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HomeMy WebLinkAboutPlanning Manual The Elim Group Westlake Academy — Westlake, Texas Board of Trustees Retreat September 12th and 13th, 2008 Friday Morning - 8:30 a.m. (Staff Only 8:30 to 11:00) -4r- 8:30 to 9:00 Continental Breakfast -4�- 9:00 Welcome -%� Five Senses & Permission to Play 4- Practice Time Versus Performance Time -4p. Abbreviated Agenda Review/Purpose • Goals for Retreat • Role Clarification • Good Governance • Communication • Issue Identification—What is Policy? • Values, Vision, Mission -4,. Team Building (DISC Review) o Concept of"3" Teams; Trustees, Staff and Combined 10:30 BREAK& 11:00 Full Group Convene -. Full Group Welcome & Introductions 4 Agenda Review/Purpose 4 Goals for the Retreat ,k, Strategic Planning Process • Environmental Scan - SWOT • Outcomes developed Note: Lunch will be in the Hotel. • Activities delegated • Measures agreed to We Help You create OUR uses! "Critical Conversations" • Governance & Process • Roles • Communication • Monitoring Friday Evening— 5:00 p.m. 4 Dinner and Traffic Calming Saturday Morning — 8:30 4 Values, Vision, Mission—Review & Revise 4 Creation of a Work Plan •6 Check In on Goals for the Retreat Working Lunch 4 Complete Goal Achievement +6 Review and Wrap-Up ,46 Encouragement and Adjourn no later than 2:00 Mike.Conduff @TheE1imGroupxom Biography Michael A. (Mike) Conduff Michael A. (Mike) Conduff is the President and CEO of The Elim Group — Your Governance Experts, a governance, leadership training, speaking and consulting firm. Mike has 30+ years of leadership, management and governance experience, having served as the City Manager of four different University communities, and most recently as the City Manager of Denton, Texas. Denton is the home of The ' University of North Texas and Texas Woman's University. Located in the dynamic North Texas Corridor, Denton is an innovative and rapidly growing community of 110,000. Prior to assuming the City Manager's position in Denton in May 2001, Mike was a nine-year City Manager of Bryan, Texas, a 1998 & 1999 All-America City Finalist and the birthplace of Texas A&M University. Before he came to Texas, Mike served as City Manager in Manhattan, Kansas, home of Kansas State University, for five years. He also served as City Manager of Pittsburg, Kansas, home of Pittsburg State University,for 5'/2 years. Mr. Conduff earned his B.S. in civil engineering at the University of New Hampshire, graduating Cum Laude. His M.B.A. is from Pittsburg State University. He is also a charter graduate of the Carver Policy Governance® Academy and serves on the Board of Directors of the International Policy Governance® Association. Mike's clients have included the International City Management Association, The National League of Cities Leadership Training Institute, The National Committee for Planned Giving, The Community Associations Institute, The Republic of the Marshall Islands,and many cities, associations, and other non-profit and for-profit corporations. He is the co-author of The OnTarget Board Member — 8 Indisputable Behaviors, and The Policy Governance® Fieldbook and is a frequent speaker at state and national events. He is also the author of The Half-Naked Fire Ant Buck and Other Stories of the Wild and is working on two additional books, Democracy at the Doorstep — True Stories from the Green Beret of Public Administrators, and The OnTarget CEO — Excellence in House. He has published numerous articles in national publications. Mr. Conduff is a Fellow of the prestigious National Academy of Public Administration, a member of Who's Who Worldwide, and a Paul Harris Fellow in Rotary International. He has been honored with the 2006 TCMA Mentoring Award in memory of Gary Gwyn, the 2004 International Award for Career Development in Memory of L. P. (Perry) Cookingham from ICMA, and the especially meaningful Joy Sansom Mentor Award from the Urban Management Assistants of North Texas for his commitment to helping others achieve their potential. The Center for Digital Government has awarded Mike their coveted"Best of Texas 2004 Visionary Award." A fourth generation Native American,Mike grew up on stories of his Cherokee ancestry, and attributes his love of motivational speaking and telling stories to his grandmothers. A graduate of the 1988 Leadership Kansas Class, Mr. Conduff is active in a number of professional and civic organizations. He serves on the Athletic Council for the University of North Texas. He is a full member and Past President of the Texas City Management Association. He is one of the handful of originally credentialed member of the International City/County Management Association, served on its International Executive Board and currently serves on its Fund for the Profession Foundation Board. He also served six years on the Board of Directors of the Kansas Association of City/County Management, chairing the Ethics Committee and holding all of the statewide offices including President of the Association. He is a Past President of the Kansas Engineering Society; a charter member of the Board of Directors of the Kansas Entrepreneurial Center, located at Kansas State University; and a past member of the Board of Directors of the League of Kansas Municipalities. Mr. Conduff is licensed as a Professional Engineer and a Registered Land Surveyor in the State of Kansas, and served eight years on the Kansas State Board of Technical Professions, twice as Chairman of the Engineering Section and twice as Chairman of the Full Board. Mike practices what he preaches while serving on a number of Boards himself. He says, "In my experience, people who give of their time and energy to serve on a Board or City Council are unbelievably caring individuals doing their absolute best to make a difference. My passion is to provide the leadership and training to give them the tools and insights they need to be successful." www.TheElimGroup.com MEMORANDUM DATE: June 3, 2008 TO: Honorable Mayor and Board of Aldermen/Honorable Board of Trustees FROM: Tom Brymer, Town Manager SUBJECT: Strategic Planning Process The Board of Aldermen is about to begin the first of two phases of strategic planning for the Town of Westlake. The first phase will take place at the end of this month and will entail the Board setting the mission, vision, and values for the Town, both as a community and as a municipal organization. This also will involve identifying key result areas to focus the Town's resources on as we pursue our mission, vision, and values. The attached flow chart gives a good idea of a how a strategically focused governance cycle works in an integrated fashion with all the various components of the cycle. Following this first phase of strategic planning involving setting the direction for the Town as a whole, it is recommended that the Board convene a second phase of strategic planning. This second phase of strategic planning will focus on Westlake Academy, but will take place within the context of the overall direction for the Town set by the Board in its first strategic planning session. Prior to convening this second strategic planning phase focusing on Westlake Academy, it is recommended that work begin on identifying current or future policy issues that need to be addressed by the Board as it sets the strategic direction for the Academy. This could be done by the Board as a whole, or by a subgroup of the Board, working with the Town Manager and Head of School for presentation for discussion at the second phase of strategic planning. Attachment- Strategic Governance Cycle CA w � N 3 3 0 N 2. < } (D i ,�ft < 0 �. CCD CL n cD C N O o3 Oi c) 3 cD � I n m cn � 0 0 > 0 0 0 � n 'O O _ CD O W 3 � � T -Z Q tQ cD cD CQ m m' 03 O CD 3 CL O O CD �.i The Tow • WESTLAKE Westlake Community Vision Westlake is a one- of- a kind community; an oasis with rolling hills, grazing longhorns, and soaring red-tailed hawks, located in the heart of the Fort Worth-Dallas metropolitan area. Inviting neighborhoods and architecturally vibrant corporate campuses find harmony among our meandering roads and trails, lined with native oaks and stone walls. We are leaders. In education we are known for our innovative partnerships between the Town-Owned Charter School and its corporate neighbors. We are environmental stewards — exemplifying the highest standards. Hospitality finds its home in Westlake. As a community, we are fully involved and invested in our rich heritage, dynamic present and exciting, sustainable future. Mission On behalf of the citizens, the mission of the Town of Westlake is to be a one of a kind community that blends our rural atmosphere with our rich culture and urban location. Community Values As a community, Westlake values reflect: • Innovation 1 • A strong knowledge/education base • Being friendly and welcoming • Family focus • Engaged citizens • A unique rural setting emphasizing preservation of our natural beauty • Aesthetic appeal and high development standards Vision Point: Inviting Residential and Corporate Neighborhoods The Town of Westlake enjoys inviting neighborhoods. We are a one-of-a kind community. Westlake is an oasis with rolling hills that blends grazing longhorns and soaring red-tailed hawks with inviting neighborhoods as well as architecturally vibrant corporate campuses that find harmony along our meandering roads and trails, lined with native oaks and stone walls. Key Result Areas supporting this vision point: • On-going comprehensive planning • Sensitivity to neighborhood integrity • Outstanding community appearance • Highest quality development and aesthetic standards • Open space preservation Vision Point: We are Leaders In education we are known for our innovative partnerships between the Town-owned charter school and its corporate neighbors. We are environmental stewards—exemplifying the highest standards. Key Result Areas supporting this vision point: 2 • Premier educational facilities and programs • Producing well educated future leaders and thinkers • Business partnerships with the Town andWestlake Academy • Environmental stewardship initiatives • High quality services delivery coupled with financial stewardship • Infrastructure maintenance and planning Vision Point: Hospitality Finds Its Home in Westlake As a community, we are fully involved and invested in our rich heritage, dynamic present and exciting, sustainable future. Key Result Areas supporting this vision point: • Citizen engagement and communication • Historic Preservation • Tourism development • Arts and culture 3 Westlake Strategic Planning Process 2008 Vision/Values Mission Vision POWs Inviting We Are Hospitality Neighborhoods Leaders Key Result Areas Supporting These Vision Points Are: Comprehensive Premier Education Planning Facilities & Programs Citizen Engagement Neighborhood Well Educated Future Integrity Leaders & Thinkers Citizen Business Partnerships with y Communication Community Westlake Academy Historic Quality Environmental Stewardship Preservation Development High Quality Services Tourism Aesthetic Coupled with Development Standards Financial Stewardship Arts and Open Space infrastructure Maintenance Culture Preservation and Planning Excerpt from the Westlake Academy Charter Westlake Academy e IX. Vision of the School (Scored by Review Committee) A. Describe the long-range vision of the school specifically addressing how that .vision supports student learning of the Texas Essential Knowledge and Skills. Mission Statement Westlake Academy The Westlake Academy will provide a rigorous curriculum that is international in scope with high expectations by sharing the responsibility of educational development between teachers, parents, community, and students. This will be achieved by providing an innovative approach to education that focuses on each student's needs to develop a thirst for knowledge, produce positive esteem, encourage good citizenship and maximize their individual potential. This will prepare students for a rapidly changing environment that is global in scope. The vision of Westlake Academy is to create an international, interactive learning community composed of families and engaged learners linked with a high quality instructional team. The school will provide a rigorous curriculum and guidance to challenge all students to reach their greatest academic achievement. Westlake Academy will continually reach out to families whose students' educational needs are not being met in more traditional settings. The school' will provide a supportive environment for young people who possess the desire to reach their fullest potential through a more formalized, international study based on a rigorous curriculum. With the incorporation of the Texas Essential Knowledge and Skills into every aspect of the core curriculum, each student will be supported by the curriculum in all areas of instruction. Mission and strategy The International Baccalaureate (IB) is more than its three educational programmes. At our heart we are motivated by a mission to create a better world through education. We value our hard-earned reputation for quality, for high standards and for pedagogical leadership. We achieve our goals by working with partners and by actively involving our stakeholders, particularly teachers. ! r ! a We promote intercultural understanding and respect, not as an alternative to a sense of cultural and national identity, but as an essential part of life in the 21 st century. All of this is captured in our mission statement. The International Baccalaureate aims to develop inquiring, knowledgeable and caring young people who help to create a better and more peaceful world through intercultural understanding and respect. To this end the organization works with schools, governments and international organizations to develop challenging programmes of international education and rigorous assessment. These programmes encourage students across the world to become active, compassionate and lifelong learners who understand that other people,with their differences, can also be right. Strategy Putting our mission into practice for more students is the goal of our strategic plan. Adopted in April 2004, the plan addresses the key issue of how we will plan and manage our rapid growth over the next five to ten years. We implement our strategic plan through an annual process of business planning that requires each department/office to develop goals and financial forecasts for the next three years. While we are a non-profit foundation, our stakeholders expect the same quality and discipline of management and planning that would be found in any other international organization. We support this work with a small strategic planning department. Strategic plan The International Baccalaureate (IB) adopted its current strategic plan(635 kb, PDF) in April 2004 after an important and substantial process of consultation and debate within the organization. It addresses the key issue facing us in the early 21 st century—the planned growth of the IB itself. The plan is subject to regular review. Following a Council of Foundation retreat in July 2006, the 'access' (240 kb, PDF) theme of the strategic plan was developed with our latest thinking. During 2007, both the 'quality' and 'infrastructure' themes will also be updated. Why planned growth? Growth is nothing new for the IB. Since 1968, we have grown rapidly, and for the past five years, student numbers in the three programmes have grown by nearly 20% each year. However, it is the rate and direction of this growth that presents us with our greatest challenges. In particular, our analysis shows that planning growth is necessary to address two key questions. • How can we ensure that the growth of the IB benefits schools and students worldwide, not just an economic elite who can most easily afford high-quality programmes? • How can we sustain double-digit growth rates while maintaining the IB's reputation for quality and innovation? In other words, it is the "planned" in "planned growth" that is the strategic issue for the IB. Three major themes These questions help to identify the three major themes of our strategic plan: Quality Continuously improving the quality of our three programmes Access Enabling more students to experience and benefit from an IB education, regardless of personal circumstances Infrastructure Building a highly effective and efficient infrastructure so that we can provide excellent service to students and schools The plan sets out 28 actions that identify the major developments we will need to implement over the next five 10 ten years. The delivery of these themes and actions is managed through the annual process of business planning. Retrieved from: http://www.ibo.org/mission/and http://www.ibo.org/mission/strategy/index.cfm on September 5, 2008 see !NATIONAL CHARTER SCHOOLS INSTITUTE � www.NationalCharterSchools.or� (989)774-2999 • THE FIVE DYSFUNCTIONS OF CHARTER SCHOOL BOARDS by Brian L. Carpenter CEO National Charter Schools Institute Overview Bestselling author and executive business con- seen boards that were flat-out incompetent. In an- sultant Patrick Lencioni is on to something. In his other organization, failure by the board to provide book, The Five Dysfunctions of a Team, he explains proper financial oversight resulted in an embezzle- why business teams of all kinds fail. More impor- ment case involving the executive director and the tantly, he explains what they need to do to succeed. FBI. Extreme, yes, but it illustrates how serious Though I haven't yet met Lencioni, I credit him problems can arise when boards don't function with the idea for the title of this essay. properly. The idea of writing something about school Years of such observations have led me to con- board dysfunctions has been percolating in my mind clude that boards have common dysfunctions. The for some time. As a superintendent of schools in the purpose of this paper is to improve the performance private sector for twelve years and as a charter of charter schools by helping board members under- school board member the past several years, I have stand what some of those common dysfunctions are often had a front row seat to the dysfunctional and how to avoid or remedy them. things school boards do. Not that board dysfunction I'd love to claim originality of thought here, but is limited to schools: I have also witnessed dysfunc- much of what I will say has been written or said by tional behavior as a member of other governing others—often better than I could write or say it. boards. All told, my hands-on experience—or Nevertheless, my desire is for this brief piece to ig- should I say, my seats-on experience—with boards nite passion in charter school board members to presently totals something in excess of twenty years. commit themselves to making their boards into During these years, I've sat through lengthy models worthy of imitation. For further study, I board discussions about such important things as the strongly recommend reading the works of Patrick color of trim for new offices, how teachers should Lencioni and John Carver, both of whom are listed approach the controversial issue of Santa Claus, and in the references section of this paper. whether a particular student deserved a detention. Finally, I'd like to dedicate this paper to my I've seen shouting matches and power plays that friend and mentor, Dr. Bruce Lockerbie. Bruce is would make Machiavelli blush (and here I should chairman and founder of Paideia, an agency that note that names in this paper have been changed to works with schools, churches and nonprofit organi- protect the guilty). One board on which I served as zations that want to improve their leadership. Thank superintendent was so divided that one-half of it you, Bruce, for your years of wise counsel and for threatened to sue the other half. And if such provin- being the first to provoke serious thought in me on cial behavior weren't depressing enough, I've also the subject of effective school board leadership. ©2007 National Charter Schools Institute 1 Rev March 07 *9 o 0 A *NATIONAL CHARTER SCHOOLS INSTITUTE � •� www.NationalCharterSchools.or (989)774-2999 i The Thing Charter School Next, depending on the order of Boards Have In Common the agenda, the board will discuss old business, new business, and One of my favorite quotes about other business (as opposed to just board dysfunction comes from the business).It will spend several hours late business genius, Peter Drucker. rehashing and reviewing decisions In one of his many outstanding that already have been made by the "there is one thing books on leadership, Management: school. leader. It may discuss adopt- that all boards have in Tasks, Responsibilities, Practices, ing poicies about which it generally common ... The do he asserted that "there is one thing has insufficient training and knowl- y that all boards have in common ... edge (e.g., does your school have a not function." They do not function." (1974, p. good AHERA policy?). The board (original emphasis) 628)(original emphasis). will listen attentively to administra- As a charter school board mem- tive presentations about field trips, ber that can be a hard pill to swal- essay winners or other feel-good Peter Drucker low. After all, you have the best of information. Finally, as the meeting intentions, you volunteer your time winds toward the end, no issue that and skills,and you are probably suc- any single board member wants to cessful in your other roles in life. raise is considered inappropriate or You may even serve on several out-of-bounds. At some point, usu- other boards. But the assertion that ally near exhaustion, the board will all boards do not function, coming adjourn, only to repeat the process as it does from the luminous next month, and the next month,and Drucker, suggests that we ought to so on. ask ourselves what would make him Some boards meet between meet- say that. ings through committees. Often, One need not consult the Oracle these committees do little more than of Delphi to understand why— reach a foregone conclusion or serve especially anyone who has served as a smokescreen or end-run tactic. on a charter school (or other) board What is the result of all this for any length of time. The dysfunc- largely pointless activity? Charter tion is obvious. Think about it: What schools which fail to perform the does the typical charter school board very thing for which they were cre- meeting look like? ated: student achievement. Some First, it generally meets monthly, charters aren't even rivaling the which is way too often. When achievement of their nearby local enough board members are present districts. for a quorum—or as I like to say, a With whom does the ultimate quarrel—the meeting is called to responsibility for this failure lie? order. The chair then asks if every- The legal conclusion is inescapable: one had a chance to review the min- Regardless of whether the school is utes and the financial statements. self-managed or the management is Most board members will then pe- contracted through a service pro- ruse them for the first time. A reso- vider, the final responsibility rests lution to adopt them will be with the board of directors. passed though many board mem- This being the case, it's time to bers don't know how to read and consider how to avoid the five dys- interpret financial statements. functions of charter school boards. ©2007 National Charter Schools Institute 2 Rev March 07 !NATIONAL CHARTER SCHOOLS INSTITUTE www.NationalCharterSchools.org (989)7742999 • Dysfunction #1 wants; the management determines Managing vs. Governing how to achieve it (within board- defined limits). The difference between manag- Whenever a board performs the ing and governing a school is like roles, tasks or responsibilities of the difference between coaching an management, it becomes dysfunc- NFL football team and owning one. tional. Although it's not a perfect anal- Consider the following example ogy, in football, a coach is hired by from a conference I attended a few the owners to run the team—and years ago. A board member in the he's held accountable on the basis of audience boasted to the rest of the the team's performance. There is no group (mostly other board mem- such thing as a successful coach bers) that individual board members without a winning team. in his school conducted teacher With perhaps a notable exception evaluations. That's as dysfunctional or two, the owners of the team do as it is misguided. School board not tell the coach which plays to call members aren't usually qualified to or otherwise how to do his job. evaluate teachers anymore than charter school boards In charter schools,the board gov- Wendy's board members are quali- erns for an owner. But who is the fied to evaluate restaurant employ- govern schools in the owner? Obviously, the board does- ees. sense of a trust. This is n't own the school as with a football Even if occasional charter school team owner. And it isn't the man- board members are qualified to do why board members agement company, even if it owns so, performing the role of manage- are sometimes referred the building. It is the public who ment puts the board at risk of alien- to as trustees—people ultimately owns charter schools. ating the school faculty and staff, as Thus, charter school boards gov- well as potentially inviting the en- who control something ern schools in the sense of a trust. trance of a union (see Carpenter, on behalf of the owner. This is why board members are 2006)—an occurrence the board will Charter school trustees sometimes referred to as trustees— likely regret. people who control something on Instead of evaluating, hiring and have the authority to behalf of the owner. Charter school firing personnel, choosing curricu- govern the school on trustees have the authority to govern lum, selecting test instruments and the school on behalf of the public. reviewing routine student discipline behalf of the public." The management of a school matters—all of which are manage- functions similar to a football coach- ment functions the board should ing team. Management in a school prescribe the outcomes it wishes to has direct supervision of the teach- achieve, establish (through policies) ers, staff and students. Management the boundaries in which the out- should possess the expertise neces- comes are to occur and then hold the sary to run the school on a day-to- management accountable by evalu- day basis. The head administrator ating those outcomes. should be evaluated by the board as For boards that need further help to how well he or she is achieving defining governance responsibilities, the objectives of the board,just as a I recommend the book,Boards That football coach is evaluated accord- Make a Difference (Carver,2006). It ing to the objectives of the owner.In unpacks the mystery of how to essence, the board says what it cease managing and start governing. ©2007 National Charter Schools Institute 3 Rev March 07 *NATIONAL CHARTER SCHOOLS INSTITUTE www.NationalCharterschools.or� (989)7742999 • 0* - • Dysfunction #2 rectives to school leaders, form cliques, interfere with management, Misappropriating raise issues at the board level that Board Authority arise from personal agendas, and/or Too often, charter school board pose as the spokesperson for the members mistakenly believe that the staff or parents or some segment thereof. "Devising proper lines authority which the board possesses In reality, the only time a board of authority and re- to govern the school is possessed by member possesses authority is when each board member individually. It he or she is sitting in a board meet- far that individual is not. Some board members go so ing, as part of the whole board, t- board members ad- far as to behave as if what they want when he or she has been duly ap- accomplished individually is the pointed to act on behalf of the board here to them by cast- same as what the board wants ac- p ing them as board pol- complished. A friend who is an au- (such as, being part of a committee —something that should be used icy can go a long way thorizer told me of a comical exam- sparingly, if at all, since board com- ple of this:A board member ordered mittees diminish the board's ability toward eliminating the school leader to install a bicycle to hold the CEO accountable) "loose cannon" rack because she wanted her child to (Carver,2006). problems." ride a bike to school. In contrast to individuals running In schools in which I've served, around the school imposing their individual board members have: own agendas, a functional board • Telephoned me at home speaks with one voice. It does this (sometimes on weekends)to only when it passes a resolution dispute student discipline (regardless of the actual vote count). matters involving children of Individual board member opin- their friends ions which may be stated in board • Spent or encumbered school meetings are not binding on the funds on pet projects without school's administration. How could board authorization they be? No matter how talented, • Directed traffic and staff at there is no superintendent that can school drop-off/pick-up time simultaneously satisfy multiple indi- without being asked to do so viduals with conflicting opinions. • Authorized fundraising Devising proper lines of author- • Polled teachers for opinions ity and requiring that individual about the strategic direction board members adhere to them by of the school casting them as board policy can go a long way toward eliminating Quite thankfully, renegades such "loose cannon"problems.Also,new as these are usually just one person board members should receive an on a board. Even so, one board orientation which explains the gov- member who thinks he or she pos- erring philosophy of the board. sess the authority of the board— Lastly, waste no time as a board especially if he or she happens to be in removing an individual board the chair-can interfere with the member who consistently refuses to effective governing of the entire abide by the policies of the board to board(Kissman,2006). act and speak as one. Schools run Such individuals often give di- better without such members. ©2007 National Charter Schools Institute 4 Rev March 07 *NATIONAL CHARTER SCHOOLS INSTITUTE * * www.NationalCha rte rSchools.or>? (989)774-2999 i* Dysfunction #3 school. The CEO should then be delegated with the necessary author- Creating "Revolving Door ity to achieve them. True account- Accountability" ability comes from assessing the school's performance against the Prior to selecting a CEO, the pre-defined outcomes. board should decide what is to be Besides student achievement, accomplished by the school. Board which is clearly the primary deliver- expert John Carver refers to these able for any charter school leader, accomplishments as "Ends," de- the board should also ensure that "A good starting point fined as those things that are to be school finances are being appropri- accomplished, for whom and at ately handled. Every board should for determining ends is what cost. (Carver,2006). receive regular financial statements for every board mem- Only once the board knows what including balance sheet, statements ber to read the contract it wants, is it in a position to search of cash flow, and income and ex- for someone whom it may hold ac- pense. that exists between the countable to achieve it. It is also advisable for the board board and the organi- A good starting point for deter- to hire its own auditor to periodi- mining ends is for every board cally review these statements and to nation that approves it member to read the contract that conduct an annual audit. to operate and receive exists between the board and the If you think this is too expensive, state funds (i.e., its au- organization that approves it to op- I can assure you it is a bargain com- erate and receive state funds (i.e., its pared to dealing with the occasional thorizer or sponsor). authorizer or sponsor). These con- crooked CEO who steals money, as These contractually tractually agreed-upon outcomes happened in an organization on agreed-upon outcomes should be the minimal basis of CEO whose board I once served. Few of accountability. us on the board expressed concern should be the minimal What is more often the practice, about not receiving good financial basis of CEO account- however, is that a board hires a reporting until it was too late. CEO without any forethought as to And it's not just embezzlement ability" how he or she is to be held account- against which the board should able. As my friend Bruce Lockerbie guard. The board also needs to pro- says, oftentimes the first job evalua- tect the school from incompetent tion the CEO gets in such cases is management which can cause a written on a pink-slip. The board school to close due to insolvency. then repeats the process with its next For a sobering example of this, read CEO, thereby creating a "revolving the California Charter Academy door" to the school leader's office. story in chapter four of Hopes, This is board caprice, not account- Fears, &Reality(Lake,Hill,2005). ability, and it is highly detrimental Finally, if you have a talented to building a good school. CEO who is accomplishing what the Beyond those outcomes which board has defined, show your appre- the board is contractually obligated ciation to him or her. You'll be do- for the school to achieve (the very ing your school a favor since it is essence of the charter school idea), well-known that talented school the board should develop additional leaders are in short supply. Keep the policy objectives that are consistent door to the CEO's office voluntarily with the mission and vision of the locked—from the inside. ©2007 National Charter Schools Institute 5 Rev March 07 *NATIONAL CHARTER SCHOOLS INSTITUTE www.NationalCharterSchools.org (989)774-2999 i Dysfunction #4 . Restroom usage schedules Wasting Time • Field trip details on Administrivia For boards seeking not to waste time on administrivia, I recommend I don't recall where I first heard three things. the word "administrivia." Someone First, establish a baseline for coined it to refer to the thousand- your board by having someone keep and-one details involved in running a minute-by-minute running sum- a school. I like the word because it mary of how the board spends its "kids in your school captures so well, the tendency of time during two or three regular school boards to spend unbelievable meetings. Put the findings into one will live with the edu- amounts of time on insignificant of two columns. One column is for cation they're getting things, or at least things that are far minutes spent on student achieve- from you for the rest less significant than student achieve- ment. The other column is for eve- ment. rything else. Compare the two col- of their lives. Isn't it A former superintendent friend umns. If your board is spending less worth at least half once told me that in his observation, than half its time on student of the board's school boards spend 75 percent of achievement, the board is wasting their time talking about things that time on administrivia. (Obviously, regular meeting time really don't matter. By the time there are other important topics that to discuss how well they're two hours into this bog, boards need to discuss, but they board members are too tired to de- shouldn't consume half of a typical the school is provid- vote even 15 minutes to talk about meeting.) ing that education?" improving student performance. Second, read Patrick Lencioni's This same friend says that if charter book, Death by Meeting. It contains schools invert this model and spend some excellent lessons about the 75 percent of every meeting wres- structure of meetings. Although the tling with the difficult issues of stu- book is geared toward management dent performance, charter schools meetings (not to be confused with would become the most successful board governance meetings), some schools in the country. of Lencioni's ideas and insights are What issues do boards waste applicable to charter school boards. their time on, if not discussing stu- Finally, exercise the discipline of dent performance? Well, the sky taking the long view of things. Ask really is the limit. Here's a sample yourselves as a board if"xyz" issue of discussions I've endured: is going to be of any importance in • Paint colors on exterior five years. If it isn't, delegate it to classroom doors the CEO and move on. • Filling secretarial positions Student achievement will always • Content on classroom bulle- pass this litmus test because kids in tin boards your school will live with the educa- • Cheerleader skirt length tion they're getting from you for the • Selecting a contractor to rest of their lives. Isn't it worth at repaint an exterior sign least half of the board's regular • Extra-curricular activities meeting time to discuss how well • Recess protocol the school is providing that educa- • Tennis court resurfacing tion? ©2007 National Charter Schools Institute 6 Rev March 07 *NATIONAL CHARTER SCHOOLS INSTITUTE www.NationalCha rte rSchools.orj� (989)774-2999 • �! Dysfunction #5 The functional board recognizes that it needs to develop itself. To do Failing to Develop so, it devotes time in its board meet- Its Own Capacity ings and resources for that purpose. It may watch an informative pro- There was a time when a school gram, discuss a book or invite an board could do its job with little or outside expert to present informa- no expertise required. A hundred tion. Board members should also years ago, if you could read and ci- seek to educate themselves outside pher,you probably would have been board meetings by attending an oc- "A hundred years ago, considered well-qualified to help casional seminar and by staying in- if you could read and govern a school. formed of broader charter school Not anymore. trends. cipher, you probably These days, schools are complex This doesn't mean that every would have been con- organizations. The list of things charter school board member should about which charter school board possess the same depth of knowl- sidered well-qualified members should have a working edge as the school leader. That to help govern a school. knowledge include, but are not lim- would be absurd. Not anymore." ited to,the following: It does mean, however, that board members should recognize • No Child Left Behind Act that they cannot govern properly (NCLB) without a certain level of under- • Individual with Disabilities standing. It is completely legitimate Education Act(IDEA) for boards to invest time and reason- • Sizeable amounts of state-level able amounts of school funds neces- public school code including sary to acquire it. your state's charter school re- On the charter school board on quirements which I currently serve, the board • Financial reporting devoted time for several months to • Contractual agreements discuss a book on governance which • Funding,building,and mainte- everyone agreed to read. We also nance of school buildings regularly invite our school leader to • Employment law educate us on various issues involy- • Management companies ing student achievement. • Student achievement and per- If you're reading this as a charter formance measures school board member, that's a good • Good governance indicator you take your role seri- • Policy development ously. But if others on your board • Negotiating skills aren't developing their knowledge • Union tactics through further training, discussions • The politics of school choice and reading, their negligence will • Marketing impede effective governance. The above sample of items illus- The references at the end of this trates just how complex the charter paper are a good place to start. Pick school sector is. Regardless, board a resource and resolve as a board to members have the responsibility to begin spending a few minutes each know this stuff.What to do? meeting discussing it. This action alone would improve most boards. 