JPMorgan Chase Selects LIIF as Partner for Charter School Initiative
JPMorgan Chase announced today a $325 million initiative to support the growth of high-performing U.S. charter schools in today’s challenging credit environment.
“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 Chairman and CEO Jamie Dimon. “Improving educational opportunities is a cornerstone of JPMorgan Chase’s philanthropic giving.”
The bank will provide $50 million in grants to community development financial institutions (CDFIs) focused on funding charter schools. In turn, these institutions will use these grants as permanent equity, which they will leverage to fund top-performing charter schools.
Additionally, JPMorgan Chase will work with the 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. This will allow the CDFIs to access Obama Administration financing programs designed to help charter schools meet facility needs.
JPMorgan Chase estimates that this initiative will help underwrite about 40 charter schools, which will serve more than 50,000 students throughout the term of the loan.
Initial CDFI partners include The Reinvestment Fund of Philadelphia, The Low Income Investment Fund of San Francisco, and NCB Capital Impact of Arlington, Va. Additional partners will be announced later in the year.
“The Low Income Investment Fund (LIIF) is proud to be one of the partners with JPMorgan Chase on this initiative. Through this financing initiative, JPMorgan Chase and LIIF will invest in exceptional educational opportunities for thousands of low income students,” noted Nancy O. Andrews, President and CEO of LIIF. “A key constraint to growth for many high performing public charter schools is their ability to finance facility development or enhancement. By providing an equity investment, JPMorgan Chase and LIIF will give schools access to affordable capital in a difficult credit environment.”
The grants to help charter schools are part of JPMorgan Chase’s larger $100 million grant initiative for CDFIs that also support small businesses, community healthcare centers, green initiatives and affordable housing. Details on the rest of the initiative will be announced later this year.
“JPMorgan Chase has been a committed partner to the CDFI industry by providing critical access to capital where it otherwise might not exist,” said Terry Simonette, President and CEO of NCB Capital Impact. “This new initiative continues that commitment by providing the critical capital that is required for charter schools to meet the need for access to quality education in low income and underserved communities.”
Despite the increasing demand by families across the country for charter schools, they have found it difficult to arrange financing for expanded and new facilities.
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.
“In these next seven years, this new investment by JPMorgan Chase in The Reinvestment Fund projects will allow us to create school opportunities for thousands of students,” said Jeremy Nowak, President and CEO of The Reinvestment Fund. “This major investment certainly positions the bank as a national leader supporting charter schools and meeting their significant unmet financial needs.”
JPMorgan Chase sees high potential for improving childhood education and community development through charter schools, and is committed to their development. The bank has been an active supporter of public school education, donating $181 million in education grants over the last five years. Additionally, the bank provided nearly $12 billion in financing to education institutions and school districts through lending and bond underwriting in 2009 alone.
Community development financial institutions that fund charter schools and are interested in applying for a grant through this new program should contact JPMorgan Chase at CharterSchools.CDFI@jpmchase.com.Source: Business Wire