JPMorgan Chase has announced a $325 million initiative to support the growth of high-performing charter schools in the United States.
The global financial services firm will provide $50 million in grants to community development financial institutions that in turn will use the funding as equity to leverage funding to top-performing charter schools. The bank also will work with CDFIs to provide about $175 million in debt and approximately $100 million in new markets tax credit equity to support the development of charter school facilities, enabling the CDFIs to access federal financing programs designed to help charter schools meet their facility needs.
To date, the bank's CDFI partners include the Reinvestment Fund in Philadelphia, the San Francisco-based Low Income Investment Fund, and NCB Capital Impact in Arlington, Virginia. Additional partners are expected to be announced later this year.
JPMorgan Chase estimates that the initiative will help underwrite about forty charter schools serving more than fifty thousand students. Despite the growing demand from families across the country for charter schools, arranging financing for expanded and new facilities has been difficult. While public school districts can access the municipal bond market for long-term funding, charter schools almost always pay more for financing because lenders require higher interest rates from the relatively new industry.
"Many charter schools have expanded access to academic opportunities for students in all types of communities, so we shouldn't let tough economic times bring them down," said JPMorgan Chase chair and CEO Jamie Dimon. "Improving educational opportunities is a cornerstone of JPMorgan Chase's philanthropic giving."