0 2007 National Charter Schools Institute 7 Rev March 07 *NATIONAL CHARTER SCHOOLS INSTITUTE www.NationalCharterSchools.org (989)774-2999 !0 References & Recommended Resources Carpenter, B. L. (2006). Charter school board university:An introductory course to effective charter school board governance (1st ed.). Mount Pleasant, MI:National Charter Schools Institute. Carver, J. (2002).John Carver on board leadership: Selected writings from the creator of the world's most provocative and systematic governance model. San Francisco, Calif.: Jossey-Bass, A Wiley Co. Carver, J. (2006). Boards that make a difference:A new design for leadership in nonprofit and public organi- zations(3rd ed.). San Francisco, CA: Jossey-Bass A Wiley Imprint. Chait, R. P., Ryan, W. P., &Taylor,B. E. (2004). Governance as leadership: Reframing the work of nonprofit boards: John Wiley & Sons. Charan, R. (2005).Boards that deliver:Advancing corporate governance from compliance to competitive ad- vantage (1st ed.). San Francisco, CA: Jossey-Bass. Drucker,P. F. (1974).Management: Tasks, responsibilities,practices([Ist ed.).New York,: Harper &Row. Kissman, K. (2006). Taming the troublesome board member.Washington,DC: BoardSource. Lake,R. J., &Hill,P. T. (2005). Hope, fears &reality: A balanced look at American charter schools in 2005 [Electronic Version], 96. Retrieved November 2005 from http://www.crpe.org/ncsrp/ pubs/2005 HopesFears.shtml. Lencioni,P. (2002). The five dysfunctions of a team:A leadership fable (1st ed.). San Francisco: Jossey-Bass. From the CEO of the National Charter Schools Institute Affiliated with Central Michigan University in Mount Pleasant, Michigan since its in- ception in 1995,the National Charter Schools Institute is committed to advancing quality in the charter school sector through publications, conference presentations and tailored techni- cal assistance to charter schools. % If you found this publication meaningful, I invite you to visit our Web site at www.NationalCharterSehools.org where you will find similar monographs on a variety of Brian L.Carpenter topics including board governance, administrative leadership, evaluating research and more—all fi°ee of charge. As long as proper attribution is given, you're welcome to print and distribute as many copies of these as you like. If you would like to discuss the prospect of board governance training or other kinds of technical assistance,please e-mail me at bcarpenternnationalcharterscliools.org, or call the Institute at(989)774-2999(Monday through Friday, 8:00 am to 5:00 pm,EST). Finally, any feedback you might wish to suggest to improve this, or any of our publica- tions,would be valued. ©2007 National Charter Schools Institute 8 Rev March 07 The Seven Absolutely Universal, Non-Negotiable, Unchanging Principles of Good Charter School Governance by Brian L. Carpenter CEO National Charter Schools Institute Introduction As a consultant, I sat silently for most of the board charter school board would hire a CEO who regarded meeting, observing and taking notes. As the meeting his or her own professional development as optional. neared the end of its third hour, I slipped my hand into Yet how many charter school board members across the air. The board chair nodded in my direction. In the the country have read any books or articles on govern- best professional voice I could muster considering the ance,attended any governance training seminars,or set late hour,I asked, "Is the length of this meeting normal aside any time in their own board meetings expressly for you?" Most of the board nodded in exhausted for developing their own governance capacity? agreement. Apparently,this was for them,just another The result is observable in many places:charter school night spent arguing, alternating between approving and boards that interfere with management, waste taxpayer suggesting management actions, and discussing minu- dollars, and fail to ensure that their schools educate chil- tiae. Less than a tenth of their time that evening was dren to worldclass standards. The purpose of this mono- devoted to discussing the thing that actually matters for graph is to articulate a framework for charter school gov- charter schools: student performance. emance that will reverse this unacceptable trend. But the low point of the board's dysfunction was its - failure to connect its poor governance with the lousy Note to my readers: Ted Kolderie, one of the chartering movement's primogenitors, proposes that we can help peo- performance of the school. (Notice that we don't ple understand the unique opportunities offered by charter blame lousy school performance on the students.) schools by using the word "charter" as a verb rather than as I'd like to tell you that the example is an anomaly, a noun or adjective. but I can affirm, after more than 20 years of service on Why parse words in this way? According to the 38th Annual boards—as CEO on some and trustee on others—the Phi Delta Kappan/Gallup Poll, half or more of the public meeting I've described is more the rule than the excep- thinks that charter schools are free to teach religion, charge tuition, and selectively admit students(Hess,2006). tion. This observation is certainly not limited to char- . tered schools,* but it seems to me that with the charge Modifying the word "charter" to its past tense verb form should help us dispel these false notions. Thus; throughout of preparing children for their future, we could be do- this monograph, I alternate between the words "charter ing much more to govern well. school" and "chartered school" as a way of working the verb We need to build capacity. Let me illustrate by ask- form into our collective vocabulary. ing this question. Why is it that we expect our author- For further reading on the charter misunderstanding,see: izers and sponsors to be knowledgeable, our charter school leaders to be .innovative, and our teachers Hess, F. M. (2006). Charter school confusion: What they know just ain't so. Retrieved 3/12/07,from wwvv.aeriorgl highly qualified,but when it comes to boards and gov- publications/pubID:2-19s3 filter all/p ,b detail:asiD emance, very little, if anything at all, is required? No ©2007 National Charter Schools Institute 1 March 2007 I Principle 1: Govern as second-grade parents to get their Stewards Rather than as children promoted into one of the preferred two sections. Yet the Stakeholders school leader has just renewed the The starting point for under- disliked teacher's contract for the standing effective governance is to fourth consecutive year. At this, Throughout this realize that charter school the second- and third-grade parents ' monograph boards—like most boards—govern collaborate and successfully get , wherever you see on behalf of someone else. In other one of their own appointed to the the books and words, boards don't usually exist board. The parent board member coffee symbol,I recommend to represent their own interests, but arrives for her first board meeting, further resources, the interests of an owner. In its politely announcing that she is beginning with these two: simplest terms, this is the concept there to represent the parents of the of stewardship (Carver, 2006). second and third grades. Carver, J. (2006).Boards Thus, the principle of stewardship Assuming the presence of lead- that make a difference: a demands that a charter school ership in the board, a board that new design for leadership in board grapple with two questions: fails to refute such an assertion is a nonprofit and public organi- "Who are the school's owners?" board that does not yet understand zations(3rd ed.). San Fran- and"What do the owners expect of the first tenet of good governance: cisco, CA: Jossey-Bass A their school?" The board governs on behalf of the Wiley Imprint. To contemplate these two ques- owners. Although the ownership tions, let's examine the distinction group of SCS includes the parents Carver, J. (2002).John between the owners of a charter of second- and third-grade stu- Carver on board leader- school and its stakeholders, since dents, it is actually much broader. ship: Selected writings from it's commonplace for boards to act How broad? Well, chartered schools the creator of the world's as though they exist to represent are public schools without usual dis- most provocative and sys- the interests of the latter (Carver, trict boundaries, so I make the case tematic governance model. 2001). As a group, charter school to boards that they exist to serve the San Francisco, Calif: stakeholders include, but are not interests of the public of the entire Jossey-Bass,A Wiley Co. limited to parents, students, teach- state in which the school operates. ers, management, vendors, and the Thus, the new board member, immediate community. And while along with every other SCS board stakeholder interests and concerns member, needs to understand that are important, they are not neces- the board's first obligation is to the sarily the same as the owners' in- public—not a particular group of terests. stakeholders. This clarity is impor- Let's consider a realistic exam- tant because in some instances, a ple. Successville Charter School board may actually find that what has three sections of third grade. the public wants is in conflict with Teachers liked by parents teach what particular stakeholders want two of the sections. But many (think lawsuits against the Pledge third-grade parents don't like the of Allegiance). teacher of the third section. Parent When a charter school board grapevines at schools are more properly views its role as one of proficient than my teenage daugh- ter's stewardship in which the very rea- ter's text messaging abilities, and son for its existence is to represent the grapevine at SCS is no excep- the owners, it begins to lay the tion. The third-grade parents warn foundation for true governance. ©2007 National Charter Schools Institute 2 March 2007 I Principle 2: Establish basic idea behind value-added as- sessment) at a cost not to exceed Organizational Purpose the school's annual state revenues. Once a charter school board Everything else, such as peda- realizes that it exists to represent gogical methods, curriculum, the interests of its public owners, amount of homework, teachers, its next primary responsibility is to length of school day or year, gradua- establish the purposes for which tion requirements, assessment, class- the school exists. This might sound room ratio, accreditation, etc., is a easy. You say, "Oh, we've done means to an end. Someone will that. The purpose of our school is to then ask, "Who decides the means, offer a college prep program," or the board or the school leader?" "The mission of our academy is to Actually, a means policy is not de- provide at-risk kids with marketable fined by who decides it (Carver, vocational skills." Would you be 2006). The short answer is the surprised if I said that your school board adopts means policies that doesn't exist for either of those pur- pertain only to matters of prudence poses,or anything like them? and ethics. (See Principle 4 for a John Carver has written exten- more thorough answer to this im- For boards that sively about organizational pur- portant question.) are interested in poses which he calls ends. In his At first blush, it may seem to implementing model, Policy Governance, ends some that I'm merely quibbling Policy Govern- policies "address a threefold con- over semantics. Far from it. The ance (not to be confused cept: your organization's results, ambiguity arising from the board's with merely adhering to the recipients, and cost of re- failure to clearly define the school's principles stated in this sults" (2006, p. 152). While it is ends will result in misdirected re- monograph), the following not the purpose of this monograph sources, lack of board and staff fo- resource is invaluable: to explain everything there is to cus, and endless turf battles over the know about defining ends, I want purpose of the school. Perhaps the Carver, J., & Carver,M. M. to emphasize a key concept with most onerous consequence though, (2006). Reinventing your respect to the governance principle is that the absence of defined pur- board: a step-by-step guide of establishing a charter school's poses will leave the board with few to implementing policy gov- purpose. Most charter schools de- indicators as to how to evaluate the ernance (Rev. ed.). San Fran- fine their purpose as existing to do performance of the school. cisco, CA: John Wiley& something (for example, to teach A charter school doesn't exist Sons, Inc. impoverished children living in to teach, it exists that students de- urban areas). In the two examples I rive some benefit or result: ends. gave above, you'll notice the As matter of good governance, the words "to offer" and "to provide." board's role is to establish those Carver's approach does not define primary ends. such statements as ends at all, but rather, as means (Carver, 2006). A Principle 3: Exercise genuine end for a charter school Fiduciary Responsibility operating in an impoverished ur- ban area might be that all students A basic principle of charter enrolled gain at least a year's school governance is to safeguard worth of growth as a result of a the school from harm. The board year's worth of instruction (the accomplishes this as it exercises ©2007 National Charter Schools Institute 3 March 2007 fiduciary responsibility (Chait, federal school code (and nonprofit Ryan & Taylor, 2005). For pur- law in certain states). poses of simplicity, I propose that The board's governance role is charter school boards think of this to exercise fiduciary responsibility responsibility as falling into one of in adopting sound policy,followed two broad categories. The board by compliance monitoring—one of has a fiduciary responsibility to the most critical governance roles safeguard: rarely practiced by boards. To see how this works, let's turn • every stakeholder's right to physi- back to our two examples, bullying cal and emotional safety in the and AHERA. In Policy Governance, school,and the board might adopt a means pol- I recommend the . the school's finances and property. icy that says something like, "The book, Governance school leader shall not cause or al- as Leadership, as But how can a board do this? low any condition in the school that a good primer for After all, for example, board mem- is illegal or unsafe" (Carver, 2006). boards that need to think bers can't possibly spend every (Notice how the policy is a matter of about their purpose. day at the school monitoring class- prudence and ethics.) rooms,playgrounds, and restrooms How would the board monitor Chait,R.P.,Ryan, W. P., & to prevent bullying (and even if compliance with that policy? Taylor,B. E. (2005). they can, they shouldn't!). But (After all, it might not reasonably Governance as leadership: don't mistake your inability to be at know that such things as anti- Refraining the work of the school in person as a suitable bullying statutes or AHERA exist.) nonprofit boards. defense if someone sues your board Quite easily, actually. At intervals John Wiley& Sons. for failing to prevent bullying from prescribed by the board, the board occurring.The same could be said of simply directs the school leader to privacy rights, sexual harassment, report (in writing) compliance or discrimination,and so on. noncompliance with the policy, And then what about safeguard- along with a rationale for his or her ing property and finances? The determination. sheaves of regulations generated "But," you say, "what if the by government agencies these days leader misleads the board, or is are enough to swamp a dingy. uninformed himself or herself?" How can a board member, for ex- Couldn't we still be fined or sued? ample, be expected to know the Yes. No model of governance can requirements for schools under the prevent human error or deception. Asbestos Hazard Emergency Re- But if I had to face a court or a sponse Act (AHERA)? Yet non- government agency, I'd rather See the details on EPA story compliance can get a school in big have as a defensible argument that by pointing your browser to: trouble. Just ask the Vermont Cen- (1) the board had a policy intended www.epa.aov/region]/ ter for the Deaf and Hard of Hear- to safeguard the school, and that pr/2001/mar/010320.1itm1 ing. In 2001, the EPA fined it (2) the board had a monitoring $20,000 for AHERA violations. schedule in place that it was fol- Thankfully, the principles of lowing. This at least, shows that good governance provide a way you attempted to exercise proper for the board to exercise its fiduci- fiduciary responsibility. Even so, ary responsibilities without becom- you may lose, but that's a lot better ing expert in volumes of state and than defending yourself by saying, ©2007 National Charter Schools Institute 4 March 2007 i I "We didn't know," or "We had a • The board must establish a single policy, but we never checked to en- point of accountability for the sure management complied with it." school's performance Remember, too, that the board Proper delegation does not can, and sometimes should, take steps to have an outside expert de- mean that the board is reduced to termine whether the school is in being a cheerleading squad for the compliance with some of the staff. It does mean, however, that board's policies. in the examples Where management decisions are provided above, the board could concerned, the board's role is to pay its attorney at some interval to limit those decisions only through conduct a legal audit to report policies of prudence and ethics whether the school is in compli- (see Principles 2 and 3, above). ance with all pertinent laws. Let's take this straight to where (Concerning finances, boards hire most charter school boards live by independent auditors in the same listing a few things that the board spirit and for the same reason.) should properly delegate to the Admittedly, adopting policies school leader: and monitoring compliance with . Annual calendar them is not as exhilarating as say, . Teacher-to-student classroom ratio debating classroom paint colors, . Hiring and discharge authority but exercising fiduciary responsi- for all school faculty and staff bility is an inescapable principle of • Curriculum and assessment good governance. I'm continuously . Extracurricular activities astounded by the number of boards I • Professional development encounter that don't practice it. • Spending authority within approved budget and policy Principle 4: Delegate • Disciplinary matters Authority and • Pedagogical methods • Decision-making authority in Ensure Accountability response to parent complaints In order to accomplish the pur- Many boards fail to delegate au- poses of a chartered school, the thority to their school leader on these board must delegate some of its issues simply because they want to authority. This process begins decide the matters for themselves. when the board selects a school (We do live in a nation, after all, leader,whether this role is fulfilled where self-determination is one of by a management provider or our hallmarks.) There's a big gov- through the traditional approach of emance problem, however, with the hiring a principal or CEO. There board failing to delegate authority are two basic reasons why it is for these decisions (apart from the necessary for the board to delegate likelihood of being unable to sustain some of its authority to a school school excellence in the face of ex- leader: cessive turnover in the school leader's position): Whoever makes • Boards don't generally possess the the decision.is responsible for the qualifications to manage schools results. 2007 National Charter Schools Institute 5 March 2007 For example, a board that makes The principle of speaking and faculty hiring and discharge deci- acting as one, while largely self- sions is responsible for faculty per- explanatory, does not mean that formance. Thus, if a particular every board member is required to teacher fails to deliver the prescribed agree with every other board mem- ends, the board is acting without in- ber 100 percent of the time. In tegrity if it holds the school leader fact, I'd really wonder whether a accountable. board was functioning effectively Having delegated authority for if everyone got together and sim- the management of the school, the ply nodded in agreement with board then has the obligation of.en- whatever other board members suring that the school leader is held happened to be saying. What it One of my accountable for the school's per- does mean,however,is that once the favorite thinkers formance. In part, this is accom- board has spoken, either through on the topic of plished by establishing policies of eth- majority approval of written policy organizational ics and prudence that convey the or adopted resolution, all board performance is board's values throughout the school, members are obligated to support it. Jim Collins.Many people then monitoring compliance(see Prin- The underlying principle here is have read his bestseller, ciple 3). The other piece of the ac- to recognize that individual board Good to Great: Why Some countability puzzle is accomplished members, contrary to popular prac- Companies Make the Leap when the board has established the tice, do not possess any authority and Others Don't. basic purposes (ends) of the school of the board as individuals—a sim- In a companion piece that and identified some key indicators of ple fact sometimes found right in should be mandatory read- success (Collins, 2005). In doing the school's bylaws. ing for charter school boards these things, it is well positioned to In practice, the reason for this and CEOs, Collins adapts ensure school accountability by governance principle is simple: it his principles to the non- evaluating the CEO's performance. is impossible for any school CEO profit sector. It is splendidly to follow the suggestions, directions, applicable to charter schools Principle 5: Speak and orders, or demands of nine individu- als(or however many comprise your Act as One board). The board should state its Collins, J. (2005). Good to expectations through written policies I can think of few things more or resolutions and expect the CEO to great and the social sectors: damaging to a chartered school than A monograph to accompany g g adhere to them. when board members transgress the Are members of your board hav- Good to Great: Jim Collins. g overnance principle that requires ing trouble speaking and acting as the board to speak and act as one. It one?Here's a simple remedy: Adopt could be that errant members don't a written policy that says something understand the principle, though like, "The board of ABC Charter more often than not I encounter School hereby resolves that individ- people who should or do know bet- ual board members, including the ter, but violate it anyway because it chair, shall not give any directives to suits their interests. A board that al- any staff member, including the lows individual members to continue CEO." Then if any board member doing so is relegating the school to ignores it,he is not just transgressing management by an assortment of a sound governance principle, he is individuals, which is a far cry from transgressing the board's policy and governance. should be dealt with accordingly. ©2007 National Charter Schools Institute 6 March 2007 i Principle 6: Spend the growth and achievement, the board is squandering its time. Board's Time Only on A good way to implement the Things that Matter principle of spending the board's time only on the things that matter Like the board in the introduc- occurs in the agenda adoption stage tion of this paper, I often find that of the meeting. Assign time limits charter school boards spend most of to all discussion items, then add their meeting time talking about, them up and ensure that the board well, anything and everything except plans to spend at least half of that student growth and achievement time learning about student growth (which are actually two different and achievement. Exercise this dis- things). To get an idea of where your cipline on a regular basis and you board spends most of its time, here's may find your school excelling. a suggestion you can follow from Charter School Board University Principle 7: Commit (Carpenter,2006): Resources and Time to At your next board meeting, Developing take a sheet of paper with a line Good Governance drawn down the middle to cre- ate two columns. In one col- umn, keep track of the amount Like other skills,the principles of of time the board spends dis- good governance have to be learned cussing finances and/or student and practiced. Mastering them re- When it occurred achievement. In the other col- quires self-discipline and account- to me that there umn, record the time spent dis- ability on the part of the board,just aren't many good ` cussing everything else. To get as self-discipline and accountability books available on an accurate sense of how the are necessary for a CEO to excel at the topic of charter school board spends its time, don't tell charter school management. board governance, I decided anyone in advance what you Instead of leaving governance to to write one myself. You are doing. can purchase single copies on chance, proficient boards allocate regular time on their agenda to de- Amazon.com, or in bulk Most likely, you'll discover that the board spends a major- veloping their own governance ca- from the Institute's website. ity of its time talking about pacity. They also read and discuss things in the second column, books and articles on governance, Carpenter, B. L. (2006). i.e., things not pertaining to and attend.occasional seminars or Charter school board univer- finances or student growth and workshops. sity:An introductory course achievement. Instead, boards All of this, of course, requires to effective charter school wander all over the proverbial resources. But governing boards board governance (Ist ed.). map, discussing just about recognize that the cost of charter Mount Pleasant, MI: Na- every imaginable topic except school board ineffectiveness is far tional Charter Schools the two things that are really more than the price of learning to Institute. important to good governance. govern well. Make sure board de- (p 47) velopment is in your school budget If, during a regular meeting, you as you implement the seven abso- find that your board spent less than lutely universal, non-negotiable, 50 percent of its time focused on unchanging principles of good things directly related to student charter school governance. ©2007 National Charter Schools Institute 7 March 2007 Acknowledgements As the title implies, the principles outlined in this monograph are applicable to any chartered school, irrespec- tive of authorizer or sponsor, state law, management type (traditional leader or management organization), size of school, curricular or pedagogical emphasis, or other factors. Actually, they're applicable to any governing board, period. That's because the principles of good governance arise from sound theory. On this, my thinking has long been influenced by the prolific work of world renowned governance experts, John and Miriam Carver (by whom I have also had the privilege of being trained in the theory and implementation of Policy Govern- ance®). I am indebted to both of them for their work and service to boards. In addition to reading their books,I urge boards that are interested in Policy Governance to check out the Carver's website at www.carvergoveniance.com. Other writers have influenced my work with charter school boards too, such as Richard Chait, Ram Charan, and Katha Kissman, though the latter two are not cited in this piece. Both, however, are cited in my book on charter school board governance, Charter School Board University. All three are great thinkers. As with all my monographs, I attempted to write this one in everyday English, which is to say, in a non- academic style. Still, I cited the works of others because it is the appropriately scholarly thing to do. For fellow scholars and researchers who are interested in APA standards,I have chosen to deviate in the placement of my references in favor of positioning them alongside the text where the references appear. This is a preference I acquired from the master of visual design,Edward Tufte. Finally, let me close with this mea culpa: Any errors, omissions, or misinterpretations of others' works cited in this paper are, of course, unintentional and wholly my own responsibility. Also,this monograph was published by the National Charter Schools Institute for informational purposes only. The content is not to be used as a substitute for legal advice. Specific questions should be directed to the school's legal counsel. The author is solely responsible for the content. His opinions do not necessarily reflect those of the Institute. From the CEO of the National Charter Schools Institute Affiliated with Central Michigan University in Mount Pleasant, Michigan since its in- ception in 1995,the National Charter Schools Institute is committed to advancing quality in the charter school sector through publications, conference presentations and tailored techni- cal assistance to charter schools. If you found this publication meaningful, I invite you to visit our website at www.Nati.onalCharterSchools.or where you will find similar monographs on a variety of Brian L.Carpenter topics including board governance, administrative leadership, evaluating research and more—all free of charge. And as long as proper attribution is given, you're welcome to print and distribute as many copies of these as you like. If you would like to discuss the prospect of board governance.training or other kinds of technical assistance,please email me at bcaipenternnationalcharterschools.orb, or call the Institute at(989)774-2999(Monday through Friday, 8:00 am to 5:00 pm,EST). Finally, any feedback you might wish to suggest to improve this, or any of our publica- tions,would be valued. ©2007 National Charter Schools Institute 8 March 2007 *NATIONAL CHARTER SCHOOLS INSTITUTE www.NationalCharterSchools.ori� (989) 774-2999 THE SMITHSONIAN GOVERNANCE DEBACLE: TEN LESSONS CHARTER SCHOOL BOARDS CAN LEARN AT SOMEONE ELSE'S EXPENSE Brian L. Carpenter CEO National Charter Schools Institute Introduction Value Proposition James Smithson, the British donor whose estate If you have time to do the reading, the committee initially funded the creation of the Congressionally reports are fascinating. They are candid and detailed. chartered Smithsonian Institution, might well regret You can learn an immense amount from these reports his bequest if he knew what's been going on at his about how seriously things can go wrong when namesake. sloppy board governance is the organizational norm. Due to the actions of the Smithsonian's immediate Most charter school board members, while desir- past secretary—its senior executive the organization ous of good governance, however, do not have the is in trouble.Among other issues,the secretary finagled time to study hundreds of pages of board committee a stratospheric salary, submitted lavish expenses for reports, regardless of the quality of those reports. In- reimbursement, engaged in conflicts of interest, and stead, by synthesizing the committee reports into a spent a substantial amount of time fulfilling obligations few thousand words, this monograph holds forth a serving other corporate boards. Though his actions simple value proposition: In exchange for a brief in- were all egregious, responsibility for them ultimately vestment of board meeting time to read and discuss rests where it always does in a non-profit organization: this monograph, your board can consider whether it is with the governing board. making similar governance mistakes and correct As a result the board's failure to provide proper them. There are also lessons for authorizers to con- oversight, the sprawling conglomeration of museums, sider in their oversight of boards. galleries and a zoo, which currently receives about 70 percent of its annual billion dollar budget from US Overview* taxpayers, may lose more than face. A House appro- When board members default on their oversight re- priations subcommittee cut the Smithsonian's proposed sponsibilities, bad things happen to good organizations. 