Friendship Public Charter School

Please note: this Investment Summary represents VPP's perspective at the time of the investment agreement, May 2006.

In May 2006, VPP entered into an investment partnership with Friendship Public Charter School (FPCS), which is considered one of the largest and most successful public charter school networks in the country.

The strategic investment of up to $2.5 million supports specific strategic initiatives related to Friendship’s plans for growth and for improving the quality of its existing schools. VPP previously invested $400,000 in May of 2005 for Friendship's business planning process which developed the roadmap for improvement and expansion.

VPP is undertaking this investment collaboratively with NewSchools Venture Fund who are also deeply committed to supporting Friendship School. NewSchools is a national nonprofit venture philanthropy firm that works to transform k-12 public education by supporting education entrepreneurs so that all children—especially those underserved— have the opportunity to succeed in the 21st century. Through its Charter Accelerator Fund, NewSchools has supported more than a dozen high-quality charter management organizations (CMOs)—nonprofits that create and manage aligned systems of like-minded charter schools. These organizations focus on the need to address both scale and consistent quality in the charter school movement.

OPPORTUNITY
Friendship’s “whole child” approach to urban education is changing outcomes for children and youth, and demonstrating how to successfully deliver high-quality education to students in an urban area. Friendship students benefit from strong school leadership, research-based instruction, caring and well-trained teachers, state-of-the-art instructional technology, wrap-around social services, and high levels of community involvement.

FPCS aspires to expand in several new directions over the next 3 to 5 years and increase its current enrollment to 5,500 students. Specifically, Friendship aspires to:

• Consistently improve student performance to meet AYP and become the public school of choice;

• Educate the “whole child” with a wide range of academic and non-academic offerings;

• Expand impact in terms of both number of schools and number of students;

• Widen portfolio of education options to respond to range of student needs not being met in Washington, DC;

• Build an enduring organization that will outlast all current employees; and

• Prove that large urban public schools can be successful.

In an effort to reach these goals, FPCS is targeting several specific areas of growth following business planning including the following:

1. Growing the Woodridge campus from its current enrollment of pre-K to grade 7 to include grade 8, adding at least 75 more students to its enrollment over the next two years (an addition was completed in December 2004 to accommodate this growth).

2. Growing the Southeast campus from its current enrollment to add at least 200 more students over the next two years.

3. Adding pre-K programs at its other elementary campus as soon as space is available.

4. Building and opening the first K-12 International Baccalaureate Program in the DC metropolitan area. FPCS has made bids to acquire a campus that would serve 1,000 students in Northwest DC, FPCS’s first campus in that part of the District.

5. Establishing Tech Prep in Southeast DC to serve 600 secondary level students (either 6-12 or 9-12) with state-of-the-art career education and trade apprenticeship programs. FPCS has made several attempts to purchase land for such a campus and once they are successful, aspires to build a new facility designed specifically for a school-to-work, career education curriculum.

The estimated capital allocation of $2,500,00 takes into account the organizational demands and requirements necessary to successfully manage a growing, multi-site, complex public education system with ultimately six schools and an average enrollment of approximately 800 students per site. We also anticipate that this investment will help FPCS deepen and increase academic oversight, strengthen facilities and financial management, and broaden accountability processes and systems. This strong core group of systems and processes will be needed to establish and ensure continuous improvements in student achievement and long-term stability in FPCS’s programs, services and campuses while experiencing significant growth.

INVESTMENT RATIONALE
Donald L. Hense has proven himself to be a strong and enduring leader and has assembled a capable team. In 1997, Donald understood the serious shortage of acceptable school facilities in the District and moved quickly to secure four former DCPS buildings to use them for FPCS campuses. Edison Schools, Inc. has been a crucial and instrumental partner in providing technical assistance, supervisory and human resources support, curriculum design and training, student assessment support, facilities management, budgeting, and purchasing. FPCS owns its buildings and almost all of the equipment in the schools, and if Edison were to dissolve or no longer remain a partner, the schools would still have the resources they need to remain operational.

FPCS has a five-year track record showing increasingly improving academic trends as measured by the SAT 9, the city-wide achievement test. From 1998 through 2004 Friendship Schools has improved its overall reading and mathematics performance across all four schools by an average of 26.6 nationally normed percentile points. The lowest gain was 12 percentile points and the highest was 40 percentile points. Three of its four schools met or exceeded their targets in their accountability plans for 2002-03. In 2003-04, 2 of 4 schools met their achievement targets and two remained static. On District-wide standardized tests the FPCS elementary schools have consistently ranked in the top 10 for academic improvement among nearly 200 public and public charter schools.

