The Bill & Melinda Gates Foundation and the Charles and Helen Schwab Foundation are helping a California charter school network secure $93 million in tax-exempt bonds to aid in its expansion and the enrollment of more than 4,000 new students.
The unusual financing arrangement is known as a Program Related Investment. Both the Gates and Schwab foundations have provided $8 million in unfunded guarantees to Aspire Public Schools to back the charter organization’s bond financing for new school buildings.
Because state and local governments typically do not provide buildings for charter schools, which are public but largely independent, expansion was difficult even before the economic situation tightened credit markets, according to Allan Golston, the president of the United States Program at the Gates Foundation.
The foundations’ credit support helps Aspire access the bond market at more favorable terms.
A version of this article appeared in the May 12, 2010 edition of Education Week as Foundations Help Charter Network Secure Bonds