2008 funds by four percent, an amount equal to $26 Consider the Smithsonian Institution, whose board ne- million (Trescott, 2007).Although the Senate will have glect has recently been highlighted in the news—neglect to concur for this cut to take effect, the action has the that has tarnished that organization's name and may re- Smithsonian's attention. The governing board the sult in a partial loss of funding. Board of Regents—recognizes that it must quickly rem- In a series of articles beginning in January,2007, The edy its colossal failures. Washington Post reported a variety of issues that re- Enveloped in a hailstorm of adverse media, Con- vealed poor governance. The Smithsonian board, for gressional ire and public disgust, the Smithsonian example,either blithely consented to,or was ignorant of, Board of Regents formed two investigative committees outrageous executive salaries. While the distinction is in March, 2007, each independent of the other. Both hard to discern, the results are not: at the top of this se- were given the charge of assessing what went wrong, lect class, Lawrence M. Small, Secretary of the Smith- and more importantly, with recommending solutions to sonian,then his seventh year in that position,was receiv- the Smithsonian's problems. The committees reported ing current year cash compensation totaling $915,698- ( their findings in two reports,both of which contain valuable more than twice that of a US President (whose annual lessons for astute charter school boards and authorizers. salary is$400,000). ©2007 National Charter Schools Institute 1 Aug 2007 * With some minor edits,the overview originally appeared as column by Brian L Carpenter in the Charter School Monthly,Aug 2007. www.NationaICharterSchools.org (989)774-2999 In addition to this tidy sum, Small Small's actions were, the real prob- members arrive at meetings with their was reimbursed for a bewildering lem lies with a board that opted to rubber stamps in tow, conducting assortment of expenses. Many of be more lap dog than watchdog" school affairs like they're running a these were so unreasonable that Very well, you say, but what family-held business. They are incog- Senator Charles R. Grassley (R- does any of this have to do with nizant that their laissez-faire decision Iowa)characterized Small as living a charter school governance?Plenty. making is harmful to their school and "champagne lifestyle [that] turns out Some charter school boards act to the broader charter movement. to be Dom Perignon" (Grimaldi, like lap dogs. They approve murky Like the Smithsonian board, such 2007). Taxpayers may find this par- transactions improperly benefiting boards forget (or ignore) the fact that ticularly repugnant because the management, their family mem- charter schools are public institutions; Smithsonian, as the Post notes, is a bers, or individual board members. and that each board member has a duty public institution. Some boards fail to exercise due to the taxpayers who fund the school. However, the board's failure to diligence with respect to school fi- It hasn't been that long since the exercise its fundamental duty of or- nances;they recklessly approve, for charter world played its own rendition ganizational oversight didn't end example, whopping increases in of the Smithsonian tragicomedy. Re- there.Additionally,the Post reported capital indebtedness, thereby sad- member the California Charter Acad- that Small also served as a paid di- dling the school with a strangling emy scandal of 2004? Failure by the rector of an insurance company that debt load, the responsibilities for boards and the authorizer resulted in collected more than$500,000 a year in which will exist long after manage- the overnight displacement of 10,000 insurance premiums from the Smith- ment has changed hands. Many students as 60 schools under CCA sonian. One seems hard pressed to boards "delegate" auditor selection collapsed (Rotherham, 2005). The characterize such a relationship as any- to management, forgetting that the movement ended up with a shiner thing other than a conflict of interest. word "independent," as in the term visible to the country when the story Consider a few other unethical actions "independent auditor," means that was carried above the fold on the such as management directing book- the auditor should be independent front page of The New York Times keeping to reclassify an expense to of the management. (Dillon,2004). cover Small's tracks, and it smells like Even worse,in some cases,char- It's true, in these two examples, there was a skunk at the picnic. ter school boards are largely com- the organizations suffered due to poor Failing to see these as problems,the posed of longtime personal friends executive leadership. Rather than ex- chair of the board's executive commit- of management—and even relatives cuse sloppy governance, however, tee initially defended its executive in some states where the law al- these examples should serve to (Grimaldi, 2007). Thus, as The Wash- lows. Instead of engaging in gov- strengthen every charter school board ington Post editorial board opined on ernance as a solemn responsibility member's resolve to govern well. March 1,2007,"As distressing as Mr. on behalf of taxpayers, these board There is much at stake. Primary Source Documents for this Monograph Two committees,a Governance Committee(GC) and an Independent Review Committee(IRC), conducted investigations and produced reports independent of the other.The reports,number 54 pages and 112 pages(plus 280 pages of supporting documentation),respectively. Both reports,along with numerous articles from The Washington Post,constituted the sources of information about the Smithsonian in this monograph.Links to the committee's reports appear below,while The Washington Post articles can be accessed through its archives(for a fee) at www.washing1gq2ost.com You can download copies of both committee reports by entering the following links into your Web browser: The Board of Regents Governance Committee.(2007).Report of the governance committee to the board of regents,June 14,2007.Re- trieved July 28,2007,from bqp://newsdesk.si.edu/releases/Govemance Committee Report.pdf(In-text citations in this monograph refer to this report as"GC") Bowsher,C.A.,Potts,S.D.,&A.W.Pete Smith,Jr.(2007).A report to the board of regents of the Smithsonian Institution[Electronic Ver- sion].Retrieved July 31,2007 from bgp://www.si.edu/about/regm%t documents/1RC report.pdf.(In-text citations in this monograph refer to this report as"IRC") ©2007 National Charter Schools Institute 2 Aug 2007 www.NationalCha rte rSchools.ora (989)774-2999 Talent Isn't Enough Ten Governance One of the interesting things that Failures and How to the current Smithsonian "governance Remedy Them crisis" (IRC, p. 1) illustrates is that a 1. Failure to enact, revise, and group of talented, high-achieving ;monitor compliance with policies. individuals does not necessarily make ---____._-___._______._.__ a competent board. The Smithsonian In a number of instances, the Board of Regents includes the Chief GC and IRC reports (see p. 2) indi- Justice of the Supreme Court,the Vice cate that the Smithsonian board President of the US, and six Congres- either failed to enact or revise poli- sional Regents. Clearly as individuals, cies necessary for proper manage- these people have ascended to the ment, or in some instances, failed heights of their chosen careers. How- to monitor compliance by the ex- The concept of the board ever, as a group, they failed to fuNll ecutive with its existing policies. acting as the representa- the board's very purpose for exist- For example, the Smithsonian tive of the organization's ing: to ensure that the organization, board established a conflict of in- owners is one that has on behalf of its owners, accom- terest policy, but the board failed plishes what it should, while avoid- to monitor organizational compli- been clearly articulated ing the things that should be ance with it. by Dr. John Carver, the avoided(Carver,2006). Many charter schools have in- world's foremost expert Herein lies an important lesson adequate policies or none at all. In on board governance. In for charter schools and authorizers: schools where policies do exist, his book, Boards That even the most talented individuals board members often aren't even Make a Difference, he need to develop their capacity for conversant in them. A critical role board governance. It's also critical of the board is to establish major explains this idea more to understand that this development policies and then monitor compli- completely, along with process has to involve a lot more ance with them. After all, what's Policy GovernanceTM than learning compliance with open the point of enacting policies if fundamentals. For more meetings laws and the Freedom of compliance is never monitored? information on this Information Act (FOIA). Learning how to govern means Teaming how '2. Failure to actually provide model of governance, go to do the work of the board. It does oversight. to carverp_overnance.com not,mean,however, learning how to ` - - or contact the National do the work of the organization's The IRC report makes a state- Charter Schools Institute. executive; an error that the Smith- ment from which every charter sonian appears poised to make as school board should learn: the pendulum now swings in the "Historically,the Smithsonian Board other direction. of Regents appears to not have In the discussion that follows, I taken a strong oversight role. Mr. briefly discuss ten aspects of gov- Small's predecessor tried to in- emance using examples of board crease the involvement of the Re- failures from the Smithsonian case. gents in the affairs of the Smith- These ten aspects do not constitute sonian, but found a limited interest the entire work of the board, but on the part of the Regents in taking when taken together,they help form a more active role" (IRC,p. 3). a more complete picture how boards The duty of oversight is a legal should operate. concept under which governance ©2007 National Charter Schools Institute 3 Aug 2007 www.N atio na lCh a rte rSchoo ls.ori4 (989)774-2999 laws take shape. In essence, the A governing board should estab- duty of oversight means that every lish its own agenda. The board board member has a responsibility should always consult its executive to be informed about the organiza- in the process, but the final decision tion's operations for the purpose of as to what the board should discuss making reasonable decisions should be determined by the board. (Charney&Hyatt,2003). r, 11 - . _ __ . . _-. ___.-_____...___ -.. This does not mean, as some �4 Failure to ask probing ques- busybody charter school board j tions of Management or engage in members will think, that the duty 'robust board deliberation. of oversight is an open-ended invi- tation to walk the school's hall- In order to effectively perform its ways and sit uninvited in class- duty of oversight, the board should rooms, or direct the administration ask probing questions about the con- to reproduce volumes of records dition of the organization, the as- for the board member's individual sumptions which its executive uses inspection. Such actions are not to manage and lead it, and the ethi- part of board oversight. In fact, cal propriety by which decisions and they constitute a misuse of author- actions are executed. Critical ap- ity that the board should prohibit. praisal of such factors is part of the In contrast, the duty of oversight board's work. Skillful, honest ex- is properly fulfilled when the board ecutives value such deliberations as a whole monitors the ongoing because they appreciate that trans- condition of the organization, espe- parent accountability is in the best cially the organization's financial interest of the organization. condition. Instead, the Smithsonian Board "Nevertheless, board Nevertheless, board members "failed to ask very basic questions members must under- must understand that they cannot about the Smithsonian's opera- stand that they cannot delegate the duty of oversight to oth- tions" (IRC, p. 80). No surprise ers, including other board members. then, that it learned too late that its delegate the duty of over- Ultimately, every individual board second-in-command earned $10.3 sight to others, including member can be held liable for the million in cash, stocks, and options other board members. acts and omissions of the entire on other boards during her six years Ultimately, every individ- board. of employment at the Smithsonian. ual board member can be -- The IRC report also stated that"she 3. Failure to establish and control spent 400 work days away from her held liable for the acts its own agenda. office performing non-Smithsonian and omissions of the . -_ ........_.�__ -. _..____- _ activities" (p. 78). That such abuses entire board. " The Smithsonian Board erred existed within clear potential scru- when it did what many charter tiny of the board for six years proves school boards do: It delegated the it wasn't asking many questions. establishment of'its meeting agenda Does your board ask probing ques- to the senior executive. As a result, tions and engage in robust delibera- Small tightly controlled the flow of lion? Does your management react information to the board thereby defensively when you probe for infor- preventing the board from focusing mation not presented in reports? Be on various issues it should have con- wary. Questioning is part of the gov- sidered(GC,p.4;IRC p. 70). emance process. ©2007 National Charter Schools Institute 4 Aug 2007 www.N atio na lCha rte rSchools.om (989)774-2999 5. Failure to preserve the role and the law recognizes that certain docu- Figure 1.Generalized Seniority of authority of the board by flmved ments supersede other documents. For Documents for Charter Schools usage of connnittees. example, an organization's bylaws are Federal education and govern- senior to an organization's policies, ance laws such as No Child Left A central tenet of governance is meaning that if the policies contradict Behind and the Freedom of Infor- mation Act(FOIA).Other federal that a board should never permit the bylaws, the policies are invalid laws such as the Asbestos Haz- anyone—individual board mem- unless the bylaws are appropriately and Emergency Response Act bers, including the board chair or amended. If a charter school has a (AHERA)also apply to groups such as committees—to management agreement, the board's charter schools. come between it and its CEO policies are senior to that agreement. + (Carver, 2006). The board must Arising from this concept is the State statute regarding charter preserve the integrity of this rela- duty of obedience which requires a schools, not-for-profit organiza- tionship in order to ensure that board to obey documents, including tions,and applicable conven- proper delegation takes place. its own, based on the authority of tional public school laws(in In practice, this means, among those documents. In effect, the au- some states). other things, that committees thority of the board is constrained by . + should not make decisions that are various documents. In the decision The performance contract(a.k.a., properly the purview of the whole making process, the board must, the charter) between the board board. This includes limiting the therefore, actively consult those and the school's authorizer. Also,other authorizer power of the "Executive Commit- documents in order to make in- compliance requirements. tee," which is commonly misused formed decisions. as a mini-board to make decisions Here too, the Smithsonian Board ■■■■■■■■■ ■■■■■■■■■■ in between board meetings. failed a basic responsibility of govern- The board has a duty to obey the The Smithsonian Board botched ance. By permitting the executive documents above. Documents below may not contradict those this responsibility as well. It allowed committee to approve Small's com- above and must also be obeyed, individuals and committees to make pensation, not only did the board vio- but the board generally has the decisions—such as Small's compensa- late the integrity of the governance authority to alter these, lion—for the whole board. In fact,the process,it also disobeyed its own char- if done properly. IRC report noted,that not only did this ter and bylaws(IRC,p.67). ■■■■■■■■■■ ■■■ ■■■ ■■■ occur, "some Regents did not learn all A charter school board needs to The school's articles of the details of Mr. Small's compensa- regularly review key documents which incorporation and bylaws.* tion until they read about it in press it has a duty to obey(like its charter).It accounts"(IRC,p.5). should also ensure that documents Decisions that belong to the whole such as policies and management Polices and resolutions adopted board should never be delegated or agreements conform to senior docu- by the board. relegated to committees. Governance ments (such as state laws and its char- j also includes the process of holding ter). A generalized sequence of the Agreements governing the rela- committees accountable to the board. seniority of those documents to which tionship between management _ the board has a duty to obey appears in and the board. P6. Failure to peiform its duty of Figure 1. Obedience by ignoring its own arti- Be forewarned that this is more Procedures,such as those con cles of'inc07poratiou and bylaws. than an academic concept. Charter tained-in parent and - -- - __ - - --- school board members can be sued for student handbooks,etc. There is an important governance failing to fulfill their duty of obedience. concept embedded in corporate law A board action that violates your by- *Generally,the corporation comes into known as "seniority docu- laws for example land you d in existence before the charter issued, �' � p ma y y but the point here is that the school ments" (Charney & Hyatt, 2003). court. Avoid this by reviewing sen- may not receive a charter unless the Essentially, the concept means that for documents with your attorney. authorizer is satisfied with the bylaws. ©2007 National Charter Schools Institute 5 Aug 2007 www.Nationa lCha rterSchools.o ra (989)774-2999 Lastly,I want to add a strong word ?. Failure to promote board of warning about family members independence from management. (spouses of teachers, administrators, _. -----..__-- The GC report states that "Press etc.) serving on a board at the school reports and Congressional inquiries Where their family member is em- have questioned the relationship be- ployed. Although this is permissible tween the Regent nominations and under some existing state laws, I urge the prior Secretary" (GC, p. A-14). the movement to clean house before Such inquiries are rightly premised we have a crisis precipitated by such on an underlying governance con- improper governance, and thereby end up as the subject of a media investiga- cept:the decisions of a board should tion like the Smithsonian. Charter embody the highest degree of objec- tivity. This is hard to achieve when schools are public institutions and the board is composed of manage- should be governed with the highest ment's personal friends since they degree of fidelity not nepotism. Authorizers should lead the way. are unlikely to exert rigorous over- sight necessary to governance. This doesn't mean that an executive 8 Failure to engage in ongoing shouldn't cultivate friendly relation- i board development. ships with his board. It means that One of the things most evident in friends don't make objective boards. reviewing the reports by the com- Unfortunately, maintaining board mittees is that the Smithsonian independence is a commonly over- Board didn't understand govern- looked aspect of governance in the ance. As previously noted,that's not charter sector. Yet, charter school because the people on the board boards need independence in order were incompetent as leaders in their to make certain key decisions objec- tively—such as whether the school's chosen professions. It's simply be- current management is getting the cause governance is a discipline, job done right. mastery of which, like any other, requires study and practice. There's a lesson for authorizers The GC report recommends that here. Since board members aren't likely to withdraw themselves from the Smithsonian develop an orienta- tion program for new Regents. the board based on a prior relation- That's a good start, but it falls short ship with management, it is incum- of recognizing that ongoing board "Full disclosure of prior bent on authorizers to examine those development is needed in order to relationships should not relationships before appointing or reappointing board members. Full learn and practice the tenets of good only be required on disclosure of prior relationships governance. board member applica- should not only be required on Charter school boards can de- tions; the extent of those board member applications; the ex- velop their own governance capacity relationships should also tent of those relationships should by consistently doing three things: be judiciously evaluated also be judiciously evaluated by au- 1. Orienting new board members.At by authorizers. " thorizers. If longtime friends and a minimum, each new board mem- colleagues of the executive are per- ber should receive copies of various miffed to serve on a charter school documents that are foundational to board, such members should never the school's existence, along with constitute a majority. training to understand how the board ©2007 National Charter Schools Institute 6 Aug 2007 www.NationaICharterSchools.orj� (989)774-2999 uses those documents to do its work. Even better, a board can assess its References & Resources Some of these documents were performance following each meeting. mentioned on p. 5. For more infor- Such assessments can raise red flags Carpenter, B. L. (2006). Charter mation, see Chapter 5 of Charter which might prevent a full scale deba- school board university. An intro- School Board University(Carpenter, cle like the kind that occurred at the ductory course to effective charter 2006). Smithsonian. school board governance(1st ed.). Mount Pleasant, MI: National 2. Allocating time on its regular 10. Failure to pr07770te organiza- Charter Schools Institute. agenda for the purpose of discussing ;tional transparency. Carver, J. (2002). John Carver on governance. Reading books or arti- -_ - board leadership: Selected writ- cles like this one on governance, Through its numerous governance ings from the creator of the then coming prepared to discuss failures, the Smithsonian board ulti- world's most provocative and sys- those readings is a great way to fa- mately failed to promote organiza- tematic governance model. San cilitate board development. Ensur- tional transparency. By not holding Francisco, Calif.: Jossey-Bass, A in that this development regularly Wiley Co. g p b'u Y its executive accountable, the board takes place is a prime responsibility unwittingly created a culture in Carver, J. (2006). Boards that of the board president or chair. which wrong things were allowed to make a difference: a new design happen. In so doing, the board dam- for leadership in nonprofit and 3. Conducting at least one board public organizations (3rd ed.). San development retreat each year (not aged the organization. Francisco, CA: Jossey-Bass A Ultimately, it is the board that to be confused with conducting stra- Wiley Imprint. to is planning). The board should creates the ethical climate in a char- g p g)' ter school. In large part, it does this Dillon, S. (September 17, 2004). avoid all regular business during the Collapse of 60 charter schools development retreat so it can focus through selecting the right CEO (see p p Chapter 16 of Charter School Board leaves Californians scrambling. its attention specifically on improv- The New York Times. ing its governance. Incidentally, I University). Larger yet, however, is strongly recommend that the CEO or the role played by the board in culti- Grimaldi, J. V. (March 19, 2007). school leader participate en t this retreat vating an ethical climate by insisting Smithsonian documents detail on organizational transparency from chief s expenses. The Washington because the real secret to a successful that CEO. A board that fails to de- Post. school is learning how to navigate the intersection of governance(the board's mand this runs the risk of not only Hyatt,J.,&Charney,B.(2003). responsibility) and management (the finding themselves unfavorably The legal and fiduciary duties of CEO's responsibility). written about in the morning paper, directors Board Leadership, 78 but also of jeopardizing the very (Mar-Apr 2005). existence of the organization.anization. 9. Failure by the board to assess Rotherham,A. (2005). The pros& itself. The board's actions should also cons of charter school closures. In ----=—----- - - - - — -- be transparent.As well as setting the R. J. Lake & P. T. Hill (Eds.), Congruent with regularly devel- standard for the rest of the organiza- Hopes,fears&reality:A balanced oping the board's governance capac- tion to follow, transparency is a pre- look at American charter schools ity is regularly assessing the board's requisite for democratic organiza- in 2005. Seattle (Center on Rein- performance—something the Smith- tions. In fact, one of the purposes of venting Public Education). sonian board didn't do. At a mini- open meetings acts is to ensure ac- The Washington Post Editorial mum, a board should assess its own countability of public organiza- Board.(March 1,2007).Smithsonian performance at least annually. I rec- tions—like charter schools—by re- spending. The Washington Post. ommend doing it in conjunction quiring that their business be done in Trescott, J. (2007, May 24, 2007). with the board's assessment of its public view. Considering that char- With budget cuts, House panel CEO—for which a consultant can ters exist at the pleasure of the tax- scolds troubled Smithsonian. The be useful because of the knowledge paying public, should we be ex- Washington Post,p.C4. and objectivity they provide. petted to do anything less? ©2007 National Charter Schools Institute 7 Aug 2007 www.NationaICharterSchoois.org (989)774-2999 Summary The Smithsonian's governance errors extend beyond the ten that were briefly discussed in this mono- graph. Due to space constraints, it simply wasn't possible to describe all of the ways in which the board failed the organization. In fact, by my count, there were at least 17 major governance errors described in the committee reports,which means that there are another seven errors that didn't even get mentioned in passing in this monograph. Fellow researchers and consultants will, no doubt, want to read about these for themselves in the source documents. For charter school board members, however, the ten failures noted in this monograph provide ample illustrations to begin a discussion about the seriousness of pro- viding proper organizational oversight. The point of the monograph is not a case of governance consultant schadenfreude. While the Smith- sonian board should have taken its governance responsibilities more seriously, marry boards in the profit and not-for-profit sector, including some charter school boards I've observed, wait until its too late. In this respect,the Smithsonian board performed no more poorly than many charter school boards. It's just that some of them haven't made the newspaper—yet. Board members need to realize they have been granted a weighty privilege to make decisions in behalf of others, but that the privilege is coupled with an equally as great responsibility. An appropriate re- sponse is to embrace the privilege and the responsibility by committing oneself to reading and studying governance in order to perform the board member role well. When reading about the failures of the Smithsonian board in this monograph, consider that some lessons are cheaper when learned at someone else's expense. Disclaimer: This monograph is not intended to substitute for legal advice. Charter school boards should retain and consult their own independent attorney.Further,the opinions stated herein are those of the author and do not necessarily reflect those of the National Charter Schools Institute. From the CEO of the National Charter Schools Institute Affiliated with Central Michigan University in Mount Pleasant, Michigan since its incep- tion in 1995 the National Charter Schools Institute is committed to advancing quality in the charter school sector through publications, conference presentations and tailored technical assistance to charter schools,authorizers,state associations and education service providers. If you found this publication meaningful, I invite you to visit our Web site at www.NationalCharterSchools.or; where you will find similar monographs on a variety of Brian L.Carpenter topics including board governance, administrative leadership, evaluating research and more— all free of charge.As long as proper attribution is given,you're welcome to print and distrib- ute as many copies of these as you like. If you would like to discuss the prospect of board governance training or other kinds of technical assistance, please e-mail me at bcarpenter @nationalcharterschools.org, or call the Institute at(989) 774-2999(Monday through Friday, 8:00 am to 5:00 pm,EST). Finally, any feedback you might wish to suggest to improve this, or any of our publica- tions,would be valued. ©2007 National Charter Schools Institute 8 Aug 2007 Framework for School Board Development Page 1 of 3 Texas Association of School Boards http://www.tasb.org/training/cec/framework.aspx Printed on Friday, September 05, 2008 @ 5:57:58 PM CST Training and Events Continuing Education Credit Reporting Service Framework for School Board Development (Also known as the Framework for Governance Leadership) Adopted by the Texas State Board of Education, January 12, 1996 Preamble: The Board of Trustees is the educational policy-making body for Texas public school districts. To effectively meet the challenges of public education, school boards and superintendents must function together as a leadership team. Each leadership team must annually assess its development needs as a corporate body and individually to gain an understanding of the vision, structure, accountability, advocacy, and unity needed to wide educational programs and services that ensure the equity and excellence in performance of all students. The Framework for School Board Development has been approved by the State Board of Education to provide the critical areas of development for all public school boards. Vision The board ensures creation of a shared vision that promotes enhanced student achievement. The board keeps the district focus on the educational welfare of all children. The board adopts a shared vision based on community beliefs to guide local education. The board ensures that the vision supports the state's mission, objectives and goals for education established by law. The board ensures that the district vision expresses the present and future needs of the children and community. The board demonstrates its commitment to the vision by using the vision to guide all board deliberations, decisions, and actions. Structure The board provides guidance and direction for accomplishing the vision. The board recognizes the respective roles of the Legislature, State Board of Education, the Texas Education Agency, and Local Boards of Trustees in the governance of the public schools. http://www.tasb.org/training/cec/framework.aspx?print=true 9/5/2008 rrameworx for �!)cnooi tsoara "eveiopmeni rage z of s The board fulfills the statutory duties of the local board of trustees and upholds all laws, rules, ethical procedures, and court orders pertaining to schools and school employees. The board focuses its actions on policy making, planning, and evaluation. The board adopts a planning and decision making process consistent with state statute that uses participation, information, research, and evaluation to help achieve the district's vision. The board ensures that the district planning and decision making process enables all segments of the community, parents, and professional staff to contribute meaningfully to achieving the district's vision. The board develops and adopts policies that provide guidance for accomplishing the district's vision, mission, and goals. The board adopts a budget that incorporates sound business and fiscal practices and provides resources to achieve the districts vision, mission, and goals. The board adopts goals, approves student performance objectives, and establishes policies, that provide a well-balanced curriculum resulting in improved student learning. The board approves goals, policies, and programs that ensure a safe and disciplined environment conducive to learning. The board oversees the management of the district by employing a superintendent and evaluating the superintendent's performance in providing education leadership, managing daily operations and performing all duties assigned by law. The board adopts policies and standards for hiring, assigning, appraising and compensating school district personnel in compliance with state laws and rules. Accountability The board measures and communicates how well the vision is being accomplished. The board ensures progress toward achievement of district goals through a systematic, timely, and comprehensive review of reports prepared by or at the direction of the superintendent. The board monitors the effectiveness and efficiency of instructional programs by reviewing reports prepared by or at the direction of the superintendent and directs the superintendent to make modifications that promote maximum achievement for all students. The board ensures that appropriate assessments are used to measure achievement of all students. The board reports district progress to parents and community in compliance with state laws and regulations. The board reviews district policies for effective support of the district's vision, mission and goals. The board reviews the efficiency and effectiveness of district operations and use of resources supporting the district's vision, mission, and goals. The board evaluates the superintendent's performance annually in compliance with state laws and regulations. The board annually evaluates its performance in fulfilling the board's duties and http://www.tasb.org/training/cee/framework.aspx?print=true 9/5/2008 rrameworx for 3cnooi rsoara lieveiopment rage j of j responsibilities, and the board's ability to work with the superintendent as a team. 