Afton supports major charter school operator through managerial and financial transition
Afton was engaged by UNO Charter School Network (“UCSN”) in 2015 to advise the organization through a transition from its former management company. UCSN operates 16 public charters schools for 8,000 students, authorized by Chicago Public Schools.
Prior to 2015, all back office supports for UCSN’s charter schools were contracted to the non-profit management company out of which UCSN was created in 1998. As it became necessary for UCSN to develop its own back office supports for its schools, the organization undertook a year of planning prior to implementation of the transition. During this planning period and into the transition itself, Afton advised the organization on all financial aspects of this transition, including one-time and recurring costs of the transition, finance and accounting operations, annual budgeting, long term planning, capital structure, financing, and facility acquisition matters.
Following the management transition, Afton was engaged by UCSN to support the organization’s multi-year financial planning, collective bargaining negotiations, and facility acquisition planning.
Our Insights
There is shared accountability for the failed relationship between the former management company and the charter schools. In retrospect, the corporate structure that was set-up between the two organizations did not properly serve families and students. With the two non-profits sharing the same board members and having a management contract between the two organizations, there was not sufficient accountability over the value of the management services that the schools were receiving. Furthermore, there was a confusing entanglement between the two entities beyond the management services contract, specifically as it related to facilities ownership and the related indebtedness. Board members have an important role in understanding the corporate structure and ensuring alignment of mission to operations. Charter authorizers also have a responsibility to assess the reasonableness of a management services arrangement.
Allow multi-year vision impact today’s decisions. UCSN used the financial forecast and analysis developed with Afton’s support to inform the organization’s strategy on facility acquisition, financings, and the build-out of its new central office support structure. Knowing where the organization wanted to be in 3-5 years with acknowledgement to the financial pressures of contractual obligations and Chicago’s funding environment encouraged difficult yet necessary decisions to be made throughout the transition and in the year immediately beyond it.
Protect school principals from the organizational “noise”. This management transition was a very public divorce between two non-profit organizations. The UCSN board and leadership team took great care to communicate consistently with its families and employees with regards to the transition and involved school leadership minimally in the work of the transition. As a result, UCSN schools continued to perform very well on Chicago Public School’s academic accountability ratings.