A Building Boom for Charter Schools Is Coming. Guess Who's Footing the Bill?

Everyone knows the Walton Family Foundation backs charter schools, but many people don’t realize just how instrumental its money has been in creating new charters nationwide. The foundation reports that in the past 20 years or so, it has invested “more than $385 million in 2,110 new public charter schools—about a quarter of all charters nationally. This past year, we supported more than one in five of the nearly 500 new charters that opened nationally.” Walton has also given tens of millions to build a teacher pipeline for charters, create a charter-friendly public policy environment, and more.

That’s a huge investment. And significantly, much of it has taken the form of bricks-and-mortar funding, which many other major foundations avoid. Now, even more Walton money is set to flow to charters as it doubles down in this area over the next five years.

On the 25th anniversary of the charter school movement, the Walmart heirs announced a major $250 million dollar initiative to help charter schools in 17 cities expand their facilities (and build new ones) to add another 250,000 seats for children by 2027. The funds provide low-interest loans to charter schools through national and regional non-profit lenders in an effort to finance facilities for new and growing charters. The Building Equity Initiative, as it is called, also fosters a larger network of resources in the form of financiers, real estate experts, and technical assistance providers for charters to leverage as they strive to meet their facilities needs.

With over 600,000 students on waiting lists for seats in charter schools nationally, the goal of the initiative is to take a chunk out of that list by catalyzing a more favorable environment for the expansion of charter schools’ physical spaces. Interestingly, traditional lenders—like many skeptics in the education sector, as it happens—see charter schools as an unproven investment, which means that they struggle to find the private financing that they need to secure, build, or renovate their campuses. The management of the Building Equity Initiative will be led by Civic Builders, a noted nonprofit charter facilities developer based in New York.

The hope is that this philanthropic funding will allow new or expanding charters to overcome the many obstacles to facilities construction. Beyond direct financial help, a key is pushing the government and private lenders to adopt more favorable policies toward charters. This is one of the biggest complaints among charter school supporters: that they are simply not treated like traditional public schools when it comes to the allocation of funds from the state. Only one in three states provide facilities funding for charter schools, leaving most charters to their own devices when it comes to funding for facilities. Supporters see this as a critical part of the playing field that needs to be leveled for charters to compete, though many have state per-pupil funds as well as philanthropic backing and other private financing supports.

Meanwhile, a quarter century into the charter movement, the debate goes on about the effectiveness of these schools. A recent MDRC study of the SEED School in Washington, DC (a unique boarding school-style charter) found that while students in this particular charter earned modest increases in test scores, those improved test-taking abilities did not always translate to improvements in life outcomes like high school graduation rates, college retention, and reductions in risky behaviors.

This isn’t the first time that research has raised real questions about bold claims made by charter leaders and funders about their ability to change the long-term trajectory of students’ lives through more improved academics during the K-12 years.

Speaking of assessment, we should mention that Walton has an eye on tracking the effectiveness of the Building Equity Initiative from its start. They’ll measure its efficacy by looking at the number of students served across the initiative, the quality of those schools, and any increases in accessibility and affordability of capital to finance charter facilities.