Our Historic Approach to Charter School Facilities
The Walton Family Foundation believes that every child in America should be able to attend a high-quality school that prepares them for a lifetime of opportunity. The foundation has invested more than $1 billion to date to improve all types of schools—traditional district, public charter and private—and to support innovative organizations focused on student learning and better life outcomes, so that all children can live into their full potential regardless of their ZIP code or background.
One of the most significant barriers to the growth of high-quality charter schools is identifying and securing facilities. Because of inequitable access to public spaces and public funding, finding an appropriate facility can take up an inordinate amount of time and resources for charter schools—both of which could be better spent in the classroom. The foundation wants to make this easier for charter schools, freeing up their resources so that teachers can teach and students can learn.
The foundation has historically supported the startup of new charter schools through direct grants to schools and investments in support partners across the United States.
- Our first charter school startup grants: 1997
- Total charter school investment by 2016: $420 million
- Total number of charter schools funded by 2016: 2,232
The foundation has also historically helped charter schools secure facilities through grants or investments in facility developers and nonprofit lenders that provided no- or low-interest loans to charter schools.
- K-12 Education Program first charter school facilities grant: 2003
- K-12 Education Program facilities impact by 2016: $123 million in direct grant funding has been leveraged over 29 times to support more than $3.5 billion in project costs.
- Total number of school seats created by K-12 Education Program facilities funding by 2016: 207,300
The Building Equity Initiative
Big challenges require bold solutions. That’s why in 2016 we launched the Building Equity Initiative: an unprecedented effort to make it easier and more affordable for public charter schools to find, secure and renovate facilities. The goal is to alleviate the time and energy educators spend finding and securing buildings so more resources can go directly to students and teachers.
- BEI funding since 2016: $255 million
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 more resources available to help public charter schools when financing and securing facilities.
BEI Lending Funds
Charter Impact Fund
The Charter Impact Fund is a first-of-its-kind nonprofit revolving loan fund that provides long-term facilities financing and works with partner schools to establish permanent roots and support thousands of students. The CIF provides charter schools with access to lower transaction costs and quicker loan execution, allowing schools to save several million dollars over the loan term.
- Launched in 2018 with $200 million
- Loans up to $50 million for facility acquisition or refinancing of existing debt
- Provides 30-year fixed rate loans for up to 100 percent of project costs
- No fees associated with issuance, no debt service costs
- Open to schools anywhere in the United States
Facilities Investment Fund
Created in collaboration with Bank of America Merrill Lynch and managed by Civic Builders, the Facilities Investment Fund is an innovative private-philanthropic partnership to drive down costs associated with finding and securing facilities. The FIF will be available to single-site or public charter management organizations for new construction or site renovations.
- Launched in 2018 with $100 million
- Loans up to $20 million for shovel-ready projects
- Up to 5-year fixed-rate loans for up to 90 percent of project costs
- No prepayment penalty
BEI Direct Investments
Direct BEI investments to date have helped remove facilities barriers for educators and leaders in three cities––Denver, New York City and Oakland—allowing them to serve 6,900 students in the next 10 years.
- Denver = 2,800 students served
- New York City = 2,700 students served
- Oakland = 1,400 students served
Frequently Asked Questions
What is the Building Equity Initiative?
Launched in 2016, the Building Equity Initiative is an expansion of the Walton Family Foundation’s work to make it easier, quicker and more affordable for public charter schools to find, secure and finance the facilities they need.
What are the Charter Impact Fund and Facilities Investment Fund?
The Charter Impact Fund and Facilities Investment Fund are two distinct non-profit funds supported through the Building Equity Initiative, which provide quicker and more affordable access to long- and short-term financing, respectively.
The Charter Impact Fund is a first-of-its-kind nonprofit revolving loan fund that provides long-term facilities financing and works with partner schools to establish permanent roots and support thousands of students. The Facilities Investment Fund, created in collaboration with Bank of America Merrill Lynch and managed by Civic Builders, is an innovative private-philanthropic partnership to provide short-term financing and drive down costs associated with finding and securing facilities.
Is this the Walton Family Foundation’s first investment in charter school facilities?
No. Through its K-12 Education Program, the foundation has invested $123 million in direct grant funding, which has been leveraged over 29 times to support more than $3.5 billion in project costs to expand access to facilities for public charter schools. Separate from the BEI, the majority of these investments result in low-interest loans to help schools finance private facilities when public facilities or facility funding was not sufficient.
How is the Building Equity Initiative unique?
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. The initiative includes efforts to help individual schools grow to meet demand and identify opportunities to improve policy conditions related to charter school facilities in an evolving economy.
Not a one-size-fits-all national effort, BEI direct investments are customized regionally with support from local education non-profits. Our partners to date in Denver, New York City and Oakland have developed comprehensive citywide strategies to grow the supply of high-quality charter schools and identify for improved public solutions—including access to unused public space and adequate funding for charter facilities.
The groundbreaking lending funds created through the BEI, the Charter Investment Fund and the Facilities Investment Fund, will incentivize new and additional capital to public charter school facility projects at cost-effective interest rates. The CIF and FIF are making it faster and more affordable than ever for charter schools to access both long- and short-term facilities financing.
How do you measure the success of the Building Equity Initiative?
The initiative will be evaluated by:
- The number of students served;
- The quality of initiative-funded schools; and
- The increased affordability of charter facilities. The goal is to make it easier and more affordable for charter schools to secure capital, get lower interest rates and qualify for adequate levels of funding to finance their facilities—whether these schools are in BEI direct investment cities or apply for funding through BEI lending funds.
Where will the Building Equity Initiative help charters obtain facilities?
How does the Building Equity Initiative work for existing facility developers and lenders?
The BEI increases, not supplants, the capacity of existing organizations so they can serve more students by providing more affordable, available resources. The goal is to create a bigger network of resources—real estate experts, lenders, financiers, technical assistance providers and more—that charter schools can utilize when selecting facilities. This will make it quicker and easier for schools to secure spaces they need to serve their students.
How does the Building Equity Initiative work for city-based nonprofits?
In select cities across the nation, the foundation will continue working with leading city education nonprofits to design customized strategies to help alleviate the facilities challenge for charter schools. These efforts can look dramatically different based on the city.
How does the Building Equity Initiative work for schools?
Interested schools should learn more about the Charter Impact Fund or Facilities Investment Fund.
Is the Walton Family Foundation the only Building Equity Initiative funder?
The charter school facilities challenge is massive—it can be measured in the tens of billions of dollars. Less than half of all states that allow charter schools provide charter schools with any per-pupil facilities allowance, and opportunities to share space with district schools are rare. We recognize that this is not a problem that the foundation alone can solve, and the BEI is only part of the solution.
Bank of America Merrill Lynch contributed $66 million to the Facilities Investment Fund. The Facilities Investment Fund builds on Bank of America Merrill Lynch’s work since 2000 to provide more children access to high-quality public charter schools. To date, BoAML charter school financing has exceeded $1 billion and created educational opportunities for more than 25,000 students at over 80 schools.
These funds are only the start of what we hope will be an ambitious effort to level the playing field for charter schools’ facilities needs.
Is this Walton Family Foundation investment in addition to the foundation’s five-year $1 billion investment to improve K-12 education, or is it part of that commitment?
This initiative is in addition to the foundation’s five-year commitment to K-12 education. Initiative efforts will complement and enhance the foundation’s existing five-year strategy.