When Anand Kesavan became the first chief financial officer of KIPP Austin, students were thriving, demand was high, and the network was planning to grow from two schools to 10. But like many charters, KIPP Austin was mired in complicated and expensive building leases and loans, which accounted for 18 percent of per-pupil spending.
“This was my bread and butter. Financial capital strategy was what I was good at, and I had done billions in deals as a banker,” said Kesavan, EP 2010. He had spent more than a decade climbing the corporate ladder at investment firms in New York and San Francisco before taking the job at KIPP.
He revamped the network’s financial practices and debt, which brought facilities costs down to 8 percent of spending and freed up more funds for the classroom.
“We used the savings to hire teachers, aides, intervention specialists—all of the people doing the real work to educate children and drive academic outcomes,” he said.
Paying for classroom space is a common challenge for charters, one that inspired Kesavan to eventually found the Equitable Facilities Fund. The Fund provides low-cost, long-term financing for charter schools that serve disadvantaged students and have a track record of success, including steady leadership and stronger academic progress than the traditional public schools in their community.
“Charters want to do what’s right by their students, but they don’t have the capital, reasonable credit, or an equitable source of financing,” he said. “We’re like your friendly bank down the street. But as a nonprofit, we lend at cost.”
In its first four years, the Fund loaned more than $520 million to support 80 schools. These 30-year, fixed-rate loans give charters more predictability and control over their financial futures. And they will save the schools more than $120 million in interest, Kesavan said.
“I feel grateful and humble to be doing this work in this industry at this level,” he said. “I might not be doing this if it wasn’t for Education Pioneers. It was part of a transitional phase in my life and the cohort events, the network, and the internship itself—I can’t overestimate how much it all helped me make this change.”