The Secret Sauce: Ingredients Needed to Help Secure Charter School Financing
Working on the Education Finance Team, I often hear the reoccurring question “Where do we start?” This question always stops me in my tracks because every charter schools’ story begins differently. Many people will answer “it depends,” but I believe there is a simpler answer than that.
Yes, student enrollment, sound financial management, and a rigorous academic program responsive to the community’s needs are all important elements to a successful start-up school; however, when I speak with schools for the first time, I am listening to see if they have the “secret sauce”.
There are often undiscussed considerations we at Raza Development Fund have identified as being critical to securing financing for the first time; I present that mix of ingredients with hopes that it will benefit you and the students you serve.
Ingredient No. 1 – Have Integrity
“In looking for people to hire, look for three qualities: integrity, intelligence and energy. And if they do not have the first, the other two will kill you.” – Warren Buffett
This first ingredient is completely unmeasurable, yet so critical in our line of work. I look for individuals that have integrity and are fully transparent on the front end. Rarely do things go according to plan or turn out in a way which we would like. In the infancy stages of an emerging relationship, it is critical to disclose the good, bad, and ugly.
If there is bad and ugly, have a coherent plan that provides evidence of a roadmap to a successful future. Ultimately, I want to see that you are prepared for challenges and have a well-thought-out backup plan. Transparency and forthrightness will make it easier for financial institutions to craft a solution beneficial to all parties. Do not commence your business relationship by deceiving or concealing information as it typically comes to light when you least expect it.
I want to know that we can help each other and work together in the good and bad days – that is what sets us apart at RDF. Working with individuals that have integrity and transparency is vital.
Ingredient No. 2 – Hire Wisely
Surround yourself with a team that adds value and experience that complements your own skillset.
As an Investment Professional, I want to know what experience you have either starting a school, a business, or other leadership roles. If you have not started anything from the ground up, then it is essential to surround yourself with people that have.
Creating and receiving your charter approval is the easy part, and from my experience, starting a school from the ground up is not for the weak. Time zooms by when you know what you are doing. Imagine the inefficiencies when you have never done this before and how much extra time will be needed to figure things out. Therefore, hire wisely on the front end so there is a greater chance of sustained success. Future generations of children’s futures depend on it.
Ingredient No. 3 – Good Governance
Have a well-rounded, engaged and committed school board. Not a “yes” board!
Prior to COVID, school boards flew relatively under the radar as to their level of importance to a school. The now ever apparent truth is that they are one of the most important functions of a successful school. The strategy should not be to merely recruit friends or past colleagues, but rather seek out individuals who are committed to the school’s mission, diverse in skillset and experience, and are willing to push the school to a status of excellence.
In October 2020, we met with a school leader in New Mexico and asked her how she got “lucky” with such a great school board. She responded, “I found them all on LinkedIn and reached out to them.” She cold-called people with the experience she was looking for and asked if they would be interested in volunteering to be a school board member for a school that was not even created yet. Simple, but brilliant and courageous. I encourage you to do the same!
Ingredient No. 4 – Channel Your Grit
If you have not read the book “Grit: The Power of Passion and Perseverance” by Angela Duckworth, please go grab a copy or listen to it on Audible (this is not paid advertisement). In the book she talks about why some people succeed and others fail.
It is not all about being a genius or working hard. Of course, that helps. It is about having perseverance, passion, resilience, consistency and ensuring you are continuously learning. We do understand that challenges will arise during the maturity cycle of a school. We must ask ourselves if the leaders will get burnt out by year 3 or retire with the school in 20 to 30 years. Ultimately, we want school leaders to be in it for the long haul. Channel your grit and keep on going.
The Secret Sauce
So, what makes you different? Besides a rigorous academic program and financial solvency; the secret sauce is the mixtures of the ingredients listed above. My advice is to make good choices in who you surround yourself with, so you can positively impact students. It is all about leadership. Ask yourself if you have the right team, a well-rounded governance, and if everyone has integrity and grit.
If you have that, then you have the secret sauce to be successful. If you do not, it is never too late to make the changes needed to be successful.