By Amir Ali, vice president, Community Facilities and New Markets Tax Credits, Low Income Investment Fund (LIIF)
“Education is the most powerful weapon you can use to change the world for the better,” so said civil rights leader and Spelman College alumna Marian Wright Edelman. The founder and president emerita of the Children’s Defense Fund had a mission that aligned with that of the Community Foundation for Greater Atlanta’s GoATL Community Capacity Fund (Capacity Fund), which provides low-cost and patient debt to the region’s most innovative intermediaries, and the Low Income Investment Fund (LIIF). That’s why our 40-year-old community development financial institution (CDFI) has leveraged the Capacity Fund’s invaluable partnership and catalytic impact dollars to invest in some of the Southeast’s best examples of charter schools generating educational equity. LIIF’s product provides flexible lending terms and has quickly showcased success. A focus has been metro Atlanta.
LIIF envisions charter schools as part of an ecosystem of support for historically under-resourced communities. Take the case of East Point, a southwest Atlanta community and key neighborhood of focus for the Foundation, as outlined in their strategic plan, and LIIF. Of the neighborhood’s 38,100 residents, three-quarters identify as Black and 15% as Latino. There is a 19.8% poverty rate—and education is paramount to changing that dire statistic.
That’s why in January 2022, LIIF put a place-based strategy into play, providing a $6.35 million acquisition loan that allowed East Point independent charter school Ethos Classical to purchase their building.
Ethos Classical Founder Emily Castillo León says of the power of this investment, “LIIF’s acquisition loan was transformational. They did cartwheels to make this deal a reality by being open-minded and flexible. Traditional lenders were all too risk-averse—there’s a gap in the lending ecosystem for early-stage schools. As a CDFI, LIIF closed that gap, so this acquisition loan made our expansion come earlier in our life cycle than is typical for most charter schools. We now have stability. Permanence. Community ownership. That matters to our families.”
Castillo León and the other founding leadership team members, who are all still working at Ethos Classical, then looked to scale to meet community demand. They sought a school where they would want to send their own kids – and all have enrolled their little ones at Ethos Classical.
So LIIF partnered with another CDFI, Reinvestment Fund, to each offer a $9.1 million, seven-year, 100% loan-to-value construction and mini-permanent loan to fund the build out/expansion of Ethos Classical, which puts forth “a rigorous classical curriculum, within a structured supportive community.” The scaling translated to the school having 50,000 square feet, adding 24 K-5 classrooms to the original six and replacing modular facilities. Always looking to better their spaces, there is a plan for reimagined outdoor play areas once funding is garnered.
It should also be noted that a collaborative of eight lenders, including LIIF, used a two-year process to define racial equity with regard to education. Schools now get asked a set of standard questions: Ethos scored high, especially around social-emotional learning (SEL), a developmental process that helps students learn skills to manage emotions, build relationships and make responsible decisions.
SEL is embedded in Ethos Classical’s curriculum and practices. All team members are trained to build the 650 students’ self-identities. It’s a holistic approach laser-focused on fostering diverse learning, providing student-leadership opportunities and ensuring discipline is centered on systems and routines around initially making the right decisions.
The community has taken notice of Ethos Classical’s success, as there are currently over 700 children on the waitlist. Parents give glowing, five-star recommendations online. One parent whose children attend the school said, “I have never seen a team of administrators and educators so passionate about the potential of their students. It really feels like a team has come to equip my children.”
Ethos is just one success story of many around this work that puts racial equity in education into our lending practices. LIIF looks forward to celebrating many other such community wins in the future.
Are you a philanthropist or investor looking to drive racial equity in lending for educational facilities? Contact Amir Ali at communityfacilities@liifund.org to discuss how to partner in this work.