Only one charter junior high school and no other public junior highs raised scores faster than the Friendship junior high campus at Blow Pierce. As of Spring 2004, the graduation rate from Collegiate Academy (the high school campus) was 95 percent. Of those seniors who graduated, the college acceptance rate was 90 percent. This is more than double the current average rates for students in DCPS. All of the campuses have a significantly lower attrition and mobility rate than DCPS schools. Dropout rates for FPCS’ high school students are the lowest (less than 5 percent annually) of all large public high schools in the city.

Parental involvement is encouraged and is a prominent feature of FPCS. Parental satisfaction with the campuses is routinely high as measured in the Edison Schools Annual Report on School Performance. Since its inception, Friendship Schools have consistently received parent satisfaction scores ranging from low 80 percent to the mid-ninety percent. These parent satisfaction rates are similar to the better public school systems locally and nationally.

Friendship School’s share of total charter school enrollment has increased steadily since 1999, with an extraordinary percentage of those students attending one of the four Friendship schools. In 2003-04, there were 17,000 students in District public charter schools, with 19 percent of those students enrolled in FPCS.

SUCCESS FACTORS
We believe this investment in FPCS will be successful because of the following key factors:

The catalytic event that enabled Donald Hense to create FPCS was the District of Columbia School Reform Act, one of the strongest charter school laws in the United States, which was passed in 1996. FPCS should remain part of the District’s educational landscape as long as it remains a high performer and these current conditions continue to exist: 1) legislative framework authorizing charter schools in the District; 2) stream and method of federal and local government funding; 3) high levels of private and philanthropic investment; and 4) growing enrollment in charters.

The Board of Directors for FPCS is strong and corporate in its orientation. It consists of local corporate leaders (including Ed Walter the CFO of Host Marriott, and Chris White, Chairman and CEO of the Krissam Group), attorneys, philanthropists, and educators (including Floretta Dukes McKenzie, former DCPS Superintendent, and Dr. Gregory Prince, President of Hampshire College) as well as parent representatives.

Donald Hense brings deep experience and knowledge of the DC community to his role as CEO and Chairman of the FPCS Board of Directors. Prior to his current role, he also managed Friendship House for more than 10 years. He is well respected in the communities served by the five FPCS campuses and has a wealth of expertise in running large nonprofit organizations.

In November 2003, FPCS had a successful bond issue of $44.9 million. The bonds were highly rated by Standard and Poor’s, which is unusual but warranted in this case due to the fact that all per pupil charter school project formula payments from the District government were pledged to pay debt service on the bonds. Proceeds from the bond sale were used to pay off $26.6 million in existing debt and to provide for near term physical plant expansion/upgrades and technological investments in the original four FPCS campuses.

In May 2004, the Middle States Association of Colleges and Schools accredited FPCS. FPCS was the first Public Charter School Board charter school to be accepted by the Association as a candidate for and recipient of accreditation. This accreditation places FPCS’s academic programs, management, teaching staff, and facilities on par with high schools in the surrounding suburban counties.

The Public Charter School Board, which oversees the FPCS’s charter, reviewed the progress of the School in 2003 and continued its charter for another five-year period. In 2005 when the Public Charter School Board planned to revoke the charter of Southeast Academy, it asked Friendship to consider adding this school to its system. Friendship agreed and successfully opened the new campus in September 2005 and integrated it into their system.

Edison Schools, Inc. rates FPCS as its top charter school partner. Chris Whittle, Edison founder and CEO, and Joe Keeny, former president of Edison’s charter school partnerships division, remarked that FPCS is the largest and highest performing charter group in its nationwide charter network.

FPCS attracts students from the four eastern Wards of the city, with significant numbers of students enrolled from Wards 7 and 8 east of the Anacostia River.

USE OF FUNDS
Through this investment partnership, VPP will provide up to $2,500,000 in funding and strategic assistance to help Friendship:

1. Re-craft the organizational structure to provide for long-term stability, succession, financial management and oversight, and to sustain and improve educational quality in current programs and operations.
2. Strengthen the leadership, finance and operations team to enhance skill and experience sets to improve current operations, improve contract management, and manage for growth, and identify leadership and management talent.
3. Develop strategy and tactics for growth and expansion for K-12 IB and 6 (9)-12 Tech Prep and advise on new schools educational program design and implementation.
4. Build on and enhance current outcomes framework, financial planning and decision-making, and accountability systems.
5. Assess “Friendship” brand and help determine relationship with Edison for future growth.