they be organized as private nonprofits governed by their own boards.

With two new schools beginning their planning phases this fall, the total number of charter school will grow to 99.

Charter schools, which operate with public funding and state oversight, are tuition-free and must accept all students who apply, within the limits of their charters.

Educating students in some or all grades from kindergarten through high school, charter schools in North Carolina range from 26 students to more than 800, according to the state Department of Public Instruction.

Like public schools, charters receive a per-student sum of money, roughly equal to the amount given to public schools in their districts, but they have wider flexibility in how those funds are used, such as in purchasing supplies and textbooks and in hiring and paying teachers.

But while counties and the state pay for public school buildings through property taxes and bonds, charters receive no public money for facilities.

“They’ve got to house the schools using the funds from the per-pupil allocation,” says Mike Fedewa, superintendent of schools for the Catholic Diocese of Raleigh and chair of the Charter School Advisory Committee, a group created by the State Board of Education to advise it.

“So when you take money from that source, it limits what you can do instructionally,” he says. “That’s one of the biggest challenges that charter schools face.”

As a result, many charter schools are forced to operate out of church basements, storefronts or modular units, and frequently lack gymnasiums and cafeterias, and several have closed because of financial hardship, Fedewa says.

To pay for facilities, charters also have had to short-change their educational programs, says Otho Tucker, former director of the state Office of Charter Schools and now a senior vice president for Mosaica Education, an educational services provider.

“It’s a double whammy, because you have to dig into your education dollars,” he says.

Schools also adapt to funding shortages by having comparatively flat administrative structures, says Tucker, with school heads wearing multiple hats and boards helping with day-to-day school operations much more than is typical at traditional public schools.

Given their nonprofit status, charters have the authority, and even the responsibility, to raise funds to cover facility costs, says Jack Moyer, the new state director of the Office of Charter Schools and former principal of the Academy of Moore County.

However, unlike many other nonprofits, including private schools, charters generally do not have development offices or development professionals on staff.

And board members, while they generally share a passion and vision for options in public school education, typically are not trained or experienced in fundraising, advocates say.

So while many charter schools supplement their public funding with grant money, private support or small fundraising events, few have the capacity or skills to raise significant capital.

“I don’t believe charter schools in our state have really learned to do those things yet,” says Moyer. “They have a dream for the school, but they don’t look beyond what you need to have to allow that school to function and to become self-fulfilling.”

Moyer says he hopes to address that issue during his tenure with the state’s Office of Charter Schools.

Fedewa, head of the Charter School Advisory Committee, says charter schools need to start “taking on a private school mentality” in the quest for additional resources, learning how to build endowments and organize and execute capital campaigns.

“There needs to be some serious training of those boards,” he says.  “People need to have the skill set to manage the small business appropriately, because that’s what these are. For the movement to grow, we have to address this.”

Part two: Strategies charter schools use to fund facility costs.

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