Working with Charter School Budgets

1. Working with Charter School Budgets FROM THEORY TO PRACTICE R. Lemoyne Robinson Chancellor of City University Schools and President/CEO of The Influence1 Foundation

2. It�s not academic: Why charter schools close The Center for Education Reform, a charter school advocacy group, found that of the 5,235 charter schools opened since 1992, 657 have closed�12.5%. Of these 657 schools, only 91�or 14%�were closed for �academic reasons,� defined as schools �whose sponsors found them unable to meet the academic goals and performance targets set by the state or written in their charter.� Close investigations reveal that some charters supposedly closed for academic reasons were in reality closed because of finances, mismanagement, or other organizational problems.

3. Top 5: Why Budgets Fail Fiscal 44% Facilities 6%

4. The New Business of Education�Charter Schools Although public educational institutions, charter schools must be very familiar with three-facets of a free market economy: government, non-profit and corporate. Government: As a public school receiving both state and federal funds, the charter school must be committed to understanding and achieving the goals and requirements as outlined by the State Department of Education, as well as, federal laws, benchmarks and policies. Non-profit: The sponsoring organization must adhere to all codes outlined by the Internal Revenue Services under the 501(c)3. Corporate: As a budding business, the charter school and its sponsoring organization must address several business principles, to include: marketing, sales and especially finance. Please Note: All expenses must be transparent, responsible and accountable in order to meet the threshold presented by each facet.

5. Sources of SupportRevenue to support the charter school may come from various sources Federal and State Grants: Federal start-up funding can be anticipated at $250,000-$700,000 over the first two years of operation.� Other state funding opportunities are available as outlined by state RFP�s. District funding: These funds vary by district and can include: state funding for public education, local tax base, IDEA, ADA, etc. Please verify with your LEA (Local Educational Agency) or District. Fundraising: Charter school boards are well-advised to have a fundraising plan, as well as, specific guidelines for third-party fundraising. Philanthropic gifts and grants: Gifts and philanthropy may be available to support schools and value-added programs (specific programs that expand or enrich the basic educational program): etiquette programs, college tours, evening tutorials, ACT/SAT prep, summer programs, arts enrichment, research labs, etc.

6. Top 5: Why Budgets Fail Projections: Often times, all source revenues and baseline expenses get lost. When creating the school�s budget, go back over your assumptions, projections, past records and negotiated contracts. Shortfalls: It is impossible to know every dollar you�re going to have to spend, because things happen. That�s why a reserve account is critical. To budget for the unexpected, determine how much the school can save per month and set that aside in a separate account. Tracking: If you make purchases and lose track of receipts/contracts/invoices, you may need to prepare for failure. Stay on top of spending to have an accurate fiscal picture at all times. Lack of Understanding: Some people make great school administrators but poor fiscal officers. Quite a few people say they have a budget, but they have never actually written one down! A general idea of revenue and expenses does not suffice as a budget. Mismanagement: Fiscal affairs is a monogamist relationship. No one person should have complete control of the budget nor should everyone access to the funds and resources of the budget.

7. Mission (im)Possible: building a fiscally sound budget The most critical aspect to formulating a fiscally sound budget, is built on assumptions. Budget assumptions are not mere guesstimates, but are critical baselines that serve as the foundation by which the school�s budget is built. Assumptions: Student Enrollment, District Funding Per Student, Number of Teachers, Space Capacity etc.

8. Budget Exercise

9. Practical Applications: Stretching Budget Resources Spend within the means of 85% of your overall budget Negotiate all contracts and purchases Be sure all items (over $2,500/$4,999) have at least three bids Place the responsibility of expenses in the hands of your stakeholders Use every resource available before making new purchases Work with or make use of district and state negotiated pricing Build a relationship with your bank�at least two Build your organization�s creditworthiness to access business credit cards and lines of credit Consider stretching payroll and other reasonable expenses Look at opportunities of shared expenses, within and without your organization Make full use of your organization�s 501(c)3 status Remember nothing under the sun in education is new�including desks

10. Questions and Answers Please feel free to ask questions regarding budgeting as it relates to best practices and lessons learned.

11. R. Lemoyne RobinsonChancellor, City University Schools and President/CEO, The Influence1 Foundation City University. 1500 Dunn Avenue. Memphis. Tennessee. 38106 Influence1. 665 Madison Avenue. Memphis. Tennessee 38103 offices. 901-775-2219 or 901-526-1944 mobile office. 901-212-5371 facebook. Lemoyne Robinson rlemoyne@cityuniversityschool.org or rlemoyne@influence1.org