By Rachel Scott, The Finance Project

"Do what you love and the money will come..."—this is not always the case for independent charter schools. Charter schools rarely fail because they chose a bad curriculum or professional development system or families just didn't like what they do; a majority fail due to financial issues that include a lack of cash flow, a lack of long term funding, and failure to accurately estimate costs. In other words, for an independent charter school, the budget is the mission. Without solid financing systems and stable and sufficient revenues in place, quite frankly, most other considerations regarding running a quality and impactful school are moot points. Translated another way, if an activity or staff member isn’t adequately planned for and included in the budget, then they’re not authentically a part of the mission, either.

Top Five Reasons Why You Shouldn't Wait to Shore up Your Financial Knowledge and Systems:

1. In most states, charter school operators must fund physical plant costs out of per pupil revenue allocations, or whatever funds the school can raise. If physical plant cost estimates turn out to be too low, for instance, school leaders’ valuable time and attention get pulled away from students in order to rapidly fill the gap for critical items like heating and cooling systems or plumbing.
2. Veteran charter school operators often report, "I didn't even know what I didn't know," until some crisis or embarrassing audit results brought problems to light. Learning from the pitfalls others survived (or didn't) can cut back on your future lost sleep and gray hairs.
3. According to the Center for Education Reform, charter schools "are funded at 61 percent of their district counterparts," so more charters rely upon a more diverse pool of funds to keep them afloat, each stream with its own reporting requirements, restrictions, and timeframes.
4. Although government revenues were once considered among the most reliable, the economic recession has left most states with severely reduced expenditures in essential categories like education and health care. Not only is there less money available for public entities to allocate, funding agencies in some states have begun to lag further behind in reimbursing expenses or disseminating grant funds. Failure to anticipate and plan for the slowing or even disappearance of some revenue streams can be devastating for a charter school.
5. Most state charter school laws consider individual charter schools to be their own Local Education Agency (LEA), meaning an individual charter school must cover administrative costs that larger LEAs – typically comprised of multiple schools - can spread across several additional schools and cost centers.

Realizing these very real challenges and issues lead to the closures of many charter schools, the Center for Education Innovation-Public Education Association (CEI-PEA) and several organizational partners developed The Network of Independent Charter Schools. The Network is designed to support teachers, administrators and trustees in developing best practices and collaborating with one another, and to help independent "mom and pop" charter schools succeed. Funded by the U.S. Department of Education, it delivers a comprehensive and integrated array of services and resources—free of charge—to help improve the capacity of teachers, administrators and trustees at independent charter schools. In addition to a rich library of resources, the Network of Independent Charter Schools offers Community, Collaboration, and Support in the area of Financial Systems and Support through their on-line Social Learning Institute administered by EduPlanet and The Finance Project. Members of this learning community will have the opportunity to interact with leaders of other independent charter schools to share challenges and best practices regarding financial management and internal systems. To join this community, contact CEI-PEA at pking@thecei-pea.org.

The views expressed in Charter Notebook blogs represent the views of the authors and do not necessarily reflect the views or positions of the Center for Educational Innovation-Public Education Association or the U.S. Department of Education.