'vocacy The board promotes the vision. The board demonstrates its commitment to the shared vision, mission, and goals by clearly communicating them to the superintendent, the staff, and the community. The board ensures an effective two-way communication system between the district and its students and employees, the media and the community. The board builds partnerships with community, business, and governmental leaders to influence and expand educational opportunities and meet the needs of students. The board supports children by establishing partnerships between the district, parents, business leaders, and other community members as an integral part of the district's educational program. The board leads in recognizing the achievements of students, staff, and others in education. The board promotes school board service as a meaningful way to make long-term contributions to the local community and society. Unity The board works with the superintendent to lead the district toward the vision. The board develops skills in teamwork, problem solving, and decision making. The board establishes and follows local policies, procedures, and ethical standards governing the conduct and operations of the board. The board understands and adheres to laws and local policies regarding the board's responsibility to set policy and the superintendent's responsibility to manage the school district and to direct employees in district and campus matters. The board recognizes the leadership role of the board president and adheres to law and local policies regarding the duties and responsibilities of the board president and other officers. The board adopts and adheres to established policies and procedures for receiving and addressing ideas and concerns from students, employees, and the community. The board makes decisions as a whole only at properly called meetings and recognizes that individual members have no authority to take individual action in policy or district and campus administrative matters. The board supports decisions of the majority after honoring the right of individual members to express opposing viewpoints and vote their convictions. P.O. Box 400, Austin, Texas 78767-0400 • 512-467-0222 ©Copyright 1995-2008 All Rights Reserved. Privacy Policy. Terms & Conditions of Use. Disclaimer. http://www.tasb.org/training/cee/framework.aspx?print=true 9/5/2008 TASB LEADERSHIP TEAM SERVICES NEW BOARD MEMBER RESOURCES PAGE 1 OF 2 New Board Member Preparation Checklist Setting Goals and Priorities and Monitoring Success • Find out your district's process and calendar for setting goals and priorities and assessing success. • Have your superintendent brief you on the state accountability system and the AEIS. Ask your superintendent for a copy of your district's most recent annual performance report if you don't already have one. • Get a copy of your current district goals and review them. • Find out how success on your district's current goals is going to be assessed. • Keep a copy of your district goals with you at board meetings. Adopting Policies • Have a look at a copy of your district's policy manual. • Have your board president or one of your colleagues give you a brief introduction in how to use the policy manual. • Ask about your local procedures for adopting and revising policy. • Read through and make sure you are familiar with both the legal and local versions of key policies you will need every day, such as: • Policy DGBA—Employee Complaints • Policy FNG—Student Complaints • Policy GF—Public Complaints • Read all the policies that govern the conduct of board business, such as: • Policy BAA—Board Powers and Duties • Policy BBE—Board Member Authority • Policy BBFA—Board Member Ethics: Conflict of Interest • Policy BE—Board Meetings • Policy BJ—Superintendent Employment Hiring and Evaluating the Superintendent • Find out your board's evaluation cycle and what step in the process will be coming up next. • Get a copy of the evaluation instrument your board will use and review it right away. • Find out what procedure, if any, your board has established for you to ask questions about performance between the evaluation conferences. Adopting a Budget and Setting a Tax Rate • Ask your board president to give you a brief"guided tour" of the current year's budget. • Get a copy of your district's budget calendar. • Get copies of any materials your board may have developed or may have received from staff that are relevant to the budget that is being prepared. ©2005 TEXAS ASSOCATION OF SCHOOL BOARDS,ALL RIGHTS RESERVED NEW BOARD MEMBER PREPARATION CHECKLIST TASB LEADERSHIP TEAM SERVICES NEW BOARD MEMBER RESOURCES PAGE 2OF2 Communicating with the Community • Find out what your board and district routinely do to keep the public fully and accurately informed. • Find out who serves as the designated spokesperson for your board. • Talk with your colleagues about the best way to respond to patrons and to the press when you're on the losing side of a close and carefully watched vote. • Find out what formal means your board uses to hear from your community. Board Operations--Meetings • Find out who prepares the agendas for your board meetings and how you get an item included. • Find out when you can expect to get agenda materials from your superintendent and what you do if you need additional information. • Ask your board president what rules of order are used at your meetings. • Make sure you understand the basic provisions of the Texas Open Meetings Act. • Make sure you understand the limitations on closed sessions of your board. • Study policy BEC—Closed Meetings. Board Operations--Board Members and District Patrons • Talk with your colleagues about how they respond in controversial situations. • Learn your district's policies and procedures for handling patron complaints, including • Policy FNG—Student Complaints • Policy GF—Public Complaints Board Operations--Board Members and the District Staff • Ask your superintendent to brief you about district hiring processes, especially about how community-sensitive positions, such as principalships and head coaching jobs, are filled. • Talk with your colleagues and your superintendent about when it is appropriate for board members to raise concerns about district staff and what is the appropriate manner for raising those concerns. • Be sure you are familiar with board policies and procedures for asking information of staff. • Study policy BBE—Board Member Authority. • Make sure you know your district's policy for hearing complaints from staff. • Find out your board's policy and procedures for board member visits to campuses and be very careful to adhere to them. ©2005 TEXAS ASSOCATION OF SCHOOL BOARDS,ALL RIGHTS RESERVED NEW BOARD MEMBER PREPARATION CHECKLIST 0 91 i #►NATIONAL CHARTER SCHOOLS INSTITUTE nationalcharterschools.org (989)774-2999 THE SEVEN OUTS Jodi STRATEGIC PLANNING MADE EASY FOR CHARTER SCHOOLS SiRti[61( EXCERPTED FROM THE NEW BOOK OUTS rXXRSIX6 MRRE El1f fRR[NIRIER BYBRIANL. CARPENTER Introduction Once the board has defined the purpose of its school (in clear language devoid of proc- JUST THE WORDS"STRATEGIC PLANNING' esses), it must establish the major outcomes are enough to make some board members and that are to be achieved. These outcomes need school executives feel swamped. The process not necesssazzly be easy to measure or assess; is usually long, boring, and largely without they must simply be worthy of the schooPs results—unless you count a five-inch-thick resources in pursuing them. vinyl notebook collecting dust on a shelf as an To begin the process, we'll group outcomes achievement. according to four different measures or cate- Don't mire your board and executive in gories. Four measures are required because writing a plan that is tedious, dull, and loaded no single category is capable of capturing the with administrivia three adjectives that entire range of things the board needs to con- could have been invented to describe the typi- sider in evaluating school performance. All cal strategic plan. measures, regardless of their value, have The Seven Outs offers your a school a limitations. I've briefly defined each of the step-by-step framework for conducting strate- four measures below. Alongside each meas- gic planning. Once completed, the board and ure, I indicate whether it is quantitative, executive will know what the students are to qualitative,or both. accomplish and how well they are to accom- 1.Relative Performance(quantitative). plish it, and the board will know how to This is a rank order measure in which the evaluate the outcomes. school's performance (usually)on state tests is Step One= Figure Out ranked against other schools. A school that is in the 63rd percentile rank, for example, The first fundamental, non-delegable obligation scored as good as or better than 63 percent of of the board is to define why the school exists. the schools in the comparison group. Once a board has done that,it is capable of mov- 2. Absolute Performance (quantitative, usu- ing to the next two steps: prescribing the out- ally expressed qualitatively). comes the school will accomplish and establish- This is an individual student score on ing what level of achievement will demonstrate state tests. (There are federal tests that also satisfactory performance of those outcomes. produce such data, e.g., the National Assess- When a charter school hoard fails to fgure out ment of Educational Progress, but the schools why the school exists, it creates by default, the that participate do not receive any data back problem of having no meaningful benchmarks because of complex sampling designs against which to assess the organization's pro- needed to generalize the findings to all gmsstowarditspurpose. schools.) Usually student performance on ©2008 National Charter Schools Institute 1 June 2008 9NATIONAL CHARTER SCHOOLS INSTITUTE nationalcharterschools.org (989)774-2999 ®0 state tests is reported to the school as being Mission-Specific Outcomes in one of three or four categorical outcomes such as helow basic, basic, proficient, or ex- ceeds standards. 3. Individual Gains(quantitative). E This is an individual student measure ° School's Present that compares test results between two or a- Performance more points in time. In other words, there is a starting point in which the student's a� performance is benchmarked, and then, a subsequent point at which the student's gains can be measured. Absolute Performance 4. Mission Specific Outcomes (quantitative Figure 1.The Four Measures of School Performance or qualitative, but quite often qualitative). These are school or individual outcomes The board launches the strategic plan that are unique to your particular school. ning process by figuring out one goal for each They are probably not measured using con- of the first three measures and up to three ventional tests (nor should they necessarily goals in the mission-specific category. Though be). They are important because they can re- the process of figuring out what is to be ac- veal information about the school's perform- complished takes significant time and effort, ance relative to its unique mission that proba- the clarity that results from simply discussing bly cannot be measured or assessed through outcomes will produce what amounts to a any of the other three measures. rocket flare illuminating the school's destina- You can picture the four measures above tion to everyone. as a square. By combining information from Step Two: Find Out all four measures, the board will not only know precisely what to look at in evaluating When I explained the premise of Step Two: the school, it will also have an excellent gauge Find Out, to my friend Corey, a successful on how well the school is performing along Australian real estate developer, he said, two dimensions=the present and the future. "Just tell them that when they were in Figure 1 depicts this relationship. Each school, they got in trouble for copying what measure forms one side of the box. Taken others were doing. In business, you get re- together, these measures form the bounda- warded." ries of the area labeled the school's present As Corey astutely observed, entrepre- performance. This performance is properly neurial enterprises find out how other busi- evaluated against the board's defined out- nesses have been successful so they can comes. replicate—or at least adapt—the same At the same time, data from multiple strategies to their own profit. For some rea- years for each of the measures can be son, however, many charter schools have thought of as a continuum along which per- been slow in doing this. Regardless, it is formance for that measure is trending in merely commonsensical to look at what one direction or the other. Using these other wildly successful charter (or other points, the board can evaluate the trajec- public and/or private) schools are doing in tory the school is on so that its future per- order to see how they are achieving so you formance can be predicted. can implement those things in your school. ©2008 National Charter Schools Institute 2 June 2008 ••• *NATIONAL CHARTER SCHOOLS INSTITUTE nationalcharterschools.org 1 (989)774-2999 • Although the process of finding out Step Three: Scope Out what other schools are doing is step two in The Seven Outs, some boards, particularly In the third step in The Seven Outs, the those that are in the initial application board continues to take the lead in the stra- phase, may actually want to make this step tegic planning process. The executive may one, or at least concurrent with step one. add value to the process of scoping out the While current research, on the whole, external environment, as well, but the shows that most charter schools perform board should generally lead because it is about the same as conventional public likely that it governed the school before the schools, there is no shortage of world-class current executive was hired and will govern examples. A short list of my favorites in- the school after he or she leaves. This conti- cludes (in no particular order): High Tech nuity provides a familiarity with the exter- High (www.hightechhigh.org), KIPP Acad- nal environment that the executive may not emies (www.KIPP.org), Achievement First possess. Regardless, it is critical that the (www.AchievementFirst.org), and Uncommon board focus on a vital few elements in the Schools (www.Uncommonschools.org), along external environment that may be strategi- with every other less visible charter school cally important to the school. that scores in the top quartile on the their There is a significant premise behind state tests, compared to all public schools in scoping out the external environment: Your their state (charter or conventional), in ad- school does not operate in a vacuum. dition to demonstrating fulfillment of mis- Changing realities outside your school can sion-specific goals. affect it. In order to effectively position the From a quantitative aspect, it's also school for success, it is necessary to inte- worth your time to examine schools that grate those changing realities into your have been referred to as "90/90/90." These strategic plan. To accomplish this, the are schools in which the enrollment is com- board must scope out the external environ- prised of 90 percent or more minority stu- ment. dents, and 90 percent of the children are In business, there is a wide range of eligible for the federal government's Free variables in the external environment that and Reduced Price Lunch program can affect its profitability (the single pri- (education's proxy for kids from families in mary reason why a business exists). For poverty), but in which 90 percent or more of example, foreign currency exchange rates, the kids attain high achievement. market fluctuations, availability of capital, Not surprisingly, 90/90/90 Schools have mergers and acquisitions, and stock prices common characteristics in their instruc- are all external variables that can impact tional approaches. To learn what those are, the business for better or worse. point your browser to The Leadership and Businesses that are successful over the Learning Center at www.leadandlearn.com. long range, to one degree or another— Enter "90/90/90" in the search box to read a depending on the type of company— brief case study by Dr. Douglas B. Reeves constantly monitor and evaluate those vari- that describes the practices of 90/90/90 ables. Most of the literature on strategic Schools. If you've understood what I've said planning for businesses emphasizes the so far, you probably won't be surprised to critical importance of continuously inte- read that "90/90/90 Schools had a laser-like grating those variables with the company's focus on student achievement." strategic plan. ©2008 National Charter Schools Institute 3 June 2008 0 goo f *NATIONAL CHARTER SCHOOLS INSTITUTE nationalcharterschools.org 1 (989)774-2999 Where charter schools are concerned, I've noticed that some boards delegate there are, thankfully, fewer variables, this to their executive director or the man- though they are no less important. For ease agement company they've hired. While it is of understanding, I've divided the external necessary for management to maintain a environment for charter schools into two professional relationship with the author- environments: the immediate external envi- izer, the entire responsibility for doing so ronment (where the school is located) and should never be delegated. The board the statewide political environment (where should maintain its own direct line with the legislative or judicial decisions can impact authorizer. Such communications help en- the school). These environments are shown sure that the board is directly hearing the in Figure 2. authorizer's position. That way, if there are problems with the school's performance or reporting, the board has a direct link with the organization that is ultimately charged with assessing the school's performance and making a renewal decision. A monthly phone call from the board president to the THE authorizer can foster this relationship. SCHOOL Your State Political Environment IMMEDIATE ENVIRONMENT AL E The second key consideration in the exter- nal environment is what I call the general � mcaLtNVA chartering climate in your state. Well be- fore the advent of charter schools, public schools were highly politicized. Unions, Figure 2.Charter School Internal and External Environments lawsuits, contested election results, and Your Immediate External Environment media influences are all inevitable in any endeavor annually funded by a half-trillion Important elements of the external envi- dollars of taxpayers' money. ronment occur in your immediate environ- Charter schools, in a broad sense, cut ment. Because they are external, the board across the grain of existing power bases, usually has little or no influence on them. money control, and jobs. Hence, they As things that strongly impact the school, ratchet up several more notches the politi- however, demographic trends, competition cization of public schools. In some states, from other schools, and authorizer relation- charter schools are largely accepted for ships must be carefully evaluated. what they are: public school choices. In I include the aspect of a charter school's such states, there are no artificial caps lim- authorizer relationship under the heading iting growth of schools or enrollment, fund- of the immediate environment for the sim- ing is largely equitable, and schools can op- ple reason that even if you are authorized erate multiple campuses. But in other by a statewide authorizing entity that is states, the attacks in both the courts and not in close geographic proximity to your the legislatures are fierce and unrelenting. school, what your authorizer is doing typi- Having a good handle on the climate in cally has the same effect as thought it were your state is an essential part of developing in your immediate area. a sound strategy. 02008 National Charter Schools Institute 4 June 2008 !goo 0 ►NATIONAL CHARTER SCHOOLS INSTITUTE nationalcharterschools.org 1 (989)774-2999 Step Four: write Out Personnel. If world-class achievement is what the board has in mind, then it is im- In this phase of strategic planning, the pri- perative that the executive recruit and re- mary role now shifts to the executive. Up to tain the best teachers. The plan should this point, the board has taken the lead in demonstrate that the executive has thought figuring out what it wants, finding out how through how that will be best accom- others are already achieving it, and scoping plished. It should factor in things like the out the external environment for things executive's strategy for professional growth that may impact the school's position. As and renewal of faculty. It should also con- the environment changes, the board may tain nuts-and-bolts things directly related want or need to recalibrate what it wants to to staffing patterns, such as teacher-to- achieve. (To varying degrees, the first three student ratio,.grade configuration (i.e., one steps of The Seven Outs often take place in section or two of a particular grade), and the process of applying or reapplying for a compensation/performance bonus plans. charter.) Operations. The main consideration of However, once the board has formulated the operations component is the budget by a complete picture of what the school will which the school functions in pursuit of the achieve, how others are doing it, and what board's goals. Other things may need to be the immediate environment is like, it has ar- addressed, however, operational discussion in rived at a turning point in strategic planning. the plan should be limited to those things To proceed, the board will need profes- that directly influence the accomplishment of sional expertise: It will need an executive the board's directives (Remember, that part director, i.e., someone who executes the of the goal of The Seven Outs is to produce a board's intent. I usually refer to this person concise, readable plan. This naturally Are- as the executive, executive director, or CEO, cludes writing about every operational detail rather than administrator, principal, school that could be included.) leader, or other title, in order to emphasize Mission Fulfillment. This part of the the skill at which this leader must excel. plan addresses the decisions the executive Because the board cannot be onsite and it is going to make concerning things like cur- does not possess school operations expertise, riculum, assessment, and instructional phi- it must delegate the authority for achieving losophy that achieve the board's goals. Be- its goals to an executive. Since a strategic cause of the highly regulated environment plan is mostly about processes, these should of charters, the executive should also dis- be determined by the executive. cuss how he or she plans to achieve state The executive must take the board's pri- learning objectives (called by different orities, add his or her own to them names in various states). Care should be (provided that they augment rather than taken, however, not to be too technical in supersede or contradict), and then synthe- this section. The goal is to focus on how the size them into a series of operational steps. board's outcomes will be achieved. In other words, the executive must know The three main components of a charter how to translate intent into a plan and then school strategic plan, along with the lay- follow with actions that will accomplish it. ered external environment (the relevant What should be in that plan? Essen- aspects of which were discussed in Step tially three components, described in the Three:Scope Out), are pictured in Figure 3 following paragraphs. on the next page. ©2008 National Charter Schools Institute 5 June 2008 *NATIONAL CHARTER SCHOOLS INSTITUTE nationalcharterschools.org 1 (989)774-2999 this stage actually ceases to be primarily a planning process. The nature of the task is Personnel Component now almost entirely operational. But while emphasizing the operational nature_of car- rying out the plan, I also want to highlight something that Ram Charan and Larry Mission Fulfillment Operation ] Bossidy say in their book, Execution= The Component MMEDIATE EXTERNAL Componenat Discipline of Getting Things Done. Namely, ENVIRONMENT strategic planning is an iterative process, ST��PotRICAL EMAF� i.e., the plan is always morphing In re- sponse to the environment, so you're never really done planning. Figure 3.The Three Components of School Operations in a Of course, the job of the executive isn't Layered External Environment so much one of actually carrying out those details as it is one of getting his or her team It is imperative that each of these three to execute them. This means the executive components be integrated with the other. must be a master at delegating. For example, recruiting and retaining the best teachers is the key to fulfilling the mis- Step Six= Measure Out sion component. Because talent costs, how ever, recruiting the best teachers also has At this stage of the strategic planning proc- ess, the board must again assume a lead enormous budget ramifications. The execu- tive's challenge is in determining how to role, though it is likely the executive or some other professional with pertinent ex best integrate the components. pertise will have to guide it through the Step Five: Carry Out evaluation process the first few times. In this step, the board measures the progress As previously noted, the very title of execu- of the school against the outcomes it deter- tive contains the implied essence of the mined in Step One:Figure Out. In so doing, job—one who executes a plan. Thus, as the besides capitalizing on the observation that logical next step to writing the plan, the in organizations, "What gets measured gets executive must also take the lead in the done," the board is actually fulfilling its fifth step of the strategic planning process= governance obligations to the taxpayers by he or she must carry out the plan. ensuring that the school accomplishes its Having the ability to carry out a plan, purposes. The process of ensuring is the even though it will ' involve countless very essence of hoard governance. changes along the way, is a hallmark of a First, it is imperative to understand charter school executive. A brilliantly de- that when the board evaluates its execu- vised plan—even one with pictures that is tive, it is evaluating the school and vice professionally bound with a four-color versa. This is because the executive is the cover—is worthless if you can't execute it. one person who is accountable to the board The effective charter school executive for the performance of the school. For ex- not only knows how to write a plan (Step ample, if the fourth-grade reading scores Four: Write Out), but even more crucially, are in the tank, the board doesn't (or how to carry out a plan. In what sounds shouldn't) call the fourth-grade teacher to like a contradiction, strategic planning at the table to give an account. It is the execu- 02008 National Charter Schools Institute 6 June 2008 ONATIO NAL CHARTER SCHOOLS INSTITUTE nationalcharterschools.org 1 (989)774-2999 tive who must answer for the performance Keep in mind that the perfect executive has- of the entire school. Thus, when the board n't yet been invented. So the board's standard is evaluating the school, it is evaluating Its should never be perfection. The board simply executive. needs to make a reasonable evaluation of the There is a common mistake in evaluat- outcomes. The most reliable performance ing the school that the board needs to evaluation occurs with trend data. For exam- avoid. Rather than name it directly, how- ple, if the percentage of kids achieving a ever, look at the bullet list below and see if year's worth of gains is less than 100 percent, you can find what all the measures have in is this year's percentage higher than last common. year's? In other words, is it trending in the • Of teachers newly hired, 83 percent right direction? If it is trending in the right have advanced degrees direction, what's the rate of increase? At the • New curriculum purchased this year present rate,will the school hit its objective in • Five hundred new books added to the three years or fifteen.' library Does this result in an element of subjec- • New assessment program being imple- tivity. Yes, but almost all evaluations do. mented But one of the advantages presented in The • High-caliber teacher development pro- Seven Outs is that subjectivity is signifi- gram being implemented cantly narrowed to stated outcomes. • Enrollment increased (apart from evi- Step Seven: Shout Out dence showing it is being driven by aca demic achievement) In this final step, the board and the execu • Reduction in student-to-teacher ratio tive work together to disseminate the • More rigorous classroom teacher school's accomplishments. I call this step evaluation being implemented shout-out as a salute to Achievement First, • Everyone is dedicated and working a high-performing charter organization, as hard previously mentioned. It publishes school accomplishments in Shout Out, a tri- Give yourself an "A" if you recognized annual newsletter. that everything in the list is an input, not Like Achievement First, you will want an outcome. This is a critical distinction the to shout-out your school's accomplishments. board needs to make because there is an A simple reality in today's world constitutes almost natural temptation to assess pro- the premise of this seventh step in strategic gress on outcomes by measuring or examin- planning: It is insufficient to achieve world- ing inputs! class results; you also have to broadcast We've Done the Evaluation:What's Next? them. Your school's parents, teachers, stu- dents, authorizer, state association, local You may be thinking, what does our board media, and broader community are among do if some of its outcomes were achieved, the stakeholders that need to know what but not as well as we hoped? Do we have to the school is accomplishing. fire our executive? The answer, of course is, Although it is beyond the scope of the no, you don't have to fire your executive. book, a media plan that describes how the The board simply has to use its judgment to school will shout out its extraordinary accom- determine whether the actual performance plishments can greatly benefit any charter against the stated outcomes is acceptable. school. ©2008 National Charter Schools Institute 7 June 2008 *NATIONAL CHARTER SCHOOLS INSTITUTE nationalcharterschools.org ( (989)774-2999 00 The following publications greatly influenced the writing of The Seven Outs and are highly recommended for further charter school board/executive development. Bossidy, L., and R. Charan. 2002. Execution The discipline ofgetting things done. New York: Crown Business. Carver, J. 2006. Boards that make a differenceA new design for leadership in nonprofit and public organizations. 3rd edition. San Francisco, CA:Jossey-Bass. Charan,R., S. Drotter, and J. Noel. 2001. The leadership pipeline How to build the leadership- powered company. San Francisco:Jossey-Bass. Collins, J. 2001. Good to great and the social sectors why business thinking is not the answer.a monograph to accompany Good to great=why some companies make the leap. . . and others don't. New York:Harper Business. Collins, J. 2001. Good to great Why some companies make the leap—and others don't.New York: Harper Business. Ferriss, T. 2007. The 4-hour work week-Escape 9-5, Eve anywhere, and join the new rich.New York: Crown. Heath, D. and C.Heath. 2007. Made to stick Why some ideas survive and others die.New York: Random House. Koch, R. 1997. The 80/20 principle=The secret to success by achieving more with less.New York: Doubleday Business. Peters, T. 2004. In search of excellence lessons from America's best-run companies.New York: Harper Business Essentials. Reeves, D. 2004. The 90190190 schools a case study. Chap. 19 in Accountability in action a blueprint for learning organizations. Englewood, CO:Advanced Learning Press. Thernstrom,A., Thernstrom, S. 2003. No excuses closing the racial gap in learning. New York: Simon&Schuster. Trimble,J. R. 1975. Writing with style conversations on the art of writing. Englewood Cliffs, NJ: From the CEO of the National Charter Schools Institute If you found this publication beneficial, I invite you to visit our Web site at www.NationalCharterSchools.org where you will find similar mono- graphs on various topics, provided free of charge. You're welcome to re- print and distribute these documents, as long as they are presented unal- tered and in their entirety. To receive a group discount when ordering five or more copies of the book on which this monograph was based, The Seven Outs, or to engage the Institute for training or speaking, please contact us at (989) 774-2999, Monday through Friday, 8:00 am to 5:00 pm EST. You can also send email to Brian L.Carpenter resources @nationalcharterschools.org. Affiliated since its inception in 1995 with Central Michigan University in Mount Pleas- ant, Michigan, the National Charter Schools Institute exists that the charter school sector has the necessary resources to further its development, including publications, conference presentations, and training. Institute publications are not intended to render or substitute for legal advice. ©2008 National Charter Schools Institute 8 June 2008 -, CHARTER SCHOOLS nnU- E i �R r �s+eSad'aw nay��.9 H CREATING EFFECTIVE GOVERNING BOARDS ............................................................................................................................................................................................ Produced under a grant from the Annie E. Casey Foundation CHARM. FRIENDS IATIINAL N [ TW011 � ��- ^Kr•■e:a rzr;E:y+'cw E+i:;Tl�l.'1EY�Y r.SiAri1 i ABOUT THE AUTHOR Creating an Effective Charter School Governing Board was created by Frank Martinelli,president of the Center for Public Skills Training in Milwaukee. He has provided training and management assistance to nonprofit organizations and public agencies since 1976. Frank has a special interest in charter school start-ups by non- profit youth and family serving organizations and has assisted in the planning of three such charter schools in Milwaukee. Areas of expertise include volunteer management,strategic planning facilitation, designing and leading high priority meetings and conferences, board and staff retreats, and forging community collaborations and alliances.Frank is also a member of the faculty of The Learning Institute,a national joint venture of the Society for Nonprofit Organizations, United Way of America,and the University of Wisconsin-Extension designed to deliver training through a range of emerging technologies. .C.HARTER.....SCHOOLS....................................................-............................................................................................................................... CREATING EFFECTIVE GOVERNING BOARDS - 1. BUILDING THE FOUNDATION 2. IDENTIFYING AND RECRUITING BOARD MEMBERS 3. ORIENTING AND TRAINING BOARD MEMBERS 4. MAKING EFFECTIVE DECISIONS 5. STRATEGIC PLANNING AND THINKING 6. CARRYING OUT LEGAL AND FINANCIAL RESPONSIBILITIES 7. DEVELOPING EFFECTIVE BOARD-STAFF RELATIONS 8. DEVELOPING FRUITFUL BOARD- . . COMMUNITY/PARENT RELATIONS 9. ENCOURAGING BOARD MEMBER MOTIVATION & ACCOUNTABILITY 10. CREATING EFFECTIVE COMMITTEES t 11. FOSTERING FUND-RAISING . ` ,s - 12. DEVELOPING EFFECTIVE BOARD SELF-ASSESSMENT �' t*_ CHARTER SCHOOLS r-- _ CREATING EFFECTIVE i GOVERNING BOARDS INTRODUCTION The ability of a charter school to carry out its mis- Wisconsin.Created with funding from the Annie sion depends heavily upon the strength of its E. Casey Foundation, the guidebook is designed governing board. An effective board provides to help prepare and sustain board members to strategic direction for the school, chooses and lead an autonomous public school. nurtures strong school leaders, and ensures the school's financial and legal soundness. For a The much more extensive guidebook, available charter school to succeed, it must form a board online at that is committed to the school's mission, pos- sesses substantial leadership skills and expertise, details governance principles and concepts, sets policy that guides the school's work, and models of best practice, and essential resources. evaluates both the school and itself with an eye This overview of the larger guidebook summa- toward continuous improvement. rizes twelve critical challenges that charter school developers must meet to build and main- Assembling and mobilizing a group of individu- tain an effective charter school board. Following als to carry out these responsibilities is a daunt- each challenge is a set of issues that boards may ing task, requiring commitment, careful plan- encounter along the way, and a discussion of ning, and wisdom. In response--by building on possible strategies. At the conclusion of the dis- the best of the nonprofit,district,charter and pri- cussion of each challenge is a list of some of the vate school governance training and resources-- numerous resources available in the larger online the Charter Friends National Network offers guidebook and elsewhere. Creating an Effective Charter School Governing Board, written by Frank Martinelli, with the Center for Public Skills Training in Milwaukee, 1 ....... .... _...... - _... ...... .- CHALLENGE 1 : T' q BUILDING THE FOUNDATION i . • r j An effective governance model requires :. ......... .. that everyone is clear and in agreement t about their roles and responsibilities. With that in mind, the board developer's _ initial challenge is to clearly define the ti { '# board's roles, responsibilities and { — a philosophy of governance. Ak a y4 ISSUES STRATEGIES Charter schools have been plagued by a Many of these problems arise when there variety of fundamental governance prob- is a lack of clarity regarding roles and lems, including: 1 responsibilities between the board and p staff of the charter school. However,all of • meddlesome boards who become these problems are preventable. Several entangled with issues normally steps can be initiated early in the board- entrusted to administrators or building process to institute effective teachers board practices. ....... .... • unstable leadership by founders who prove better at articulating Be clear and in agreement about roles and a vision than at actually running responsibilities. '0- quires a school An effective governance model re • internal dissension, often exacer- clear and detailed descriptions of the bated by insufficiently clear roles and responsibilities of the board, its division of roles and responsibilities committees, its officers, and staff. The • lack of professional competence National Center For Nonprofit Boards * " in financial, managerial, or admin- has developed the following list of the istrative areas, basic roles and responsibilities of a non- • difficulty in balancing input from profit board of directors which can serve various stakeholder groups, and as a guide for charter school governing • exhausting volunteers (including boards as well:2 r'-�� boardmembers)by expecting too much of them. •� IPWILOW 1 Grignano,Chen.ie, Guidance for Charter School Operators,Charter Schools Project,Duquesne University,1999. (. 2 Ingram,Richard T.,Basic Responsibilities of Nonprofit Boards,National Center for Nonprofit Boards,1996. - -"' R-('°• '� I 2 • determine the charter school's mission and purpose • select the charter school administrator • support the charter school administrator and review his or her performance • ensure effective organizational planning • ensure adequate resources • manage resources effectively • determine and monitor the charter school's programs and services • enhance the charter school's public image, and • assess its own performance. Create a strategic plan for growth in school and board development. Charter school developers will need to plan for the orderly transition from the emerging or planning stage—when volunteer founders do most of the work—to the growth or operational stage of devel- opment—when founders take on new roles as staff,teachers and/or board members.According to the Northwest Regional Educational Laboratory(NWREL)Charter Starters Leadership Training Academy, the following are some questions that are important to consider: 3 • What is the relationship between founders, the board, and day-to-day operators? • Do all the founders want to remain involved in the school and if so, do they want to serve on the governing board, as non-board school volunteers, or as members of the paid staff? • Hmv will new board members be recruited as some or all founders leave the governing board in the future? • What skills and areas of expertise are needed in different stages of development? • Will the board be able to maintain the workload of a committee of the whole or will the board need to establish standing committees as the school gro%vs? • Hovv will the board transition from operational/managerial tasks to governance,policy and strategic planning? ,i f 3 Northwest Regional Educational Laboratory(NWREL),Charter Starters Leadership Training Academy Workbook,1999. Module 4:Management and Governance,1999. Visit www.nwrel.org. 3 Learn More about Building the Foundation 1 Full Resource Guide www.uscharterschools.org/gb/governance/ L Tools Available in Online Resource Guide Sample Articles Of Incorporation For Charter Schools That Are Separately Incorporated Nonprofit Organizations Bylaws Checklist Sample Bylaws Charter School Board Governance Framework Chart The Annual Board Development Sequence Chart Additional Resources for Defining Board Roles, Responsibilities, and Governance Philosophy Carver,John,Boards that Make a Difference:A New Design for Leadership in Nonprofit and Public Organizations. Jossey-Bass, 1990. Carver, John, Reinventing your Board. A Step-by-Step Guide to Implementing Policy Governance.Jossey-Bass, 1997. Chnit, Richard, How to Help Your Board Govern More and Manage Less. National Center for Nonprofit Boards, 1994. Gardner, Laurie and Premack, Eric, Charter School Governance Toolkit, First Edition, Charter Schools Development Center, 1999. [Section 1 includes a selection of sample foundation documents (bylaws and articles of incorporation that can be adapted to meet your charter school's specific needs).] Ingram, Richard T., Basic Responsibilities of Nonprofit Boards, National Center for Nonprofit Boards, 1996. Mathiasen, Karl, Board Passages: Three Key Stages in a Nonprofit Board's Life-cycle, National Center for Nonprofit Boards. (This publication is probably the only one that focuses in detail on how to understand, anticipate and manage Founder's Syndrome.) Zeitlin,Kim Arthur,and Dorn, Susan E., The Nonprofit Board's Guide to Bylaws:Creating a Framework for Effective Governance, National Center for Nonprofit Boards. (This publication contains advice on the pros and cons of common bylaw language, a checklist of elements bylaws should contain as well as sample language.A diskette is available with 11 complete sample bylaws that can be easily adapted to meet your needs.) . ... ... _..... ...... .. _ ... ... ... .. ...