Our Investment Model

New Schools for Chicago developed a five-step process to raise the performance bar, tie funding to performance, and provide better access to information.

Our investment model follows the following steps:

1.    Initial Screen.  Our staff evaluates publicly available data to identify high-performers, then our staff and board members recruit priority Charter Management Organizations and secure their interest in serving the children of our city.  At that time, we review student level data and other non-publicly available indicators of quality supplied to us by the CMO.

2.   In Depth Due Diligence.   Our staff and external consultants work in partnership with the CMO for up to eight months to complete a thorough and rigorous analysis of absolute and relative student performance, financial viability, organizational strength and strategic business plans.  We share this information and our recommendations with the District as part of the charter authorization process.

3.    Investment Decision.  We invest $1-5 million in each high-performing, established CMO over a period of two to five years tied to strategic performance milestones.  The investment amount and period is influenced by the growth stage of the CMO.  Up to $500,000 is available for high-potential CMOs not yet ready for our portfolio to develop or refine their business plan.

4.    Monitoring and Oversight.   We use a milestone-driven approach to release funds to bolster our ongoing role of strategic adviser and to keep CMOs accountable.  Our staff participates in the board meetings of CMOs in our portfolio, as well as conducts quarterly reviews of academic and financial performance.  We build in potential for bonuses for exceptional performance, as well as added support or loss of funding for those who are struggling.

5.    Graduation/End of Funding.  At the close of the funding cycle, which ranges from one to five years based on the CMOs need, we document results and share these with the District and our investors.  We also continue to monitor performance through our contracts with CPS and review the potential for additional funding rounds.

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