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Reduced-rate Loan Helped KIPP Nashville Fulfill Expansion Dream

March 3, 2020
The school’s savings on a new facility allowed it to spend more on teachers and students.

When KIPP Nashville first applied for its state charter in the early 2000s, its application was denied.

The reason, says Dan Gennaoui, KIPP Nashville’s chief financial officer, was that “the state felt the network was setting an unreasonable expectation that all students would be able to obtain a college degree.”

The network was seeking to educate a historically underserved population in the city, the low-income black and Latino students and families of East Nashville.

KIPP Nashville bought and renovated an 82,000 square-foot location with help from a low-rate Equitable Facilities Fund loan.

Fast forward to 2019, and KIPP Nashville’s seniors are now graduating and heading to college at four times the rate of their area peers.

A number of locations in the seven-school K-12 network have earned “Reward School” status, which puts them in the top 5% of performers in the state.

As the network looked to serve more students and expand from its original location in a former youth detention center, it began to hit roadblocks.

“We receive very limited state dollars unique to facilities,” says Dan. “So, if we choose to spend money on a building, it’s coming directly out of state and local dollars that should be going into the classroom.”

Savings from KIPP Nashville's Equitable Facilities Fund loan have allowed the school to spend more on teacher salaries and special education.

The network had been renting a building from the city for their College Prep elementary and middle schools in Ewing Park, a location that “was in such decrepit shape, leaking in the winter and getting down to 60 degrees in the classroom,” says Dan.

The network decided to buy and renovate the 82,000 square-foot location with a loan from the local bank. It then was able to refinance the loan through the Equitable Facilities Fund [EFF] at a significantly lower interest rate in 2019.

“The EFF loan has allowed us to spend about 8.5% of our state and local funding on the facility, compared to other charters across the country spending 12, 13, 14%,” says Dan.

KIPP Nashville students are graduating and heading to college at four times the rate of their area peers.

The Equitable Facilities Fund is one of two non-profit loan funds within the Walton Family Foundation's Building Equity Initiative, an unprecedented effort to make it easier and more affordable for public charter schools to find, secure and renovate facilities.

To date, thousands of students in more than 100 schools are in new or renovated schools or have received facilities technical assistance with support from $185 million in BEI funds.

With the improved interest rates offered by EFF, schools have been able to devote more resources where they belong — in classrooms. By mid-2020, EFF will have committed over $200 million in low-cost, long-term loans to high-impact schools serving over 25,000 students.

The EFF funds made a significant difference for staff and students at KIPP Nashville.

“It has really opened up the opportunity to spend more on teacher salaries, on special education, ELL and curriculum development,” says Dan.

The network completed renovations to the building in the summer of 2019, improving the space and growing it into a full K-8 site.

The Building Equity Initiative is an unprecedented effort to make it easier and more affordable for public charter schools to find, secure and renovate facilities.
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