__ .._.. _ _. ... ..... ... .. ...... ..._....... ... ... ... ...... .. ..... ... ... ... .. ... .... _. ... .... ... ... .. 4 r i CHALLENGE 2 : a P - % IDENTIFYING AND RECRUITING BOARD MEMBERS f . The next challenge that faces charter school board developers is determining how to recruit board members who are committed to the school j l and possess the skills, knowledge and other f1 i attributes needed in order for the board to effec- tively carry out its responsibilities. ...... .... . ISSUES Most board performance problems can be school's board leadership needs, ensure traced to the casual or haphazard way involvement from the best qualified indi- that some charter schools go about viduals to fill those board leadership recruiting, selecting and orienting board needs, and create a solid orientation members. Common problems include: process for new board members. • a temporary nominating commit- tee that often relies on whoever is The development of an effective recruit- available from a relatively closed ment and nominations process could take "circle of friends and supporters" the following course: already known to the organization or the committee members,and 1. Establish a board development committee. �� •r • a narrow and ad hoc recruitment 2. Prepare for active board member " process which can result in a recruitment. a quickly assembled board that 3. Develop a profile of the current lacks diversity and balance in the charter school board. critical areas of finance, manage- 4. Determine strategies to build board ment, and administration. diversity. =........ 5. Develop an initial list of prospective r STRATEGIES board members. j 6. Contact top recruiting prospects. Having an effective board recruitment 7. Schedule and conduct orientation {. sessions with prospective board and nominations process in place is the members. first, and by far the most important, g_ Select new members to the board. board development practice. While it is time-consuming, instituting a recruit- ...__-.. ment and nominations process from the start, rather than approaching the task as an ad hoc activity, will result in a more accurate assessment of the charter 5 :1 A. Learn More about Identifying and Recruitin g Board Members Full Resource Guide 1 www.uscharterschools.org/gb/governance/ L Tools Available in Online Resource Guide Invitation Letter And Packet Position Descriptions For Individual Board Members Prospective Board Member Application Form Board Profile Worksheets Additional Resources for Board Recruitment Board Member Orientation. Published by Aspen Publishers, Inc. (In spite of the title, this publication includes a number of sample forms and documents useful in every step of the board recruitment process. As an added feature, all of the forms and worksheets in the manual are available on a diskette.) Building Board Diversity,by Jennifer At Rutledge. Published by the National Center for Nonprofit Boards. (This publication provides a comprehensive approach to developing and implementing a plan to build a board that is more diverse and inclusive. One of the few resources of its kind, it includes a number of worksheets.) 6 CHALLENGE 3 : •�� ` � ■ate... A ORIENTING AND TRAINING 1 BOARD MEMBERS A central challenge of governance is to help ' charter school board members acquire the r ' skills and knowledge they need to be effec- tive leaders and decision-makers. ISSUES - Because charter school board members Assess the orientation and training are likely to come to their positions with needs of board members. very different perspectives on their roles In order to learn what new board mem- and responsibilities, as well as the mis- hers really need from the orientation and sion,vision,major goals,and strategies of training program,past and current board the charter school, the lack of an effective members can be asked the following orientation and training program can question: "What do you know now that {� cause several problems, including: you wish you had known when you first • internal dissension and division joined the board?" Their responses can be of the board into various factions used to develop the core curriculum. • inability of new board members to Create a board member manual. �= fully function in their roles The written board member manual is an -_ . .. • lack of productivity, and indispensable tool in the orientation and • a general sense of personal dissatis- training of board members — both cur- faction. rent and new. The board manual is never a substitute for face-to-face interaction, STRATEGIES but without it, effective orientation and - Ito training is made much more difficult.The Develop a long-term orientation board manual will be a reference used in strategy. new board member orientation,as well as There must be a commitment to develop- ongoing board training and education, ing a well-informed board, one with the and it will help to ensure efficient orga- knowledge needed to lead an effective nization and access to these materials. charter school. Providing new board Develop a variety of orientation/train- members with the information they need ing strategies. to perform effectively is the next critical New board member orientation and step in developing strong leadership for ongoing board education training pro- the charter school. grams are obvious ways to educate your Consider developing a Iona-term orienta- board members.However,you may want tion strategy that is thorough,provided in to consider incorporating training into a timely manner, and follows the board each board meeting,providing mini-sem- members from the recruitment stage, inars on special interest topics, helping through the first three months, and set up study groups, and providing beyond. access to publications and conferences. , N .......... ... t a 7 r- f - Learn More about Orienting and Training Board Members 1 Full Resource Guide 7.- L www.uscharterschools.org/gb/governance/ Tools Available in Online Resource Guide Sample Board of Directors Handbook Table of Contents Sample Board Member Orientation Outline Parliamentary Procedure Overview Additional Resources for Board Orientation and Training Board Member Orientation. Published by Aspen Publishers, Inc. (This publication includes a number of sample forms and documents useful in every step of the board orientation process.As an added feature, all of the forms and worksheets in the manual are available on a Macintosh and IBM compatible diskette.) How Do We Keep Board Members Informed?National Center for Nonprofit Boards. Go to: Click on "Frequently Asked Questions". 8 r, CHALLENGE 4: T=_ _ MAKING EFFECTIVE DECISIONS As the board of an independent public school (in many cases also a separately ' incorporated nonprofit organization) the i F. charter school board is the source of all rY authority—much of it delegated to others j —and has the ultimate responsibility as a .. result. Therefore it is critical to the suc- cess of the charter school that the board makes effective decisions. A ' ISSUES Develop a decision-making flowchart. }`.. It will be very helpful to have a written A board that meets monthly for two description of the decision-making process hours has only 24 hours a year in which the board intends to use. This approach to make a number of major decisions and still have time to address unforeseen reflects clarity about who is responsible for issues and challenges. Without aframe- what. The flowchart offers visual details about where issues may originate from, work for making decisions,problems can `,,here issues can be delegated to, how often arise, including: issues are to be dealt with, and how • confusion and lack of agree- actions and recommendations are to be ment about who decides what made. ...- . • lack of ownership of tasks,and • time-consuming duplication of Use a decision matrix. efforts. The purpose of a decision matrix is to define the authority and decision-making , roles and responsibilities of the board STRATEGIES clearly in relation to the authority and decision-making roles and responsibilities There are several tools that can be used to of other groups and constituencies within 4X increase the effectiveness of board deci- the charter school. The matrix identifies sion-making decisions needing to be made in a number of broad categories such as: school goals, Create a board policy manual, curriculum and instruction, personnel, Staff members need to be clear about staff development, communication, bud- what they are supposed to implement get, assessment and evaluation, record- and board members should not have to keeping, and school culture. For each of reinvent similar policies over and over these decision categories, the matrix then again. Therefore, board policies should specifies: the decision to be made; who r _ be kept organized and accessible.For this should decide; who should recommend; reason, it is advisable to have a written who should be solicited for input; who board policy manual in which all the should be informed; and which decision- policies the board adopts are maintained. making process should be followed. 9 Use an executive committee to help facilitate can regularly refer to the organizational dash- decision-making. board for information about how well the school Another critical element in effective decision- is doing relative to its critical success factors. In making is a functioning executive committee. this way, corrective action can be taken before— The executive committee facilitates effective not during or after—a crisis erupts. decision-making by the full board by playing the following three critical roles: planning the agen- Provide board members with a board book and da of board meetings, making decisions on other timely communications. behalf of the full board, and serving as a com- An effective way to provide board members with munication link with other members of the needed information in a timely manner is board. through a written"board book"or board member packet that goes out before board meetings. The Utilize consent agendas. book may include outlines of significant devel- To expedite business at a charter school board opments, an updated copy of the organizational meeting,the board can approve the use of a con- dashboard,an agenda, minutes from other meet- sent agenda that includes those items considered ings,executive summaries of accompanying doc- to be routine in nature. Full information about uments, etc. In addition, consider using your these items should be provided to the board in website and email for distributing information advance in the board packet and any questions between board meetings. or concerns can be directed to the makers of the motions and answered prior to the meeting.This 4 chair,Richard,Holland,Thomas,and Taylor,Barbara, Improving the process allows thorough examination of routine Performance of Governing Boards,Oryz Press,1996. items without using up precious board meeting time. Any item that appears on the consent agenda may be removed from the consent agen- da by a member of the board. The remaining items will be voted on by a single motion. Create an annual calendar of major board decisions. r' Another tool that can help charter school boards maintain their focus on governance policy and critical emerging issues is an annual calendar of { major decisions. Major decisions(such as setting �i the annual budget,setting goals,and selection of new board members) can be scheduled on an annual basis, allowing other decisions and work to be scheduled in a timely manner.This can also facilitate decision-making by the board's com- mittees and help the charter school administra- tor organize his or her priorities. Display an organizational dashboard. Another tool that can be used to increase the effectiveness of board decision-making is the "organizational dashboard."4 The dashboard dis- plays up-to-date information about key success factors of the charter school—the most essential areas of performance. Once the critical success factors have been identified, the board and the charter school administrator (and other key staff) can then propose and consider strategic performance indicators — the qualitative and quantitative data that most accurately measure and convey the critical areas of performance. As the "dashboard" metaphor implies, the board 10 '` ►� Learn More about Making Effective Decisions Full Resource Guide 1 www.uscharterschooIs.org/gb/governance/ Tools Available in Online Resource Guide Flow Chart: How Board Decisions Are Made Executive Committee/Board Meeting Planning Form Questions Before flaking Sound Decisions Sample Board Meeting Agenda Decision-making Matrix Board Communication Plan Policy Development Steps Board Meeting Evaluation Form Sample Board Operations Calendar Additional Resources for Board Decision-making and Meetings Sample Board Policies in Critical Areas: conflict of interest,enrollment, etc. See the following websites: • Independent Schools Association of the Central States at www.isacs.org;click on"Monographs", then scroll down and click on"Board of Trustees"and "Business Operations"for sample policies. • Also see Minnesota Council of Nonprofits management resources at • Also see the Free Management Library of The Management Assistance Program for Nonprofits(MAP) at Fletcher,Kathleen,The Policy Sampler,National Center for Nonprofit Boards, 2000. Contains a diskette with over 70 policies covering critical areas such as conflict of interest, grievances, sexual harassment, nepotism, confidentiality and more. Comes with printed user guide. Gardner, Laurie, Charter School Governance Toolkit,First Edition, Charter Schools Development Center, 1999. (Section 2 includes a good selection of sample policies that can be adapted to meet your charter school's specific needs.) Smoley, Eugene, Effective School Boards,Jossey-Bass, 1999. 11 1 ........ .. _ ...... .. . ... CHALLENGE 5 , STRATEGIC PLANNING AND THINKING The charter school board has a critical role to ' / play in strategic planning. Charter school u �� ®o j board developers need to determine how the F. v board can organize itself in order to function ----- as an effective, future-focused leadership team. ISSUES There are a number of factors that pre- Develop a shared vision of the vent boards from thinking and planning organization's future. strategically. The following factors can A key strategic planning question for the serve as barriers to visionary charter board is: "If we could create the charter 1qY P. school board leadership: school of our dreams that will have the a impact we most desire, what would that • shortage of time look like?" The board's answer to this • avoidance of risk-taking question captures the organization's • micro-management vision. • lack of knowledge in an increas- ingly complex world, and Keep up with the rapid pace of change. • lack of clarity about board-staff Another strategy for nurturing visionary roles and responsibilities. leadership is to help the board keep up with the rapid pace of change. Provide �~ ate. STRATEGIES information that helps the board think about these key questions: What external There are several strategies that you can changes and trends will have the greatest employ to help your board adopt a impact over the next three to five years on _...... . ..... visionary leadership style. the charter school and the children and �-.. families it serves. How can the charter Focus on the ultimate ends of the school effectively respond to these changes 0, organization. and trends? How are other schools and Board members should concentrate on organizations serving youth responding to the charter school's ultimate ends rather these changes and trends? the day-to-day means.5 Board members should focus on the mission,vision,goals Stay in touch with the changing needs of your"customers:' and strategies contained in the strategic ?' The fifth strategy for transforming the plan, leaving the daily management to the staff and charter school administra- leadership style of the board is to provide tor. members with information to enable them to stay in touch with the changing needs of Create a long-range plan for the children and families served by the charter n._ development of future board leader- school—now and in the future. Key ques- _ ship. tions include: What do our constituents, In contrast to the typical short-term primarily children and their families recruitment process that focuses narrow- enrolled in the charter school, think of the ly on filling anticipated charter school organization? What is their perception or t: board vacancies for the current year only, image of the charter school?What are the boards need a long-range plan for devel- most important future needs and service oping future leadership. Such a long- expectations of the charter school on the term plan centers on the following ques- part of our constituents? tions: Who will be serving on and lead- ing the board over the next three years? - What is our plan to scout board leader- s Carne, john, Boards That Make a Difference, 2nd Ed., ship talent for the future? Jossey-Bass,1997. 12 �aoo Learn More about ° Strategic Planning and Thinking 1 �- Full Resource Guide L Iwww.uscharterschools.org/gb/governance/ Tools Available in Online Resource Guide Description of Strategic Planning Model Strategic Planning Committee Description Strategic Planning Information Gathering Worksheets Critical Issue Worksheet Worksheet: Foremost Critical Issues Facing the Charter School Sample Strategic Planning Timetables Additional Resources for Strategic Planning Allison,Alichael,and Kaye,Jude, Strategic Planning for Nonprofit Organizations, New York: John Wiley&Sons, Inc., 1997. Barry, Bryan W., Strategic Planning Workbook for Nonprofit Organizations, Revised, Saint Paul, Minnesota:Amherst H. Wilder Foundation, 1997. Bryson,John M.,and Alston,Farruun K., Creating and Implementing Your Strategic Planning, San Francisco:Jossey-Bass Publishers, 1996. Bryson, John M., Strategic Planning for Public and Nonprofit Organizations, Revised, San Francisco:Jossey-Bass Publishers, 1995. Hundley DeKuyper, Alary, Trustee Handbook: A Guide to Effective Governance for Independent School Boards, National Association of Independent Schools, 1998. (Especially useful is Chapter 4-"Developing a Shared Vision and Planning Strategically".) McNamara, Carter, PhD, Facilitator's Guide to Nonprofit Strategic Planning, Minneapolis, Minnesota:The Management Assistance Program, 1997. O'Connor, Judith, The Planning Committee: Shaping Your Future, National Center for Nonprofit Boards, 1997. 13 ....... ....... _ .............. ........... CHALLENGE 6 gip : { � ti CARRYING OUT LEGAL AND i FINANCIAL RESPONSIBILITIES All charter school developers and opera- tors face complex legal issues in starting and running their schools.Charter board 4 developers need to learn the best possi- ble ways for the charter school board to { 0 carry out its legal and financial oversight ram, responsibilities. �- ISSUES As a relatively new phenomenon,charter of the school. As such, the board must schools involve legal requirements and actively exercise oversight functions in 1�' responsibilities which not only differ four governance areas: corporate law, widely from state to state,but which may internal policies, and procedures/con- also change over time. The following are tracts with third parties; local, state, and just some of the issues that can mire federal laws/regulations; the charter F f boards into prolonged bouts of putting school's financial resources,facilities,and out fires, being reactive, rather than for- equipment;and risk management. Board ward-thinking and proactive: members must be well-informed about all four areas, know how to monitor the • conflicts of interest organization's financial position, and . + • uncertainty regarding whether an understand their roles versus board and appropriate education is being committee roles in the oversight responsi- provided to all students (especially bilities. special education children), and ' *' • unresolved fiduciary and legal Implement a conflict of interest policy. = matters. When the personal or professional con- cerns of a board member or a staff mem- Charter schools are operating under ber affect his or her ability to put the wel- intense public scrutiny. Powerful forces fare of the charter school before personal opposed to charter schools continue to benefit, a conflict of interest exists. The '-- raise questions about the legitimacy of charter school board should institute a the movement,making it critical for char- system of checks and balances to circum- r: ter school boards to pay special attention vent actual or potential conflict of inter- est, beginning with well-defined o erat- to carrying out their legal and financial . in policies on all matters that might lead . � responsibilities. g P h g to conflict. Most importantly, create a J STRATEGIES carefully written conflict of interest policy that includes three essential elements:full Educate board members about their disclosure; board member abstention legal and financial responsibilities. from discussion and voting; and, staff p, Board members of the charter school are member abstention from decision-mak- the ethical, legal and financial stewards ing. " 14 Implement a risk management process. Risk management is a way to minimize uncertainty by identifying real and potential risks (such as tax penalties, malpractice, and injury) facing the charter school, and taking steps to manage them. The structure of the risk management process consists of the following five steps: identifying potential risks; analyzing identified risks; selecting the most suitable techniques for eliminating or reducing identified risks; implementing the selected techniques;and,monitoring the effectiveness of the tech- niques,modifying as necessary. Arrange for regular financial audits. To ensure that there is progress in achieving the board's financial goals, that the school is adhering to sound financial policies, that the resources of the school's resources are safeguarded, and that the school is complying with regulatory provi- sions, the board should arrange for a financial audit to be conducted by a licensed " independent auditing firm at least once annually or as otherwise required. Develop special education policies prior to opening the school. Charter school boards have a responsibility to ensure that schools receive the fund- ing,information, and support systems to create special education programs and ser- vices. Some of the issues needing to be addressed by policies developed by the board include,but are not limited to, the following: 1.What is the philosophy of the school toward students with disabilities? 2.How will staff identify and serve students with special needs? 3.Who is responsible for serving students with disabilities? 4.What steps must charter schools take to ensure that appropriate services are provided to students with low-incidence disabilities? 5.Who pays for the services? How will transportation needs be met? 6.What personnel certification and licensure issues need to be considered? 7. Can charter schools serve only students with special needs?6 6 butge,Cheryl Al.,Charter Schools And Special Education:A Handbook. ' MATH SCIEhIGE f ..HISTORY READING 15 Learn More about Carrying Out Legal and Financial Responsibilities Full Resource Guide www.uscharterschools.org/gb/governance/ Tools Available in Online Resource Guide Conflict of Interest Policy Samples Board Member Annual Disclosure Statement Concerning Possible Conflict Of Interest Sample Board Confidentiality Policy Sample Board Liability Questionnaire Additional Resources for Understanding Board Legal and Financial Issues Bahcock, George acrd Tremper, Charles, The Nonprofit Boards' Role in Risk Management: More Than Buying Insurance, National Center for Nonprofit Boards, 1990. Dalsimer, John Paul, Understanding Nonprofit Financial Statements: A Primer for Board Members, National Center for Nonprofit Boards, 1996. DeKuyper, Mary Huudley, Trustee Handbook: A Guide to Effective Governance for Independent School Boards, National Association of Independent Schools, 1998. Gardner, Laurie, Charter School Governance Toolkit, First Edition, Charter Schools Development Center, 1999. Herman,Mclmrie L.,and White, Leslie T., Leaving Nothing to Chance:Achieving Board Accountability through Risk Management, National Center for Nonprofit Boards and Nonprofit Risk Management Center, 1999. Johnson, Sandra L., The Audit Committee: Key to Financial Accountability in Nonprofit Organizations,The National Center for Nonprofit Boards, 1995. Krrrt7 Daniel L., How to Manage Conflict of Interest: a Guide for Nonprofit Boards, National Center for Nonprofit Boards, 1995. Lange, Cheryl Al., Charter Schools And Special Education: A Handbook. Go to: _.n . Leifer, Jacqueline C., Glomb, lllichael B., The Legal Obligations of Nonprofit Boards: A Workbook for Board Members, National Center for Nonprofit Boards, 1997. US Charter Schools Website contains legal issues page and links to other resources and sample docu- ments at i' US Department of Education Website contains additional information and resources on special edu- cation at 16 CHALLENGE 7 DEVELOPING EFFECTIVE BOARD-STAFF RELATIONS The selection and support of the charter k school administrator is one of the most t� critical roles and responsibilities of the - board. With that in mind, charter school board developers must help the boards build and maintain an effective, mutual- ly supportive working relationship with the charter school administrator. ISSUES Common problems in the area of board- Create a chart detailing by major areasfY'`4 staff relations include: of organizational decision-making (finance, planning, personnel, etc.) the • conflicts over responsibilities specific responsibilities of the administra- • board member perceptions that for and the board of directors. the charter school administrator is ..... over-stepping his or her authority Negotiate a communication plan • staff withholding information from between the board and administration the board about how much information is desired, • administrator perception that the the best ways to share information,and in board is not doing enough, and general, how to maintain effective com- .� • amicro-managing board. munication with each other. Develop an administrator performance STRATEGIES review rocess that evaluates the admin- *' p istrator on negotiated performance objec- There are a number of tools and practices tives, and that is adapted to meet the spe- that can be used to strengthen the rela- cific needs of the school and your partic- tionship between the board and the ular governance structure. * 'P. administrator. .... - Develop conflict resolution policies Implement an effective hiring/selection which include details about what situa- process for the charter school administra- tions require professional mediation and tor. when conflict situations should be dele- gated to personnel or executive commit- Create written job descriptions for board tees. members and the administrator,detailing position requirements and responsibili- r tAlies: 17 tr _� Learn More about , . 0000 Developing Effective Board-Staff Relations 1 Full Resource Guide I www.uscharterschools.org/gb/governance/ .IT Tools Available in Online Resource Guide Division of Roles between Board and Administrator Board And Staff Roles Worksheet Sample Job Descriptions For The Administrator EXCEL Principal Evaluation Form Principal Evaluation Form Board Staff Time And Attention Graph Should Staff Serve on the Board? Additional Resources for Building Board-Staff Relations Pierson,Jane,and Mintz,Joshua, Assessment of the Chief Executive, National Center for Nonprofit Boards, 1999. Visit (This publication includes a diskette containing an assessment tool for annual reviews.) _ _. ... . ... .. ...... .. .. ... _. .. .. _. .. .. .. ._._ _.. .. 18 > r jF CHALLENGE 8 DEVELOPING FRUITFUL BOARD- 3 COMMUNITY/PARENT RELATIONS -% The eighth challenge focuses on the board forging strong relationships with parents and community members. The - -- �' charter school board can play a critical ; role in developing partnerships and col- ' E laborations that tap the resources of the community, enhancing the school's capacity to meet the educational needs of s its children. - ISSUES =' Common barriers to healthy commun- Listen to parents and community mem- ty/parent and board relationships bers. -,� include: Send out surveys to solicit input before : *K major policy decisions,host regular infor- • board members and school staff ma opportunities to meet and hear con- cerns,the convene a series of community Y e forums to discuss challenges to the char- day-to-day tasks of educating ter school, write personalized letters to children that the overlook the y major donors, and organize personal value of involving families and interviews with leading family service community agencies to develop collaborative pro- • parents who may not be used to grams. being active participants in their children' schools, and Use advisory groups of parents and • communi members who may community members. community Y Groups of parents and community mem- be unaware of a charter school's bers can be convened to help raise money, ,r mission and educational pro- serve as advocates for the charter school ' grams and the important role that to the community,provide feedback from they can play in efforts to suc- the community, and provide a means for cessfully educate the communi- involving people who are willing to give ty's children. technicapassistance. A Develop a community planning process STRATEGIES for raising student achievement. Building relationship with parents and Use engagement strategies for involving g. P P parents and the community in planning " community is a two-way street. The several key student achievement-related board will first need to listen to parents areas (assessment process, student Stan- and the community, and communicate dards, etc.). Strategies might include _ and report to them about the charter holding community forums to discuss + school. There are several activities that what standards should be set for your r. board members can participate in to pro- students and including community mem- : mote parent involvement and communi- bers in regular reevaluation of the ty collaboration. Activities include: school's student achievement vision. e . 19 r� Learn More about Developing Fruitful Board- Community/Parent Relations Full Resource Guide www.uscharterschools.org/gb/governance/ ld Tools Available in Online Resource Guide Nlodel Parent/Family Involvement Policy Plan for Parent and Family Involvement Sample Advisory Committee Description Sample Parent Involvement Policy �Vhy The Board Should Consider Volunteer Issues Additional Resources for Building Parent and Community Relations Arsenault,Jane, Forging Nonprofit Alliances,Jossey-Bass, 1998. Axelrod,Nancy R., Creating and Renewing Advisory Boards: Strategies for Success, National Center for Nonprofit Boards, 1990. Calfee, Carol, Wittwer, Frank, and Meredith, Minn', Building a Full-service School: a Step-by-step Guide, Jossey-Bass, 1998. (This publication includes diskettes wit numerous planning forms and worksheets) Creating Family Friendly Charter Schools Guidebook,another Making Connections technical assis- tance product offered by the Annie E. Casey Foundation and the Charter Friends National Network. Dryfoos,Job G. Full-service Schools,Jossey-Bass, 1984. Leadership for Student Achievement: A Board of Education Framework(Go to: ;;.Click on"Key Work of School Boards"). National Association of Partners in Education, Inc. Business And Education: a Practical Guide to Creating and Managing Business/Education Partnerships, 1990. National Association of Partners in Education, Inc.,Organizing and Managing School Volunteer Programs, 1987. PTA Family Involvement Standards, Go to Racklnani, Neil, Frnedinain, Lawrence,and, Ruff, Richard, Getting Partnering Right, McGraw-Hill, 1996. Sample Contracts with Parents(US Charter Schools website at Stern, Gard J., Marketing Workbook for Nonprofit Organizations: Mobilize People for Marketing Success,Amherst H.Wilder Foundation, 1997. The National Asseinhly,The Community Collaboration Manual,The National Assembly, 1993. U.S. Departnnent of Education Office of Educational Research and Innprovennent, Reaching All Families: Creating Family-Friendly Schools, 1996. 4L7iner,Michael and Rap,Karen,Collaboration Handbook:Creating,Sustaining and Enjoying the Journey, Amherst H. Wilder Foundation, 1992. _.. _. .. _ .__. .. _ ... _ ....... .. _..._. .. ... ... .._... ..._ .. .. .__.. .. ... .. .. ._._. .. 20 r- _............. .......... ....... .. ....... . ._ . .. _....... . � 4 CHALLENGE 9 " ENCOURAGING BOARD MEMBER. i MOTIVATION AND ACCOUNTABILITY i■ Encouraging long-term commitment and maintaining high-performance of charter school board members can I- be an ongoing challenge. Charter school board develop- ers need to consider how the charter school board can cre- ate an environment that fosters and maintains a high level of board member motivation and accountability. :....... .... ISSUES Board members offer their time, skills, Develop an ongoing recognition knowledge, energy, and commitment. program. But their service is part of a larger mutu- Recognition of board members is one of ally beneficial relationship as they the most powerful motivational strategies receive an opportunity to serve an orga- to encourage commitment and high-per- nization they believe in,a chance to learn formance in the future, and is well worth new skills and acquire new knowledge, the extra time and effort. Show apprecia- an opportunity to be around people that tion often and in informal and formal share the same values, and the opportu- ways. Make it appropriate to perfor- pity to forge strong personal and profes- mance, meaningful, public, and fun. sional connections. Several problems Recognition can take place in many forms s may result if this two-way transaction – notes, emails, plaques, awards, prizes, breaks down including: etc. • board members may stop con- Use board members' skills and add to tributing their knowledge base. • board actions and board mem- Involve board members in areas where . ..... ber values may become mis- they feel they can use their skills and aligned, and knowledge and add real value. Make • a general sense of dissatisfaction training opportunities available to board on the board. members to increase skills and know- ledge. STRATEGIES Put into place an annual board self-eval- uation are several tools that can be uti- program. lized to maintain and increase board Developing a process that allows the f '' member commitment and performance. board to step back and look at itself will provide feedback on individual and group Align the board members with the performance, and help develop corrective organization. action strategies. There are several self- Once again, the key to motivation and evaluation tools that are ready-made, or accountability has its roots in the early you can develop your own self-evaluation nominations and recruitment process — process. when interviewing prospective board members, it is important that there is a Develop individual accountability solid initial match between the board contracts. ...,...,..... member and the organization. Ask ques- Determine strategies for holding board ' tions that help you understand candi- members accountable for attendance,con- dates' interests and motivations in sere- tribution of expertise,willingness to make .� constructive comments during meetings, ing as a board member of your school.Be and representation of the charter school sure that they understand the challenges ... " and requirements of board service, and board in the broader community. ,S help them determine if service on the board will meet their needs and align with their interests, values, and beliefs. 21 Learn More about baoado\� Encouraging Board Member Motivation and Accountability 1 Full Resource Guide �- IL y www.uscharterschooIs.org/gb/governance/ Tools Available in Online Resource Guide Board Self-evaluation Questionnaire Individual Board Member Self-Review Form Board Leadership Succession Process Additional Resources For Board Member Motivation and Accountability Wolfe, Rebecca Lulus, Systematic Succession Planning, Crisp Publications, 1996. __.. .. ......_ ........... ._ _ _ _ .. . ... .. _ _.. . _. ... .. ....... _.. ........ ...._. .. .. _ .. ..__..... .... 22 _ ........... . .. _..._...... . _......... CHALLENGE 10 CREATING EFFECTIVE COMMITTEES _.. _ •.-tea? r Committees are indispensable — they do the bulk of the work of the charter school board, freeing the full board for attention to matters like responding to emerging critical issues, strategic planning, major .i policy development and long range finan- cial planning. Charter school board devel- opers need to develop strategies for help- ing the board to design and maintain a }. committee structure that enhances its over- J1 I all effectiveness. Aft At i; a ISSUES Z<`,! Typically committees don't work well for are the committee responsible for and many of the same reasons boards don't who among our members and supporters function effectively,including: possesses the skills and experience need- ed to complete those tasks? As is the case • the lack of long-term agendas with other forms of volunteer recruit- - aa° • reliance on poor or incomplete ment, every effort should be made to information, and match the needs and requirements of the • the failure to distinguish between committee and the skills, knowledge and board level and operational interests of prospective committee mem- issues. bers. STRATEGIES Detail what the board expects from each committee. Develop a written committee descrip- Clearly communicate to all board com- tion. mittees what kind of reporting is expect- 1 To guide the committee chair and mem- ed and with what frequency. bers, describe what is expected of each committee, offering details about the Ensure well-run meetings. purpose of the committee, its composi- Provide for meeting space that matches tion and selection procedures, and its the needs of the group,and offer a written specific duties. meeting agenda. Make sure that commit- tee members receive an agenda in Nominate an effective committee chair. advance of meetings and have all of the Choose a board member who has rele- information they will need to complete vant content knowledge and experience, their work. and most importantly,has proven leader- ship and people skills. Provide training. = .. Schedule orientation for new committee Appoint members thoughtfully. members. Provide on-going training for Committees should be recruited with the committee members to help sharpen their following question in mind: What tasks skills. tit ............. --> 23 r Learn More about Creating Effective Committees °co Full Resource Guide 1 www.uscharterschools.org/gb/governance/ L Tools Available in Online Resource Guide Sample Committee Descriptions Sample Committee Descriptions from ISACS and/or Mosaica Academy Charter School Committee Meeting Evaluation Form Committee Chair Job Description and Committee Member Job Description Committee Preference Form (can be used with prospective board members during recruitment and annually with current board members) Annual Board Committee Report Sample Annual Board and Committee Calendar Additional Resources for Effective Committees Hirzy, Ellen Cochran, Nonprofit Board Committees, National Center for Nonprofit Boards, 1993. Visit Nvivw.ncnb.org. (The National Center for Nonprofit Boards also publishes booklets on indi- vidual committees including Audit, Executive, Nominating, Finance, Fund Development and Planning.) 24 1r. - ° CHALLENGE 'I'I Joe FOSTERING FUND-RAISING Plain and simple, many charter schools cannot meet their budgets by relying only ;J , 1 f on the per pupil allocation of public . -. .. .. . n i $� ( school financing. Other sources of funds i L-I--' ( must be tapped and among these, board driven fund-raising is one of the most .-' important. Charter school developers need to help boards to play an effective and ongoing role in fundraising. ISSUES Common problems involving board • Board members should help in members in school fund-raising include: preparing the"case,"which is the rationale for supporting the charter • few board members see themselves school, and be able to explain serving as fundraisers the case persuasively to prospec- s� tive donors. some perceive fund raising as •`" personally distasteful, and • others are unsure of their ability to • Every board member can do raise funds and see it as someone something useful to support the else's duty. fundraising effort, employing his or , her own skills and interests. 1 STRATEGIES • Motivation of board members is the most critical and the most difficult Despite such hesitations and fear, the task of all. Indifference will not raise bottom line is that board members are money.Board members and staff critical to the fund raising success of the need to be enthusiastic about the charter school. purpose of the charter school and show eagerness to be involved. r ?� There are several methods for ensuring successful board fund-raising. These Create a strong fund development com- include the following: mittee. Develop a standing committee whose Make sure that every board member purpose is to plan, organize, and build fully understands, accepts, and gives successful fund-raising campaigns. .... .... full attention to several principles: Responsibilities include: • The board is ultimately responsible for attracting funding resources to • Soliciting current board members. ensure the financial viability of the The goal of every fund develop- charter school and its educational ment committee is to get 100 per- and support programs. cent board participation. • Recruiting fund-raising volunteers, i � •Asking for and giving money are and developing and implementing natural processes and need not be viewed as something to be a program for orienting and soliciting "A avoided. funds from volunteers. JEWP_, 25 I • Developing written plans, estimated budgets, and dollar goals for fund-raising programs to be reviewed and ratified by the charter school's board. These plans, reflecting a period of at least three years,should be reviewed semi-annually for appropriate payoffs and cost/benefit adjustments. • Developing and conducting annual personal solicitation programs on behalf of the board to major donors, corporations and founda- tions that have been identified as potential supporters of the charter school. • Organizing and conducting special event fund-raising programs. • Assisting in development and maintenance of donor records and reporting procedures. • Evaluating fund-raising successes at least once a year, and making appropriate recommendations to the board for maximizing results. Offer training to support the board's fund-raising role. Many board members don't want to raise money because they don't know how. This reluctance can be countered by simply asking them if they would be willing to try if the charter school offers them support and training. Often this will increase their confidence to get involved. Create a fund development plan. The financial development plan sets goals for the charter school's income, typi- cally over a three-to five-year span, incorporating specific objectives and action steps that will help the charter school acquire and effectively use the financial resources it needs. Done properly, a good fund development plan will help the charter school take advantage of strengths,shore up weaknesses,open up oppor- tunities and diffuse threats to the charter school's financial well-being. Develop the fund-raising case. An important responsibility of the board's fund development committee is to cre- ate a fund-raising case statement. The case looks at the charter school from the perspective of the supporter, setting forth the reasons why the donor/prospect should want to contribute to your charter school. Interpreting and explaining the mission of the organization,the case essentially answers the questions why,what, who, and how. 26 Learn More about aaop` Fostering Fund-raising p�O Full Resource Guide 1L www.uscharterschooIs.org/gb/governance/ I Tools Available in Online Resource Guide Sample Fund-raising Committee Description Sample Resource Development Committee Additional Resources For Board Involvement in Fund-raising Boschee,Jerr, Merging Money and Mission: A Board Member's Guide to Social Entrepreneurship, National Center for Nonprofit Boards, 1998. The Foundation Center( r ) Brinckerhoff,Peter C., Financial Empowerment: More Money for Mission,John Wiley and Sons, 1996. DeKuyper,Mary Huudley,Trustee Handbook: A Guide to Effective Governance for Independent School Boards, National Association of Independent Schools, 1998.Take a look at Chapter 5. Howe, Fisher, Fund Raising and the Nonprofit Board, National Center for Nonprofit Boards, 1998. (.. . ) Klein, Kim, Grassroots Fundraising Journal,ChardonPress. National Association of Fund Raising Executives. Scaiilorn, Eugene A., Corporate and Foundation Fund Raising,Aspen Publishers, 1997. School Endowment: Sample Policy Statement(See the following website: Independent Schools Association of the Central States at click on"Monographs", then scroll down and click on 'Business Operations" for sample school endowment policies.) Thorton, Grant, Planned Giving:A Board Member's Perspective, National Center for Nonprofit Boards, 1999. 27 .._ .. .. .. .... _..- _..._............ .. .... . ................... . E- CHALLENGE 12 DEVELOPING EFFECTIVE ° ♦ °4 BOARD SELF-ASSESSMENT r r Because so much is riding on the effec- tiveness of the board in carrying out its ' ... ..... .. roles and responsibilities, it is important that the board spends time looking at its own performance in order to improve it. Charter school board developers will ' need to institute ahelf-assessment rocess to continuously help the board enhance tf-- - its effectiveness. Ak ISSUES Self-Assessment For Nonprofit v r Board assessment is a relatively new Governing Boards. This assessment tool practice. Resistance to instituting a self- is available from the National Center for assessment process may occur because of Nonprofit Boards (. .,. , c::`_�.. ; ), and �`� _.... two primary reasons: examines both individual board members and the performance of the board as a • evaluation of governing boards' whole. performance is not yet a com- mon practice, and Charter School Board Of Directors Self- - ' • board members may feel threat- Assessment Template. This assessment, ened and judged. available from the Charter School Development Center (•.. 1 STRATEGIES ~�'"•`''�' �"'=)� reflects basic .rules and � responsibilities of the board as well as a number of explicit references to items like Board members, even though they are compliance with state and federal laws, volunteers, want their time and skills to instruction and assessment, and terms of * ° be used well; they do not want them the school's charter contract. wasted. With the goal of board assess- ment as improvement, not judgment, Board Development Assessment Tool. boards will find great value in examining This assessment is available from the their performance, and the charter school Learning Institute for Nonprofit will benefit greatly as well. 7 g Y Organizations. It includes sections on internal procedures, operational matters There are several tools available to assess and financial management responsibili- r: a board's performance. A good assess- ties. It also includes a sample work plan ment process is based on a set of stan- for implementing the results of a board dards or best practices that characterize self-assessment. effective board performance. The charter school board can develop its own written 7 Lewis, Andrew, Board Development Assessment Tool, - self-assessment tool or use off-the-shelf The Learning Institute for Nonprofit Organizations,1999. board assessment instruments,such as: - - ; . Board Self-assessment Questionnaire. This self-assessment is also available online at the Website of the National School Boards Association 28 Learn More about Developing Effective Board Self-assessment a°o - off° • Full Resource Guide 1I WWW.uscharterschools.org/gb/governance/ Tools Available in Online Resource Guide Principles of Good Practice for Member Schools Board Governance Indicators Assessment Board Development Assessment Tool Visionary Board Leadership Assessment Exit Interview with Departing Board Members A Framework for Continuous Improvement of Charter School Board Effectiveness Sample Recommendations for Board Improvement Additional Resources for Board Self-assessment Board Tune-ups. (The Independent Schools Association of the Central States(ISACS)has prepared a collection of 13 assessment tools for the periodic tune-up of your charter school board. Topics include:Board Bylaws, Committees,Board Evaluation, Policies,Board Recruitment,Board Structure/Meeting Pattern, Contract for Administrator, Endowment Policies,Enrollment Contract, Enrollment Policies,Faculty Contracts,Administrator Evaluation,and Long-range Planning. The approach suggested is to compare the"best practices"ISACS version to your school board's version of policies and practices.All of the documents cited are available for free by downloading from the ISACS website: tc: ..•, ...i>>: s.?.; then click on Monographs, scroll down to Board of Trustees,and choose the appropriate monograph title.Alternatively, school board chairs can order from ISACS the tune-up package of all the monographs for a charge of$25.00,payable to ISACS. Charter School Governance Toolkit,First Edition, Charter Schools Development Center, 1999. [Section 4 includes a"Charter School Board of Directors Self Assessment Template." Hughes, Sandra, To Go Forward,Retreat,National Center for Nonprofit Boards, 1999. (This publica- tion includes many practical suggestions and ideas for planning and conducting successful board retreats.) Slesinger,Lam H., Self-assessment for Nonprofit Governing Boards,National Center for Nonprofit Boards, 1996. Sinoley, Eugene R., Effective School Boards:Strategies for Improving Board Performance,Jossey- Bass, 1999. Stanton,Peter,Board Assessment of the Organization,National Center for Nonprofit Boards, 1992. _.. .................. ... .... .... ... ... .... ... _.. .. 29 ACCESS MORE TOOLS FOR CHARTER SCHOOLS Guidebooks Available on Creating an Effective Charter School Governing Board, Personnel Policies & Practices, Creating and Sustaining Family Friendly Institutions, and Mobilizing and Motivating Your Staff to Get Results. These guides can be accessed online at?r.f. :; . .• .. r .':;,'r t:'r- _ :i"_:-. ; r;r The Charter Friends National Network has a limited number of print summaries of the documents available. To request a copy of one, or all four, please send an email to info@charterfriends.org. ABOUT THE SPONSORING ORGANIZATIONS The Annie E. Casey Foundation is a private charitable organization dedicated to helping build better futures for disadvantaged children in the U.S.Recognizing that strong families and strong neighborhoods are interdependent, the Casey Foundation is supporting broad strategies for neighborhood development and family transformation in twenty-two urban communities around the nation through its Making Connections initiative. For more information about the Annie E. Casey Foundation and the Making Connections initiative visit the web- site or contact: The Annie E. Casey Foundation Tel: (410) 547-6600 Email:webmail @aecf.org Web: The Charter Friends National Network (CFNN)is a project of the Minnesota-based Center for Policy Studies in cooperation with Hamline University. Founded in early 1997, CFNN's mission is to connect and support state- level charter school organizations- mainly non-profit resource centers and associations of charter school opera- tors. Charter Friends National Network: 1745 University Avenue, Suite 110 St.Paul,MN 55104 Tel:(651)649-5479 • Fax: (651)649-5472 Email: info @charterfriends.org Web: OTHER RESOURCE GUIDES AVAILABLE FROM CHARTER FRIENDS NATIONAL NETWORK: ❑ Charter School Accountability: A Guide to Issues and Options for Charter Authorizers ❑ Charter School Facilities:A Resource Guide on Development and Financing • Charting a Clear Course:A Resource Guide for Charter Schools Contracting with School Management Organizations • Employer-Linked Charter Schools:An Introduction • A Guide for Developing a Business Plan for Charter Schools ❑ Thinking About a Pre-existing Comprehensive School Design ❑ Out of the Box:An Idea Book on Charter School Facilities Financing ❑ Paying for the Charter Schoolhouse: Policy Options for Charter School Facilities Financing ❑ Shaping an Accountability Plan for Your Charter School 30 Basic Principles of Policy Governance condensed from. John Carver & Miriam Mayhew! Carver Guide Series on Effective Board Governance Policy Governance is a fundamental redesign of the role of a board, emphasizing values, vision and the empowerment of both board and staff. It is built on ten principles: The Trust in Trusteeship Boards exist to own an organization on behalf of some identifiable ownership to which they are answerable. Simply put, a board governs on behalf of persons who aren't seated at the table. The primary relationship the board must establish, maintain, clarify, and protect is its relationship with its owners keeping in contact with them, and hearing their voices. The Board Speaks with One Voice or Not at All A board is a corporate entity entrusted by its owners with the authority to govern and lead the organization. If the board is to lead, then on each given issue, it must speak with a single voice. The strength of this voice arises from the diversity of viewpoints and intentions its members bring to the board, as well as from the way the board focuses this multiplicity into unity. This one -voice principle doesn't require or imply unanimity. On the contrary, the board must embrace all the diversity it can on behalf of the ownership. Differences among trustees are not only respected, but encouraged. Rarely will a vote be unanimous. Those board members who lose a vote, however, must accept that the board has spoken and that its decision is now to be implemented. The board should not present conflicting messages to its ownership or its staff. This principle of one voice can be undermined by charging board officers with roles of management, and by creating committees with mandates related to areas of staff responsibility. A board chair who supervises the chief executive, or a committee set up to instruct staff, must inevitably violate the one -voice principle in order to function. Board committees are legitimate when they help with tasks that belong to the board. They are not when they help with tasks that have been delegated to others. Staff spend as much time almost making decisions, which then must be passed through committees, as they would spend actually making the decisions. The principle of one voice can also be broken by individual board members who, thinking they are being helpful, go directly to staff with instruction or guidance. Unless a board masters the art of speaking as a group, it has little power to lead. A board speaks with one voice ... or it doesn't speak at all. Board Decisions Are Predominantly Policy Decisions Policy is here defined as the value or perspective that underlies action. Board policies express the board's soul, embody the board's beliefs, commitments, values, and visions, and express its wisdom. Board policies should be generated by the board itself, not brought to it from other sources. Policies develop out of the board's struggle with values, from the stage of initial musing to crafting a written document. The board decides what to have policies about, and to what level of detail it will develop them. Its policies fit into four categories: ENDS — The board defines which human needs are to be met, for whom, and at what cost. Written with a long -term perspective, these mission - related policies embody the board's vision, and the organization's reason for being. EXECUTIVE LIMITATIONS —The board establishes the boundaries of acceptability within which staff methods and activities can responsibly be left to staff. These policies limit the means by which Ends shall be achieved. BOARD -STAFF LINKAGE —The board clarifies the manner in which it delegates authority and how it evaluates performance relative to ends and limitations. GOVERNANCE PROCESS —The board determines its philosophy, its accountability, and the specifics of its own j ob. Except for what belongs in bylaws, these categories of board policy contain everything the board has to say about values and perspectives that underlie all organizational decisions, activities, practices, budgets, and goals. The Board Formulates Policy by Determining the Broadest Values Before Progressing to More Narrow Ones Values come in sizes; large values contain ranges within which smaller ones occur, like a nested set. A board establishes control over large issues with broad policies, and subsequently decides how much further to detail them. Then it delegates further definition to someone else, fully empowering them to do so, and accepting any reasonable interpretation of its policies. (With Ends and Limitations policies that someone is staff; with Governance and Linkage it's the board chair.) The board may develop policy to whatever detail it wishes, so long as it does so from broad to narrow, and does not skip levels in the process. (When they approach policy - making this way Boards can exercise leadership and maintain effective control without delving into vast detail.) The Board Defines and Delegates, Rather than Reacting and Ratifying Boards are accustomed to approving plans brought to them by staff. Predictable problems arise: The very act of approving forces boards to become entangled in trivia; and to avoid feeling like rubber stamps, boards may nit -pick. Approvals are usually issued without clarifying the criteria used in giving approval. Further, approving staff plans freezes into place details which cannot then be changed without board re- approval. This obstructs staff creativity and agility (a severe disadvantage to the organization), and weighs down the board with detail (diverting time from deciding the very policies that would make such role confusion unnecessary). Having board policies in place ahead of time allows board and staff alike to know whether a staff plan is approvable, since all the criteria by which approval is given are clear for everyone to see. The board does need to be assured that staff plans are true to the applicable board policies — and that reassurance is gained by policy- focused monitoring. This also reinforces the one -voice principle, because the board has already stated its criteria for approval, and board members aren't thrown back onto diverse personal criteria. Ends Determination is the Pivotal Duty of Governance The justification for anybody lies in what difference it can make. A nonprofit organization exists so that its world can be a better place. The kind of thinking needed in order to make a difference requires a sense of the whole, an overview, a high vantage point. The board will become more of a think tank for vision than a reviewer of staff decisions and activities. It will focus on outcomes; focus on the reasons for which the organization exists at all. An issue is an Ends issue if —and only if —it directly describes what good, for whom, or at what cost. If not, it is not an Ends issue, no matter how important, no matter who decides it, no matter how closely related it is to goals, strategies, mission, or perceived board work. Ends language is never about what the organization will be doing; it is always about what will be different for those it serves. Distinguishing ends from means will enable the board to free itself from trivia, to delegate clearly and powerfully, and to turn its attention to large issues. The Board Controls Staff Means by Limiting, Rather than Prescribing The organization's conduct, activities, methods, and practices are its "means" rather than its ends. Board means relate to how the board will organize, structure, and conduct itself in order to accomplish its job. Staff means are the various arrangements and actions needed to accomplish the ends or to safeguard the operations that produce them. Resist the temptation to prescribe staff means. (The board does not tell staff how to do its job.) The board's role is one of boundary- setting — specifying in writing which staff means would be unacceptable, unapprovable, or off limits. (In other words, the board says what kind of means it will not put up with.) Beginning with broad prohibitions, advancing thoughtfully toward more detailed ones, the broader statements act as a safety net. Producing a "don't do it" list sounds negative, but in outcome is not. It allows a secure freedom, the boundaries of which need not be guessed, and within which staff creativity and action are encouraged. This key method of means C O V E R S T O R Y 10 Habits Of Highly Effective Councils ocal government operations directly affect our daily exis- tence and experiences and the quality of life that we per- ceive we have within our communities. No local govern- ment deserves, nor should its citizens tolerate, a council or governing body that isn't extraordi- narily effective and competent in leading the community. Thomas Cronin, a recognized authority on public policy, defines leadership as "making things happen that might not otherwise happen and preventing things from happening that ordinarily might happen. It is a process of getting peo- ple together to achieve common goals and aspirations. Lead- ership is a process that helps people transform intentions into positive action, visions into reality." The quality of leadership effectiveness demonstrated by a governing body and its ability to be a highly effective council are not attributes bestowed upon it by a swearing -in cere- mony. They are the results of disciplined adherence to a set of fundamental principles and skills that characterize highly effective governing bodies. Here, then, are 10 "habits" of highly effective councils, based upon the author's observa- tions of hundreds of governing bodies over the past 20 years. 4 NOVEMBER 1997 Think and Act Strategically N A council's primary re- sponsibility is not just to make policy or to do its "Roman emperor" routine (thumbs down or thumbs up) on agenda items at public meetings. It is to determine and achieve the citizens' desires for the community's future. Councils and their administrative teams must accept responsibility for shaping the future of their communi- ties by expanding their mental hori- zons to identify and meet the chal- lenges that must be addressed through decisive leadership and through shared goals for the attainment of that future. A strategic leader always comes from the future and takes you "back to the future" from the present. This leadership adventure starts with a vi- sion and evolves into a definition of the strategic issues that must be mas- tered to achieve the vision. The next step is the development of long -range goals that address these strategic is- sues and that provide a decision -mak- ing and budgetary basis for the suc- cessful implementation of these goals. Living from one annual budget to an- other and from one council meeting to the next condemns your commu- nity and its future to happenstance and to the type of thinking that often befuddles national governance and policy. For this reason, polls show that an overwhelming majority of citizens want important issues affecting their lives to be decided at the local, home town level. Here, they expect leader- ship, sound thinking, and decisive ac- tion. In spite of this citizen expecta- tion, a 1996 survey conducted by the International City /County Manage- ment Association (ICMA), "Survey of Current Practice in Council- Manager Governments," indicates that fewer than 40 percent of all councils set long -term strategic goals to guide their semimonthly forays into decision making. PUBLIC MANAGEMENT Understand and Demonstrate the ■ Elements of Teams and Teamwork By law, councils exist and have authority only when their members convene as bodies to do business. They also are components of corporate beings that must speak, act, and fulfill their commit- ments with one voice and in a mature, effective, and reliable manner. Councils are collections of diverse individuals who come together to constitute and act as an entity, and only when operating as an entity can they exercise authority and perform in fulfillment of their purpose. This is a classic definition of "team." Carl Larson and Frank LaFasto, two pre- eminent authorities on teams and team- work, define a team as an entity com- prising two or more people working together to accomplish a specific pur- pose that can be attained only through coordinated activity among the team members. In short, a team exists to ful- fill a specific function or purpose and is made up of disparate, interdependent people who collectively achieve a capac- ity that none of its members could demonstrate individually. Teams always have two components that we might call their S components: systemicness and synergy. All teams are systemic by definition, being made up of interdependent parts (people) who af- fect each other's performance and that of the team. Synergy is the ability to achieve an effect, when working to- gether as a team, that is more than the sum of the team members' individual ef- forts. While all teams are systemic, rela- tively few are genuinely synergistic un- less their members understand, master, and demonstrate the fundamentals of teamwork, which are: • A clear sense of purpose. • A clear definition of the roles and re- lationships that unite individual tal- ents and capacities to achieve team performance. • Integration of members who have basic technical, interpersonal, and decision - making competence. • A commitment to team success and performance excellence. • A climate of trust, openness, and mu- tual respect. • Clear standards of success and per- formance excellence. • The support, resources, and recogni- tion to achieve success. • Principled and disciplined leader - ship. Highly effective councils spend time building their sense of being a team and enhancing their skills in productive teamwork. Master Small - Group Decision Making Most councils are classic small groups, with fewer than a dozen people. Small groups demonstrate certain skills and behaviors that link their members to- gether. They also have knowledge of the processes they must follow to make de- cisions in fulfillment of their purpose. Figure 1 summarizes the skill sets essen- tial to small-group effectiveness. itClearly Define Roles and - Relationships Each team member, whether mayor or councilmember, makes a contribution to and has a relationship with the team. Contributions and relationships must be defined in terms of the role to be as- sumed and how that role is to be carried out through the behavior of the person in the role. A role has two elements: function, the specific responsibilities of that role, re- gardless of incumbency; and perfor- mance, the behavior of the person occu- pying the role in fulfilling his or her responsibilities. Councils, through char- ter, statute, or ordinance, have a clear definition of their function. The perfor- Figure 1. Effective Small -Group Decision Malting Interpersonal Skills The ability to work with others and problems rationally • Listening to and understanding the views of others • Constructively confronting and resolving differences . • Supporting others and showing respect for their ideas • Participating actively in discussions • Taking "time outs" to discuss how well group members interact mance component must be defined within the team through discussion and mutual definition of those behaviors and practices expected of the mayor and councilmembers in the conduct of their duties and interactions. Vince Lombardi, when asked what made a winning team, replied, "Start with the fundamentals. A player's got to know the basics of the game and how to play his [her] position. The players have to play as a team, not a bunch of indi- viduals. The .difference between medi- ocrity and greatness is the feeling the players have for each other," that is, their relationships. Teams talk about and de- fine expected roles and relationships and give constructive feedback to their members on the degree to which they are fulfilling these expectations. - Establish and Abide by a Council -Staff Partnership We have all heard the saying "Council makes policy, staff implements policy." Well, this is a total misconception of re- ality. Policy making and policy imple- mentation are not distinct and separate An EFFECTIVE Small Group Task Skills Knowledge to do a job • Knowing the form and role of the organization • Knowing law, policies, and procedures • Showing civility and good manners • Using professional and technical knowledge functions. Policy making/implementa - tion is a continuum of thought and rela- tions that transforms ideas and abstrac- tions (visions, policies, goals, and plans) into defined, observable ends or out- comes (results, programs, buildings, streets, deliverable services). Council and staff share this continuum as part- ners ensuring each other's success. Each person plays an important role in mak- ing sound policies and in ensuring their effective implementation through reli- able administrative practices and perfor- mance. Figure 2 depicts this partnership and continuum. John Carver, a widely acclaimed au- thor who writes about boards . that make a difference, discusses this partnership as one in which councils define the needs to be met and the outcomes to be achieved. He believes that councils should allow staff, within council- estab- lished limits, to define the means for achieving these ends. He sees a council- staff linkage that empowers staff to do its tasks and to be evaluated on the re- sults produced. Councils that accept and abide by this partnership focus their energy on estab- lishing vision, goals, and good policy and Rational Skills Ability to deal with issues and problems rationally • Selecting and prioritizing the issues to be addressed • Analyzing issues and related facts • Identifying objectives and outcomes • Considering alternative strategies and courses of action • Assessing obstacles and consequences • Reaching consensus decisions • Evaluating and following up on empowering effective staff perfor- mance. Councils that do not do this will frequently fall into micromanaging, that is, they will perceive a need to become involved in, or retain approval over, even minor staff activity and plans. A critical element and important council task in this partnership is evalu- ation of the manager or administrator, based upon clearly defined goals, poli- cies, and established guidelines on exec- utive performance. According to the 1996 ICMA survey, only about 45 per- cent of all councils formally evaluate their managers' performance. Make a Systematic Evaluation of Policy Implementation Councils, like most legislative bodies, frequently exhibit the Jean Luc Picard syndrome (Star Trek 11) and simply tell their staffs: "Make it so." They assume that council action equates to policy and program implementation. The next time the council hears about policy is when a problem or crisis arises. In contrast, highly effective councils NOVEMBER 1997 Figure 2. Council-Staff .Partnership (To What `Degree 1% This Partnership Understood,; Discussed, .and Respected by Councilmembers ?) GOVERNA- NCE /POLI.CY. PRO CESS COUNCIL'S: $ > O L I C. • Community Y • Political factors • Values expect periodic feedback on policy re- sults and on possible policy amend- ments that may be required. This feed- back can be provided through progress reports, status memos or newsletters, and policy reviews. M_' v Allocate Council Time and Energy Appropriately Councils, like other teams, play in a number of settings or arenas to achieve overall, peak performance. There are four council -staff arenas, and each must be appreciated for its purpose and for its contribution to a council's effectiveness: Goal setting (retreats or "advances "). Exploration and analysis (study sessions). Disposition/legislation (regular pub- lic meetings). Community relations (interactions with constituents and with other agencies). PUBLIC MANAGEMENT .F A D E M I N A continuum /interaction Figure 3 shows the purpose, typical setting, focus, and key characteristics of each arena. All four arenas are essential to highly effective councils' fulfillment of their leadership, policy- making, goal - setting, and empowering responsibilities. A highly effective council will hold at least one goal- setting retreat or "ad- vance" annually. It also will hold two study sessions monthly, usually between regularly scheduled public hearings. Here, councilmembers will confer with staff and other experts on significant items under consideration that will eventually require official actions. While these meetings should be open to the public as observers, the public should not participate in the council - staff dialogue. Many councils short- change this arena, pushing the opportu- nity for learning into the formal public hearing, which is not designed to pro- mote much in -depth analysis of complex issues. The arena of disposition/legislation is designed to get to a vote, not to pro- mote careful analysis of complex issues. A. D M I N I S T R A T.. ,.I O :N_ ADMINISTRATOR/ MANAGER'S SPHERE Staff and \ implementation • Performance issues Values and expertise • Gratification / The fourth arena, community rela- tions, is becoming more important. It is rapidly transforming the role of the council and how it spends its time. Communities today are more dependent upon sophisticated alliances and part- nerships among groups, both public and private entities. Jurisdictions are subject to multiple, profound changes in how public officials operate. Today, the com- munity arena requires more time spent in interactions outside city hall and puts greater time pressure on mayors and councilmembers. Set Clear Rules - and Procedures t; for Council M Meetings Council meetings exist for the purpose of doing the council's business. Litera- ture on how to conduct effective and productive meetings specifies the need for an adherence to clearly defined rules and procedures. G A O D A M M M L I A I - -- S, P N N S / _ I A S R L S G I E I T E O S C R- - -_ M N U Y A E, L T N T I T S O N Figure 3 shows the purpose, typical setting, focus, and key characteristics of each arena. All four arenas are essential to highly effective councils' fulfillment of their leadership, policy- making, goal - setting, and empowering responsibilities. A highly effective council will hold at least one goal- setting retreat or "ad- vance" annually. It also will hold two study sessions monthly, usually between regularly scheduled public hearings. Here, councilmembers will confer with staff and other experts on significant items under consideration that will eventually require official actions. While these meetings should be open to the public as observers, the public should not participate in the council - staff dialogue. Many councils short- change this arena, pushing the opportu- nity for learning into the formal public hearing, which is not designed to pro- mote much in -depth analysis of complex issues. The arena of disposition/legislation is designed to get to a vote, not to pro- mote careful analysis of complex issues. A. D M I N I S T R A T.. ,.I O :N_ ADMINISTRATOR/ MANAGER'S SPHERE Staff and \ implementation • Performance issues Values and expertise • Gratification / The fourth arena, community rela- tions, is becoming more important. It is rapidly transforming the role of the council and how it spends its time. Communities today are more dependent upon sophisticated alliances and part- nerships among groups, both public and private entities. Jurisdictions are subject to multiple, profound changes in how public officials operate. Today, the com- munity arena requires more time spent in interactions outside city hall and puts greater time pressure on mayors and councilmembers. Set Clear Rules - and Procedures t; for Council M Meetings Council meetings exist for the purpose of doing the council's business. Litera- ture on how to conduct effective and productive meetings specifies the need for an adherence to clearly defined rules and procedures. ,C ., r• Figure 3. Arenas for Governing Body and Staff Performance Arena Purposes Typical Setting Focuses Key Characteristics Goal Setting • Establish vision • Explore potentials • Set goals • Set direction/ priorities - Community - Services -Staff action - Budgets Retreat or advance— informal off -site • Future of community • Evaluation of . -Needs - Trends - Strategic issues. • Community desires and values • Leadership * Informality. • Sharing of options • Open dialogue • Creative thinking • Humor and adventure Face -to- face /group interaction Many councils, however, drift from these rules and procedures in pursuit of informality, collegiality, and "just being nice." They let their meetings drone on with a lack of focus, redundant com- ments, and endless discussion. Rules and procedures do not pre- clude citizen input, courtesy, or sensi- tivity to public concerns and view- points. They respect all these elements and the necessity to conduct business in an orderly, disciplined, and productive manner. 8 Exploration and Analysis • Understanding the issue(s) • Problem identification • Selecting "best options" • Building commitment Study session — conference room • Developing knowl- edge for decision. making •. Sorting of options • Examining .consequences • Setting strategies • Making competent and informed decisions • Starting council-staff dialogue • Questioning and test- ing ideas • Exchanging information • Negotiating and consensus building . • No voting • Face -to- face /group interaction Disposition/ Legislation • Taking official action • Voting on items - Resolutions - Ordinances • Gathering public input • Mobilizing support Community Relations • Interacting with constituents /citizens • Building alliances • Doing outreach and liaison • Coordinating with other entities Public— formal council Numerous— meeting in chambers diverse formats • Going through.the agenda (formality) • Showing authority • Ratifiying /adopting •.Dealing . with political pressures • Identifying psychological needs •. Meeting, formally • Setting and following rules and procedures • Encouraging public . input and involvement • Gaining high visibility • Dealing with pressure /advocacy from groups • Voting • Interacting as groups Get a Valid Assessment of the Public's ® Concerns and an Evaluation of the Council's Performance Elections are contests among individuals vying to become members of the coun- cil. They are not valid, objective assess- ments of the public's feeling about the quality of the council's performance as a governing body and about whether or • Communicating Problem solving Collaborating and coordinating • Forming partnership(s) • Acting as a . community Being "outs ide "city' Ball. Responding to . . requests • Starting joint ventures • Facilitating .interagency activity • Using multiple inter- action modes and communication techniques not it is addressing issues effectively. Highly effective councils seek feedback through a number of market research tools such as focus groups, surveys, and questionnaires. Typically, the phone calls a councilmember receives or the com- ments made in public hearings are not valid or accurate reflections of the entire community's sentiments about issues and about the council's performance. "Market research feedback" should be ongoing and should be included in the annual goal- setting retreat or advance. NovennecR 1997 Division A of AERA This is a shortened version of What We Know About Successful School Leadership, prepared for the Task Force on Developing Research in Educational Leadership. It will appear in 2003. The task force was established in 2000 by Division A (Administration) of the American Educational Research Association, with the charge to promote and encourage high- quality research in educational leadership. William A. Firestone and Carolyn Riehl serve as co- chairs of the task force. The University Council for Educational Administration and the Laboratory for Student Success at Temple University also collaborate with the task force. We are grateful for the financial support provided by the Laboratory for Student Success through a subcontract to the Center for Educational Policy Analysis of Rutgers University. The authors of this brief are Kenneth A. Leithwood (Ontario Institute for Studies in Education, University of Toronto) and Carolyn Riehl (University of North Carolina at Greensboro). The Task Force on Developing Research in Educational Leadership is currently preparing a series of working papers on substantive areas of concern, ranging from the leader's role in instructional improvement, to issues in the recruitment and preparation of educational leaders, to methodological approaches for research in educational leadership. These papers will summarize key current knowledge and will highlight significant research questions that need to be addressed in the future in order to help improve educa- tional leadership practice and policy. To contact these individuals and groups, please write to the following addresses: Task Force on Research in Educational Leadership: wilfires @rci.rutgers.edu or cjriehl @uncg.edu Division A of the American Educational Research Association: forsytp @okstate.edu University Council for Educational Administration: execucea @coe.missouri.edu Laboratory for Student Success: marilyn.murphy @temple.edu Kenneth A. Leithwood: kleithwood @oise.utoronto.ca Carolyn Riehl: cjriehl @uncg.edu This brief is copyrighted by the Laboratory for Student Success. It may be reproduced without permission and with proper citation, as follows: Leithwood, K. A., & Riehl, C. (2003). What we know about successful school leadership. Philadelphia, PA: Laboratory for Student Success, Temple University. WHAT WE KNOW ABOUT SUCCESSFUL SCHOOL LEADERSHIP cratch the surface of an excellent school and you are likely to find an excellent principal. Peer into a failing school and you will find weak leadership. That, at least, is the conventional wisdom. Leaders are thought to be essential for high- quality education. But is this indeed true — and if so, exactly how does leadership work? Amidst the seeming certainty that leadership matters, there is much that we do not yet understand about effective educational leadership. However, the knowledge base about leadership is constantly growing. In this brief, we present a summary of key, well- documented understandings about leadership at the school level. This knowledge can be used with confidence to guide leadership practice, policy, and research. It can help address concerns about school leaders' preparation and performance. It also can provide a good start- ing point for dialogue with diverse audiences about the future of educational leadership. WHY THE RENEWED EMPHASIS ON EDUCATIONAL LEADERSHIP? OUTCOMES ARE CRUCIAL Local, state, and federal achievement standards for ambitious learning for all children have changed the landscape of educational accountability. Pressure is on actors at all levels, from students themselves to teachers, principals, and superin- tendents. In these times of heightened concern for student learning, school leaders are being held accountable for how well teachers teach and how much students learn. THE ENVIRONMENT IS MORE COMPLEX Educational leaders must guide their schools through the challenges posed by an increasingly complex environment. Curriculum standards, achievement benchmarks, programmatic requirements, and other policy directives from many sources generate complicated and unpredictable requirements for schools. Principals must respond to increasing diversity in student characteristics, including cultural background and immigration status, income disparities, physical and mental disabilities, and variation in learning capacities. They must manage new collaborations with other social agencies that serve children. Rapid developments in technologies for teaching and communication require adjustments in the internal workings of schools. These are just a few of the conditions that make schooling more challenging and leadership more essential. (Locov) Copies of this brief are available, in pdf format, at www. cepa. gse.rutgers.edu /whatwelknow.pdf In sum, school leaders are those persons, occupying various roles in the school, who provide direction and exert influence in order to achieve the school's goals. Formal leaders —those persons in formal positions of authority —are genuine leaders only to the extent that they fulfill these functions. Leadership functions can be carried out in many different ways, depending on the individual leader, the context, and the nature of the goals being pursued. RESEARCH -BASED CONCLUSIONS ABOUT SUCCESSFUL SCHOOL LEADERSHIP Major findings from research on school leadership can be summarized in the following five claims. 1. Leadership has significant effects on student learning, second only to the effects of the quality of curriculum and teachers' instruction. To learn well, students need access to high - quality instruction and a well- crafted curriculum. After that, they benefit most of all from the positive effects of strong school leadership. WHAT WE KNOW ABOUT SUCCESSFUL SCHOOL LEADERSHIP RESEARCH AND BELIEFS STRESS THE IMPORTANCE OF LEADERSHIP A growing body of research evidence documents the effects of leadership. Moreover, anecdotal and popular accounts from business and other ventures tout the value of leadership. Some observers argue that this fascination with leadership merely At the reflects a general human desire to be in control of one's situation. Others say that core while the impact of good leadership may be difficult to determine, the effects of poor of most leadership are easy to see. In any case, fascination with leadership abounds. definitions of WHAT IS LEADERSHIP? leadership Like other complex human activities, leadership is difficult to pin down. It might are even be unwise to narrow it unnecessarily. Nonetheless, a working definition can two functions: provide a useful frame of reference. At the core of most definitions of leadership are two functions: providing direction providing and exercising influence. Leaders mobilize and work with others to achieve shared direction goals. This definition has several important implications: and E Leaders do not merely impose goals on followers, but work with others to create a shared sense of purpose and direction. In public education, the ends are exercising increasingly centered on student learning, including both the development of academic knowledge and skills and the learning of important values and influence. dispositions. • Leaders primarily work through and with other people. They also help to establish the conditions that enable others to be effective. Thus, leadership effects on school goals are indirect as well as direct. • Leadership is a function more than a role. Although leadership is often invested in—or expected of— persons in positions of formal authority, leadership encom- passes a set of functions that may be performed by many different persons in different roles throughout a school. In sum, school leaders are those persons, occupying various roles in the school, who provide direction and exert influence in order to achieve the school's goals. Formal leaders —those persons in formal positions of authority —are genuine leaders only to the extent that they fulfill these functions. Leadership functions can be carried out in many different ways, depending on the individual leader, the context, and the nature of the goals being pursued. RESEARCH -BASED CONCLUSIONS ABOUT SUCCESSFUL SCHOOL LEADERSHIP Major findings from research on school leadership can be summarized in the following five claims. 1. Leadership has significant effects on student learning, second only to the effects of the quality of curriculum and teachers' instruction. To learn well, students need access to high - quality instruction and a well- crafted curriculum. After that, they benefit most of all from the positive effects of strong school leadership. WHAT WE KNOW ABOUT SUCCESSFUL SCHOOL LEADERSHIP Case studies of exceptional schools, especially those that succeed beyond expectations, provide detailed portraits of leadership. These studies indicate that school leaders influence learning primarily by galvanizing effort around ambitious goals and by establishing conditions that support teachers and that help students succeed. Large -scale quantitative studies of schooling conclude that the effects of leader- ship on student learning are small but educationally significant. Although leadership explains only about three to five percent of the variation in student learning across schools, this effect is actually nearly one - quarter of the total effect of all school factors. In these studies, as in case studies, leadership effects appear to be mostly indirect. That is, leaders influence student learning by helping to promote vision and goals, and by ensuring that resources and processes are in place to enable teachers to teach well. 2. Currently, administrators and teacher leaders provide most of the leadership in schools, but other potential sources of leadership exist. Much research focuses on the formal leadership of school principals. This research finds that principals exert leadership through constellations of actions that coalesce around different "models" of leadership, including transformational, instructional, moral, or participative leadership. A growing body of research examines the leadership practices of teachers, either as informal leaders without a formal leadership role, or as formal leaders in roles such as department head, coordinator of a special program, or teacher mentor. While empirical evidence is limited, research suggests that teacher leaders can help other teachers to embrace goals, to understand the changes that are needed to strengthen teaching and learning, and to work together towards improvement. As flatter, team -based, more organic structures begin to predominate over hierarchical structures in schools, especially through site -based management initiatives, more attention is being paid to the kinds of leadership that can be distributed across many roles and functions in the school. In addition to teachers and administrators, parents and students are important potential sources of leadership. 3. A core set of leadership practices form the "basics" of successful leadership and are valuable in almost all educational contexts. Three broad categories of practices have been identified as important for leadership success in almost all settings and organizations. They are setting directions, developing people, and developing the organization. Each category encompasses more specific competencies, orientations, and considerations. Setting Directions This dimension of leadership practice includes actions aimed at developing goals for schooling and inspiring others with a vision of the future. ■ Identifying and articulating a vision. Effective educational leaders help their schools to develop or endorse visions that embody the best thinldng about teaching and learning. School leaders inspire others to reach for ambitious goals. ■ Creating shared meanings. Because people usually base their actions on how they understand things, educational leaders help to create shared meanings and understandings to support the school's vision. School Effective educational leaders help their schools to develop visions that embody the best thinking about teaching and learning. Developing People Most work in schools is, of course, accomplished through the efforts of people. Effective educational leaders influence the development of human resources in their schools. • Offering intellectual stimulation. Effective leaders encourage reflection and challenge their staff to examine assumptions about their work and rethink how it can be performed. They provide information and resources to help people see discrepancies between current and desired practices. They enable teachers and others to understand and gain mastery over the complexities of necessary changes. • Providing individualized support. Most educational improvement requires significant levels of change for the individuals involved. Successful educa- tional leaders show respect for staff and concern about their feelings and needs. Leaders provide incentives and structures to promote change, as well as opportunities for individual learning and appropriate means for monitor- ing progress toward improvement. • Providing an appropriate model. Effective school leaders set examples for staff and others to follow that are consistent with the school's values and goals. By modeling desired dispositions and actions, leaders enhance others' beliefs about their own capacities and their enthusiasm for change. Developing the Organization School leaders attend to aspects of the school as an organization and a community, with consideration of internal processes and external relationships. Effective leaders enable the school to function as a professional learning com- munity to support and sustain the performance of all key workers, including teachers as well as students. WHAT WE KNOW ABOUT SUCCESSFUL SCHOOL LEADERSHIP legitimacy and effectiveness are enhanced when both internal members and the broader community share clear understandings about students, learning, and schooling. • Creating high performance expectations. Effective leaders convey their expectations for quality and high performance. They help others see the challenging nature of the goals being pursued. They sharpen perceptions of Effective leaders the gap between what the school aspires to and what is presently being accomplished. Effective expressions of high expectations help people see help the school to that what is being expected is in fact possible. become a 0 Fostering the acceptance of group goals. Effective educational leaders promote cooperation and assist others to work together toward common goals. In the past, teachers have often worked under conditions of relative professional autonomy, but new models of schools as professional learning communities learning emphasize the importance of shared goals and effort. community to • Monitoring organizational performance. Effective school leaders assess how well the school is performing along multiple indicators and use that the information as goals are developed and reviewed. This requires astute skills support Su pp for gathering and interpreting information, as well as a tradition of inquiry and reflection. Successful school leaders ask critical and constructive performance of questions, emphasize the use of systematic evidence, and encourage careful all key Workers, monitoring of both teaching and pupil progress. including • Communicating. Skillful leaders focus attention on key aspects of the school's vision and communicate the vision clearly and convincingly. teachers and They invite interchange with multiple stakeholders through participatory communication strategies. They frame issues in ways that will lead to students productive discourse and decision making. Developing People Most work in schools is, of course, accomplished through the efforts of people. Effective educational leaders influence the development of human resources in their schools. • Offering intellectual stimulation. Effective leaders encourage reflection and challenge their staff to examine assumptions about their work and rethink how it can be performed. They provide information and resources to help people see discrepancies between current and desired practices. They enable teachers and others to understand and gain mastery over the complexities of necessary changes. • Providing individualized support. Most educational improvement requires significant levels of change for the individuals involved. Successful educa- tional leaders show respect for staff and concern about their feelings and needs. Leaders provide incentives and structures to promote change, as well as opportunities for individual learning and appropriate means for monitor- ing progress toward improvement. • Providing an appropriate model. Effective school leaders set examples for staff and others to follow that are consistent with the school's values and goals. By modeling desired dispositions and actions, leaders enhance others' beliefs about their own capacities and their enthusiasm for change. Developing the Organization School leaders attend to aspects of the school as an organization and a community, with consideration of internal processes and external relationships. Effective leaders enable the school to function as a professional learning com- munity to support and sustain the performance of all key workers, including teachers as well as students. WHAT WE KNOW ABOUT SUCCESSFUL SCHOOL LEADERSHIP ■ Strengthening school culture. Effective school leaders help develop school cultures that embody shared norms, values, beliefs, and attitudes and that promote mutual caring and trust among all members. School culture sets a tone and context within which work is undertaken and goals are pursued. ■ Modifying organizational structure. School leaders monitor and adjust the structural organization of the school, including how tasks are assigned and performed, the use of time and space, the acquisition and allocation of Leaders in highly equipment, supplies, and other resources, and all of the routine operating diverse procedures of the school. Organizational structure is the skeletal framework contexts within which people carry out their work. Structure can enhance or binder individual performance and the accomplishment of school goals. Effective help identify and educational leaders direct structural changes that will establish positive implement forms conditions for teaching and learning. ■ Building collaborative processes. Educational leaders enhance the per- of teaching and formance of their schools by providing opportunities for staff to participate in decision making about issues that affect them and for which their knowl- 7 learning that are edge is crucial. In this way, leaders help others to shape the school in ways individual that can accomplish shared goals and address concerns as well. appropriate and ■ Managing the environment. Effective leaders work with representatives effective for the from the school's environment, including parents, community members, business and government liaisons, and influential others. They pursue populations positive interactions with the goals of fostering shared meanings, garnering resources and support, and establishing productive inter - organizational they serve. relationships. To effectively position their schools within their environments, and to respond to legitimate concerns from parents and others, educational leaders are client- centered, proactive, and focused. While mastery of these basics provides no guarantee that a leader's work will be successful in a particular school context, lack of mastery likely guarantees failure. A successful leader needs to do more but cannot do less. 4. Successful school leaders respond productively to challenges and opportunities created by the accountability- oriented policy context in which they work. Every school is in some fashion unique, and successful leaders address the particularities of their contexts appropriately. However, large numbers of schools share special challenges and opportunities that require effective responses from educational leaders. One such instance is the rise in different kinds of policies designed to hold schools more accountable. Leadership practices that help schools succeed when they confront various forms of accountability mechanisms may include, for example: ■ Creating and sustaining a competitive school. This is important when choice options and market conditions eliminate monopolies over enrollments and require schools to compete for students. ■ Empowering others to make significant decisions. When accountability mechanisms require stakeholders to have a greater voice in school gover- nance, leaders implement strategies that help others participate effectively. ■ Providing instructional guidance. When accountability policies stress standards for professional performance for teachers and others in the school, leaders need to stay abreast of best professional practices and help create conditions for professional growth. ■ Strategic planning. When schools are required to have school improvement plans for accountability purposes, school leaders pay special attention to monitoring school performance and developing concrete plans for improvement. WHAT WE KNOW ABOUT SUCCESSFUL SCHOOL LEADERSHIP 5. Successful school leaders respond productively to the opportu- nities and challenges of educating diverse groups of students. Many school leaders work with student populations that are increasingly diverse and that may not be experiencing success in school. This includes children who are from low- income families or whose cultural backgrounds or characteristics fall outside of the mainstream (for example, native peoples or recent immigrants, School leaders can children with physical handicaps, and Latinos or African- Americans). Histories of poor school performance for such students may result from neglect on the promote equity part of school and/or district leaders, allocation of the least able teachers and and'ustice for most limited resources to the most needy schools and students, low expecta- ] lions, or lack of knowledge of effective strategies for working with particular all students by kinds of students in challenging contexts. Evidence suggests that successful leaders of schools in highly diverse contexts focus their efforts on four sets of establishing school tasks: ■ Building powerful forms of teaching and learning. Instructional climates where methods that succeed in many schools may not be effective in all schools. Leaders in highly diverse contexts help identify and implement forms of patterns of teaching and learning that are appropriate and effective for the populations they serve. This requires thorough, critical examination of practices that have discrimination failed in the past. It also requires careful attention to developing curriculum are challenged content that is accessible and engaging, assessment methods (including retention policies) that both monitor performance and motivate students, and negated. and features of school and classroom organizational structures, such as class size, student grouping practices, and staffing arrangements, that will ensure ambitious and equitable performance from students. ■ Creating strong communities in school. A strong sense of affiliation and caring among all students and adults in a school is crucial to engaging and motivating students to learn. This is especially true in school settings where trust and cohesion have been low. School leaders help develop a sense of community in their schools by establishing communal cultures and structures, through strategies such as smaller schools, schools within a school, or personalized learning environments in which children's individual needs are taken seriously. Students also benefit when teachers and others form a professional learning community. Teacher community enhances teachers' ability to learn how to teach challenging students more effectively, increases their certainty that what they do can make a difference, and increases their commitment to the task. Professional learning communities tend to develop where schools are smaller, there is more time for teacher collaboration, and teachers can make significant decisions about instruction and other matters in the school. Even more important are a climate of openness to innovation, trust and caring among professionals, opportunities for professional development, and sup- portive leadership. ■ Expanding the proportion of students' social capital valued by the schools. Students bring knowledge and information, values and preferences, and behavioral habits and dispositions to school. Students have acquired these in part from their relationships and interactions with parents, community members, and other persons in their social network, hence they are sometimes known as forms of "social capital." Students' social capital becomes an educational asset when it enables them to fit into school life and successfully perform learning tasks. The value of social capital depends in part on what people in the school choose to count as educationally useful. Knowledge and values generated by the linguistic, racial, religious, or cultural diversity of a student's social network may be ignored or discounted when in fact they hold considerable potential for influencing learning. WHAT WE KNOW ABOUT SUCCESSFUL SCHOOL LEADERSHIP To succeed with diverse students, teachers and others in schools must SUGGESTED REFERENCES: choose to view different forms of capital as assets or resources rather than deficits. School leaders play an important role in this process when they help Hallinger, P., & Heck, R. H. to establish more positive relationships between educators, students, and (1996). Reassessing the princi- their families and communities, and when these relationships are built on pal's role in school effectiveness: trust, deep familiarity, and genuine appreciation for the assets of the family A review of empirical research, or community. School leaders can promote equity and justice for all students 1980-1995• Educational by establishing school climates in which patterns of subtle or explicit Administration Quarterly, discrimination are challenged and negated. 32(1), 5-44• ■ Nurturing the development of families' educational cultures. Student learning is enhanced when it is supported by both the school and the Larson, C. L., & Murtadha, K. family. For that to happen, learning goals must be acceptable to families, and (2002). Leadership for social families must have the resources, knowledge, and inclination to help. When families are able to provide academic guidance and support for their justice. In J. Murphy (Ed.), children, when they provide time and resources so that children can do their The educational leadership school work, when they can ensure that their children are healthy and ready challenge: Redefining leadership to learn, and when they have high expectations for their children's learning, for the 21st century (pp. 134 -161). they have what can be termed strong "family educational cultures." Chicago: University of Chicago School leaders can help strengthen family educational cultures by doing Press. things that promote trust'and communication between families and schools, by helping to provide resources to families, by educating and supporting Leithwood, K., & Jantzi, D. families in matters connected to parenting and schooling, and by adjusting (1999)• The relative effects of school practices to accommodate to the educational cultures that families do have. principal and teacher sources of leadership on student engagement with school. Educational Administration CONCLUSION Quarterly, 35(Suppl.), 679-706. Efforts to improve educational leadership should build upon the foundation of well- documented and well- accepted knowledge about leadership that already exists. We know that school leadership is most successful when it is focused on teaching and learning, and that it is necessary but not sufficient for school improvement. We understand that leadership can take different forms in different contexts. We under- stand some of the mechanisms through which educational leadership has its effects. There are still many gaps in our knowledge about effective educational leadership. For example, how can educational leaders balance their leadership and managerial responsibilities in ways that move their schools forward? If leadership functions are indeed distributed across many formal and informal roles in a school, how are these roles coordinated and who takes responsibility for what? How can diversity in educational leadership be fostered, so that persons with appropriately rich back- grounds, values, and community connections lead our schools? Do educational leaders need answers to enduring questions about schooling, or are they most in need of provisional answers to immediate local concerns; in either case, how are those answers most likely to be developed and conveyed to potential users of the knowledge? These and many other questions call out for further inquiry, and for vigorous conversation among the practitioners, policy makers, and scholars who are part of —and who support —the educational leadership profession. IN Murphy, J., & Louis, K. S. (Eds.). (1994). Reshaping the principalship: Insights from transformational reform efforts. Thousand Oaks, CA: Corwin Press. Riehl, C. J. (2000). The principal's role in creating inclusive schools for diverse students: A review of normative, empirical, and critical literature on the practice of educational administration. Review of Educational Research, 70(I), 55 -81. For a copy of the longer paper (with citations) on which this newsletter is based, please go to www.cepa.gse.rutgers.edu/ whatwekn owl ong. pd f NATIONAL RESOURCE CENTER ON CHARTER SCHOOL FINANCE & GOVERNANCE El Developing Training Programs for Charter School Governing Board Members Nevada State Department of Education, Idaho Charter School Network, Minnesota School Boards Association, Utah's CharterSTAR (Straight Talk, Answers and Resources) SUMMARY Charter schools offer an opportunity for teachers, parents, and other community members to be actively involved in the governance of public schools. However, anecdotal evidence suggests that malfunctioning charter school boards are common, reflecting a lack of board experience and a tendency to manage rather than govern. In this promising practice profile, the National Resource Center on Charter School Finance and Governance describes efforts in four states to train and support charter school governing Promising Practice in: board members. An infrastructure has been —or is being — developed to provide ❑ Charter School Finance sustained assistance to develop high - quality governing boards so members understand W Charter School what their responsibilities are and how to fulfill them, enabling charter schools to focus on Governance supporting students according to their mission. Implemented by: W State Policymaker ❑ Charter Authorizer W Charter Operator W Other Inside: W Implementation Details Vd Impact Gd Lessons Learned 5W Additional Comments Gd Useful Resources Gd Contact Information BAC KG RO U N CI To increase the quality and effectiveness of charter school governing boards, several states have implemented and promoted extensive, innovative training processes for board members. In Utah, a dissemination grant was awarded to a charter school with an effective governing board. The funding is being used to set up a system within the state to provide ongoing training and support once the dissemination grant has ended. The Minnesota School Boards Association is focused on proper board implementation of the charter school law, especially with respect to insurance liability. The Idaho Charter School Network aims to provide technical assistance to board members that will create new high - quality charter schools and sustain existing ones throughout the state. Finally, in Nevada, the state department of education is interested in having well- constituted charter school governing boards with well- informed members. Utah's john Hancock Charter School drew on its startup and operational experience to propose a mecha- nism for providing organizational technical assistance using federal charter school dissemination grant funding. When the grant was awarded in 2006, the school hired Steve Winitzky and his colleagues for their expertise in Utah charter school operation and training. Together they estab- lished CharterSTAR (Straight Talk, Answers and Resources) as a formal organization for charter school technical sup- port and governing board member training in the state. CharterSTAR is applying for a second year of funding to establish a permanent support infrastructure for future training of Utah charter school governing board members. Jan Rhode, of the Minnesota School Boards Association, has been training traditional school board members for years. When charter school legislation was enacted in the state, she was involved in reading charter proposals. Later, the state asked her, as a natural extension of what she al- ready did, to provide training for charter school governing boards in areas where they were lacking expertise. At the same time, new charter schools needed to obtain insurance for property casualties as well as for errors and omissions. To qualify for state insurance plans, the schools needed to be members of the Minnesota School Boards Association, which historically had been composed solely of traditional local school board members. A modified membership cat- egory was created to enable charter schools to take advan- tage of the low -cost state insurance offered through the association. Soon after, liability issues arose from charter school governing boards' inability to comply with state laws. Minnesota's charter school law requires board members to obtain training in order to receive funding, and the state continues to offer training programs. However, a logical step was for the Minnesota School Boards Association to invite charter school governing board members to participate in its training opportunities and lower potential liability costs vis a vis the state insurance, a mutually beneficial situation for the charter schools and the state. In Idaho and Nevada, training programs have developed in response to charter school governing board members asking the state for help. The Nevada State Department of Education has one full -time position designated to serve the needs of the 23 charter schools operating in the state. In that position, Tom McCormack draws on expertise from both within and outside the state to design and implement training and support systems for charter school governing board members. Shirley Rau, the former executive director of the Idaho Charter School Network, boasts of network Developing Training Programs for Charter School Governing Board Members membership from 26 of the 28 charter schools in the state. Network membership affords access to board training and technical assistance, among other services. The network has received some funding from federal grants awarded to the state. IMPLEMENTATION DETAILS The main goal of all these training programs is having effi- cient, knowledgeable, and high- functioning charter school governing boards so charter school leaders can focus more time on students and school performance. One commonality across the models is the practice of using experts with specific charter school governance experi- ence who are both credible and trusted within the charter school community. Also, none of these programs are "set" programs. They are flexible and adaptable to the specific needs of the charter schools and their board members and are oriented toward promoting sustainable, long -term charter school success. The training delivery methods used in the four pro- grams vary tremendously, however. CharterSTAR in Utah has several components, including workshops for people interested in applying for new charters. The state requires charter developers to attend one of these workshops in order to have their applications considered. The workshops include a review of the application process and training that outlines the roles and responsibilities of becoming a new public school. Some discussion is focused on how boards can function effectively. Once applications for new charters have been accepted by the state, CharterSTAR provides training for schools in their pre - operational planning year. These trainings usually begin with founders and sometimes board members, executive directors, and business managers of the newly forming charter schools. In the planning -year training, CharterSTAR covers details of the obligations that charter schools have as public entities operating under the umbrella of state and federal education codes. Although addressed in the planning -year training, CharterSTAR runs an entire training program for exist- ing charter school governing boards designed to teach members what their role includes and, more impor- tantly, what their role does not include. Last year it hired Brian Carpenter —chief executive officer of the National Charter Schools Institute and author of numerous publica- tions on effective boards, including Charter School Board University —to hold three regional workshops in Utah. These workshops were met with excellent attendance CHARTER SCHOOL FINANCE A GOVERNANCE throughout the state and rave reviews in participant evalua- tions. CharterSTAR has hired Carpenter to return to Utah in fall 2007 to work individually with charter school govern- ing boards that have asked for extra support and training. Although not as extensive a program as in Utah, Nevada is developing a system of supports for charter schools that will lead to their major end goal of quality charter schools with well- informed governing boards. Nevada law requires all new charter school governing board members to sign affidavits stating that they have read and understand the responsibilities of their position. Attached to the affidavit are three pages of information and guidance. In addition, many governing board members also attend annual governing board trainings sponsored by the state department of education. In the three years training has been conducted, the department has twice brought in experts from other states and, most recently, used the ex- pertise of an attorney within the state. The local attorney, Bonnie Drinkwater, prepared sample bylaws that charter schools can use as a guide when developing their own bylaws. In addition to annual charter school governing board trainings, the Idaho Charter School Network provides individual training sessions based on four areas of excel- lence developed by members of the network in collabora- tion with Jim Griffin of the Colorado League of Charter What Can Charter School Governing Boards Learn from.... • Independent School Boards? See Trustee Handbook: A Guide to Effective Governance for Independent School Boards, Ninth Edition, by Mary Hundley DeKuyper Lit t':, AY aY r1 1Ey.Org�D1 _fm?1_temNumber =146372. • School Site Councils? See School -Site Councils by David Peterson del Mar (1994), hnpl /www. re ic.ed.&,Y �RI�W�t7P_>t•t'3it �- �).tentcfeliv�yL�v_1�c/ ER1CServlet ?ac�n� =LC °36915.4 • University Boards of Trustees? See The Effective Board of Trustees by Richard P Chait, Thomas P. Holland, and Barbara E. Taylor (1991), 1AI -B Developing Training Programs for Charter School Governing Board Members Schools. Charter schools that are members of the network can request a team assessment. Composed of volunteers from charter schools statewide, teams conduct interviews and collect observations related to the areas of excellence and prepare an assessment, with recommendations, for individual schools. The evaluation teams have sometimes included governing board members who need support themselves and who learn new strategies by being a part of the evaluation process for another school. Minnesota offers a fourth model of board training; charter school board members participate in trainings de- signed for and attended by traditional local school board members. As a result of their membership in the Minnesota School Boards Association, charter school board mem- bers have access to trainings provided for all members. Many training workshops address issues relating only to charter school board members. However, Jan Rhode of the Minnesota School Boards Association believes that the governance issues facing charter school boards are more similar than different from those facing traditional school boards. Consequently, most of the trainings offered by the association are cross - trainings, despite the fact that rela- tionships between traditional school board members and charter school governing board members are often com- petitive and sometimes adversarial. IMPACT All the training models described in this profile are relatively new, so their long -term impact has not been evaluated. Those involved believe the anecdotal evidence verifies that the training is moving in the right direction and that charter schools within their state will ultimately have effective, func- tional, and well- informed governing boards. This will then lead to a greater focus on students and school performance. To date, the anecdotal evidence includes the following. • In Minnesota, none of the charter schools with gov- erning board members involved in trainings alongside traditional school board members have faced closure because of finance or governance issues. • CharterSTAR has received very positive feedback in Utah regarding the trainings and support it pro- vides, and the same is true for the trainings offered in Nevada. Both states report a high level of charter school board member participation. • CharterSTAR is also training new staff from the Utah Association of Charter Schools to assume responsibil- ity for training charter schools at various stages of de- velopment, from application through board leadership succession. The state charter school association used to be strictly a volunteer organization. CharterSTAR is helping the association achieve long -term sustainability, with the hope that the group will take over training once the dissemination grant expires. • The Idaho Charter School Network reports highly successful team assessments for the schools that have participated so far. LESSONS LEARNED Representatives from the profiled programs believe their training models are replicable in other states. Federal dis- semination funds are available, and Idaho and Utah have used those funds to help boost their training programs and networks of support. Most states also have charter school networks, associations, or resource centers, and all states that have charter schools have staffing already built into the structure of their department of education. The models described in this promising practice profile use, in different ways, the various components of the existing charter school state infrastructure. Implementation Challenges Across all these training models, one implementation chal- lenge has been attracting and sustaining broad participation from charter schools around the state. The team assess- ments in Idaho are voluntary, and participating charter schools have been well - established ones that are looking to fine -tune their processes. Shirley Rau would like to see the state department of education help charter schools with the financial costs of participating in a team assessment. Rau has moved from the Idaho Charter School Network to a position in the state department and is seeking to estab- lish a charter school support grant program that would re- quire all charter schools to go through the process in their first three years of operation and provide financial support for them to do so. In Minnesota, charter school governing board mem- bers, unlike traditional school board members, are not local officials elected through general public elections. Their state school board association membership is modi- fied and limited, and some of the charter schools have Developing Training Programs for Charter School Governing Board Members complained about this arrangement. The Minnesota School Boards Association is a powerful lobbying force in the state. Charter school members do not have any voice or influ- ence in the politics of this association, though they do have their own separate charter school association. Keys to Success All the leaders involved with these models cited the im- portance of honing the willingness of people with expertise to share their knowledge in exciting ways and with true commitment for the charter school movement. Particularly in Idaho, charter school representatives volunteer their time to participate in the assessment teams that visit other schools as peer support. Rau noted that their willingness to participate had a lot to do with the lessons the team members learned by working within the team assessment process. The areas of excellence were developed by char- ter schools in the network, and Rau recommends that each state develop its own context - specific areas for assessing the effectiveness of charter school board governance. In both Idaho and Minnesota, governing board mem- bers, including local school board members in Minnesota, have come to realize that best practices are about running a business, not differences in school philosophies. They see the mutual benefit of collaborating. In Minnesota, reducing the specter of insurance liability is a strong motivator for encouraging traditional adversaries to work together. After observing voluntary training sessions offered in Utah that consistently had low attendance, Steve Winitsky tried a new approach with the regional training sessions. In addition to bringing in a well -known expert on effec- tive boards, he adopted several strategies that he believed led to the high turnout that resulted. First, CharterSTAR charged a small fee of $25 per person. The fact that the workshops were not free indicated a higher level of quality and importance, which encouraged more charter school governing board members to attend. The workshops were also located regionally so no one in the state would have to travel more than an hour or so to attend one of the workshops, and participants were given dinner. Start times were set so members would at most have to leave work a little bit early to arrive on time; ending times assured mem- bers they would be finished at a reasonable hour. Because of these key strategies, nearly every charter school in the state sent representatives of their board to one of the workshops. 5% 91i I 0 FINANCE A GOVEfl NANCE Key Questions for Charter School Governing Boards • Does the board have a plan for how it will conduct the necessary program oversight and maintain fis- cal health? • Does the board engage in regular, ongoing training and development? • Does the board's composition include the skills and expertise needed to govern effectively? • Does the board refer back to the charter school's mission and values as a guide for decisions? • Does the board evaluate itself annually and estab- lish goals for the following year? • Does the board have a leadership succession plan to ensure a smooth transition from one board chair to another? • Does the board have a clear sense of its own author- ity and duties as well as those of the school leaders, parents, teachers, and any service providers? ADDITIONAL COMMENTS The content of the profiled trainings falls into two distinct and equally important categories. The first involves the legal issues of running a charter school, including minutes, finance, staffing, education codes, and open- meeting rules. The second category involves the role of the board within the context of separation of duties from the administrators hired to run the school. Charter school governing boards need to be taught how not to micromanage but still main- tain knowledge of what is going on in the school. Governing boards' roles should be limited to policy setting and general oversight. Although all charter school boards have certain similar needs, states must design training content to fit the unique needs of their charter schools. USEFUL RESOURCES • Charter Starters: Leadership Training Workbook on Governance and Management by Northwest Regional Educational Laboratory, http: / /www.nvvrel.org /comm/ catalo /detail.asp ?RID= 12658. • Creating Effective Governing Boards by Frank Martinelli for the Charter Friends National Network, www.uscharterschools.org/gb /governance /.. Developing Training Programs for Charter School Governing Board Members • Fundamentals of School Board Membership: A Guide for Newly- Elected Charter School Board Members by the Minnesota School Boards Association, http: / /www hhh.umn.edu/ centers /school- change /handbook/ running.htm. • Information on the Broad Institute for School Boards: htti): / /www.crss.org /tbisb.htm. • Information on the Carver Model of governance: http. www.carvergovernance.com /. CONTACT INFORMATION Kim Fanter Idaho Charter School Network 1910 University Drive, MS 1745 Boise, ID 83725 -1745 208 - 229 -7000 klfanter@ctcweb.net http : / /csi.boisestate.edu /icsn.htm Tom McCormack Nevada State Board of Education Carson City Main Location 700 East Fifth Street Carson City, NV 89701 775 - 687 -9149 tmccormackQdoe.nv.gov www.doe.nv.gov Jan Rhode Minnesota School Boards Association 1900 West Jefferson Avenue St. Peter, MN 56082 800 - 324 -4459 irhodeQmnmsba.org www.mnmsba.org Steve Winitzky— CharterSTAR John Hancock Charter School 125 North 100 East Pleasant Grove, UT 84062 801- 232 -6850 steveUcha rte rstar.org www.utahcharters.org American Enterprise Institute for Public Policy Research 1� No. 4 i October 2007 Reimaglning American Schooling: The Case for Educational Entrepreneurship By Frederick M. Hess To an unprecedented degree, this is the era of educational entrepreneurship. Dynamic new thinkers have waded into the world of K -12 education, founded influential organizations, and shattered familiar con- ventions. They have developed new models for delivering instruction and recruiting teachers and at the same time have applied old - fashioned practices with newly inspired fidelity. While their efforts constitute a still - minuscule portion of schooling, they are responsible for many of the most exciting developments in twenty -first century education. Is this a good thing? What does it mean, and what does it imply for school reform and policy? ` Ventures such as Wireless Generation are at the forefront of an increasingly entrepreneurial school reform movement. The New York City–based firm provides schools with diagnostic software that operates on handheld computers, allowing teach- ers to identify student needs and chart progress while circling the classroom. Growing Stars, a Califomia -based company that provides tutoring for American students using instructors based in India, is another example. Able to hire educated Indians at a steep discount, Growing Stars and its competitors are charging Americans $20 hourly for personal tutoring, less than half the prevailing rate in much of the United States. The pioneers of this movement include groups that are now almost household names: KIPP Academies, K12 Inc., Teach For America, the Edison Schools, Catapult Learning, and the New Teacher Project. These successful models suggest that it may indeed be possible to reimagine Ameri- can schooling. But can the entrepreneurial spirits Frederick M. Hess is a resident scholar and director of education policy studies at AEI. A longer version of this article appeared in the September 2007 issue of Phi Delta Kappan. be bottled —or institutionalized? And, in an era also marked by devotion to "best practices" and "systemic reform," do they have the capacity to fundamentally change education policy and prac- tice for the better? Why Entrepreneurship Is Important Educational entrepreneurship, ignored for so long, is now gaining our attention for three reasons: One has to do with new challenges, and the others with new opportunities. First, American schools today confront challenges that our education system was not designed —and may not be equipped —to handle. Arrangements that may have worked adequately fifty years ago no longer suffice. Developed haphaz- ardly over the course of two centuries, our status quo is not equal to the requirements of contempo- rary citizenship, employment, or higher education. Decades of earnest efforts to reform public schools have shown remarkably little ability to alter routines or results substantively. Tides of reform have rolled out and in and out again, with little attention paid to implementing new proposals or 1150 Seventeenth Street, N.W., Washington, D.C. 20036 202.862.5800 wwtv.aei.org -2- ensuring that schools and school systems are serious about them. Do entrepreneurial efforts threaten to be merely more of the same? The short answer is no. The problem has never been innovation per se, but a failure to root innovation in coherent, focused organizations. In public bureaucracies like America's school districts —which are led by offi- cials who lack the tools to compel cooperation and where keeping one's head down is the safest professional approach— implementation tends to be half - baked. The results are predictable. American schools today confront challenges that our education system was not designed —and may not be equipped —to handle. Successful entrepreneurs, on the other hand, build coherent organizations populated by committed, self - selected team members. As management scholars Sumantra Ghoshal and Christopher Bartlett have explained, "On the organizational trapeze, individuals will take the entrepreneurial leap only if they believe there will be a strong and supportive pair of hands at the other end to catch them." 1 Second, in the United States today, it is estimated that more than a thousand new business ventures are born every hour of every working day.2 This dynamism is a familiar feature of American life but not of school reform —and that is an enormous problem. In the 1960s, the Bureau of Labor Statistics reported that college gradu- ates could expect to hold five jobs in the course of their lives. College graduates today can expect to hold four jobs by the age of thirty. Not only are talented, college - educated women no longer obligated to accept teaching jobs, but promising college graduates in general are far less willing to patiently queue up in the seniority- driven bureaucracies of the educational establishment. Advances in technology and communications have created new possibilities for autonomy, decentralization, and customization. In 1991, when the first charter school law was adopted, the Internet as most of us know it did not exist. By 2004, the U.S. Census Bureau reported that 61 percent of households had Internet access. In 1993, -just 23 percent of households owned a computer. By 2004, two- thirds did.3 The iPod did not exist in 2000; by 2007, more than 100 million had been sold worldwide. This technological revolution has created previously unimaginable communication and instruc- tional opportunities. In education, changes in policy, including charter schooling and the relaxation of teacher licensure restric- tions, have made schooling more hospitable for entrepre- neurs. As of 2003, more than 20 percent of public school districts had students enrolled in online courses offered by their schools .4 By 2005, at least one virtual school was operating in almost every state .5 Finally, the advent of educational accountability has made entrepreneurship newly feasible. For nontradi- tional schooling or services to prove practicable, the providers must be held responsible for the results of their handiwork. Prior to the spread of sophisticated testing and benchmarking systems, the necessary tools simply did not exist. Making Entrepreneurship Work For all the stirring prose that business books devote to entrepreneurs, the truth is that entrepreneurship is a headache. In fact, most proposed ideas are flawed. Scholars estimate that 60 percent of all new products are abandoned before they ever reach the market, and nearly half of those that do reach the market do not pan out.6 It is understandable then that most professional edu- cators and education scholars think the entrepreneurial premise is counterproductive and misguided for school- ing. New ideas in education probably fail at the same rate as new ideas in the market. Hesitant to contemplate "risky" alternatives when dealing with children, most education reformers -on the right and the left —prefer solutions that minimize risk. However, there is plenty of evidence that the entre- preneurial endeavor unearths many Bill Gateses and Fred Smiths, individuals who then build large -scale organizations that make high - quality, affordable products or services —like software or parcel delivery—that bene- fit tens or hundreds of millions of people. The entrepreneurial presumption acknowledges that progress is messy, partly because workable solutions change over time. What worked in 1950 may not prove as effective in 2000. New ideas are, by definition, untested, and new solutions will emerge from trial and error. Clay- ton Christensen, coauthor of The Innovator's Solution, has reported that in over 90 percent of all successful new -3- businesses, the strategy the founders deliberately adopted was not the strategy that ultimately led to success.? Entrepreneurs reject the notion that we can somehow anticipate the future and then race there in an orderly fashion. A key problem impeding progress is that our imaginations are constrained by what we already know. Chris Whittle, founder of the Edison Schools, has observed, "There was a time in aviation when the propeller was the only way to move a plane forward. Designers could not envision getting beyond a certain speed with a prop. Then came jet engines, and the speed of airplanes doubled overnight and eventually tripled."$ As Robert Laughlin, winner of the 1998 Nobel Prize in physics, has admonished, "The search for new things always looks like a lost cause until one makes a discov- ery. If it were obvious what was there, one would not have to look for it. "9 If giants in other sectors must rely on trial and error rather than prescience, humility may be in order for education reformers as well. In education, even leaders heralded for their entre- preneurial bent are often more enamored with yester- day's entrepreneurial successes than with nurturing tomorrow's entrepreneurs. More than a few "cutting, edge" superintendents tackle school reinvention by identifying some seemingly successful models and saying, "I want more of those in my district" Because today's winners are simply the best at what we already do, enshrining today's best practices in statutes or policies can impede new providers and hinder the next genera- tion of problem - solvers. For instance, while the KIPP Academies boast an impressive track record and national acclaim, the founders are the first to explain that their greatest tri- umph is proficiently executing a traditional model of schooling— rather than reengineering educational deliv- ery. They have succeeded by relentlessly focusing on results, recruiting talented educators, working long hours, and forging a culture of commitment. KIPP should be celebrated but as an inkling of what an entrepreneurial environment makes possible rather than the culmination of that process. Entrepreneurship Is Not School Choice One common mistake is to conflate entrepreneurship in education with charter schooling or school vouchers. It may be easy to assume blithely that those who support charters or vouchers are in favor of markets and entre- preneurship, and that endorsing entrepreneurship can be reduced to supporting choice -based reform. But that assumes a fundamental misunderstanding of entrepre- neurship. Ultimately, entrepreneurship is not about "choices" —the demand side of the famous supply and demand curve —so much as it is about a process of rein- vention and Darwinian selection —in other words, the supply side of that curve. Hesitant to contemplate "risky" alternatives when dealing with children, most education reformers —on the right and the left— prefer solutions that minimize risk. Entrepreneurship requires choice to be coupled with opportunities for entrepreneurs to enter the field, obtain resources, recruit talent, and benefit from their successes. Choice fosters entrepreneurship only to the extent that it promotes these opportunities. For instance, Belgium has one of the world's most expansive choice -based sys- tems, but few observers would suggest that the country is a hotbed of educational entrepreneurship. In 1975, resi- dents of Moscow could choose from scores of grocery stores, yet their bare shelves exposed the absence of a vibrant and entrepreneurial marketplace. The tendency of school- choice supporters to focus narrowly on charter schooling or school vouchers leads observers to miss this critical point and has fostered much confusion about what choice -based reform is likely to produce. Choice -based arrangements are neither necessary nor sufficient for educational entrepreneurship. They are unnecessary because, at least in theory, a vibrant entre- preneurial sector can deliver educational services, tools, and products absent additional school choice. For instance, tutoring companies and education manage- ment firms can compete to contract with traditional public schools or districts. They are insufficient because removing formal barriers to new schools is only one step on the path to nurturing entrepreneurial activity. Rejecting a New "One Best System" What, then, does this mean for policy and for school reform? Since the 1974 publication of education historian David Tyack's seminal The One Best System, much analysis has proceeded from the premise that the factory- inspired urban school systems we have inherited need to be -4- redesigned.10 Many efforts have centered on devising "best practices" that could provide a new, improved tem- plate. In many ways, the struggle has been to replace the "one best system" of the twentieth century with a new model for the twenty-first century that incorporates the "best" instructional practices, staffing patterns, reading programs, and governance arrangements. Education finance should be configured to accommodate nonprofit and for - profit providers of niche instructional services and to reward cost - effective performance. The entrepreneurial presumption rejects that aim. Rather than determine what schooling "should" look like in 2030 or 2040, it recommends a system that con- tinuously welcomes talent, focuses on results, rewards success, purges failures, and does not stifle the emergence of better solutions. Five essential principles should guide the design of such a system. First, this system must be dynamic and responsive to the challenges presented by a changing world. This requires the dissolution of familiar monopolies and the removal of barriers that stand in the way of new providers. A dynamic sector demands new knowledge, produced by a rigorous model of research and development and sup- ported by public and private investment. This R&D model should emulate such areas as medicine and tech- nology, where products and services deemed state- of -the- art in 1987 now seem hopelessly antiquated. Second, a healthy entrepreneurial environment is transparent, with clear accountability for learning, ser- vice provision, and financial practices. It requires readily available data on student learning and various other per- formance considerations (from procurement to mainte- nance to hiring) and compels providers to compete on both quality and cost. Third, the system should strive to attract and nurture excellence. Whereas today's school systems too often favor seniority, obedience, and uniformity, the entrepre- neurial aim should be to create a culture of meritocracy in which teachers and school leaders have the opportu- nity and tools to succeed. The training pipeline for edu- cators should be rethought accordingly to reduce the emphasis on formal certification while focusing on selecting high - quality candidates and adding value. Fourth, today's funding arrangements discourage cre- ative problem - solving, the emergence of niche providers, and the search for new efficiencies. State and federal regu- lations require nearly every district to provide similar bundles of services, while districts rarely use specialized providers to improve performance when it comes to services like human resources, facilities, or remedial instruction. Education finance should be configured to accommodate nonprofit and for - profit providers of niche instructional services and to reward cost- effective performance. Finally, schooling must move decisively away from a system governed by inputs and regulation to one ordered around individuals and results. This requires recognizing students' varying needs and conceding that education is not a one - size - fits -all enterprise. For instance, the kind of accountability favored by No Child Left Behind (NCLB), which is premised on tracking average student performance across conventionally organized grades, constricts the scope of entrepreneurial activity. In fact, for all the claims by proponents of NCLB, the law has done little to reduce the tangle of rules and procedures that enmesh schools and providers. Indeed, in more than a few places, it has sprouted new ones. The challenge is to design a system in which tomor- row's entrepreneurs can focus on solving problems rather than dismantling the roadblocks we have unwittingly strewn in their path. For that reason, popular proposals to limit class size or to require that districts spend 65 percent of their funding "in the classroom" are counterproductive. Such mandates will stifle anew generation of educators just as thoroughly as collective - bargaining provisions and licensure regulations have hampered the current one. The goal ought not to be to erect new "twenty-first century" buildings and policies that will serve as monuments a half - century from now, but rather to create a system capable of growing with those it exists to serve. Creating an Entrepreneurial Environment Broadly speaking, there are three sets of obstacles block- ing the way: barriers to entry of new providers, a lack of venture capital, and a pinched pipeline for human capi- tal. The discussion below is not intended to be exhaus- tive, but it does sketch the shapes of potential reforms and some of the relevant considerations. Barriers to Entry. Barriers to entry are the laws, rules, and practices that make it harder or more costly to launch a new venture. Such barriers include everything -5- from regulations hindering the opening of a charter school to textbook approval systems so onerous that only the largest publishers can successfully compete. Barriers worth particular attention are those that inhibit the opening of new schools or impose restraints on how new providers can operate. New charter schools, for instance, face enormous dif- ficulties gaining access to venture capital and facilities. Because current practices presume that local districts will own and manage school buildings, it is frequently diffi- cult for entrepreneurs to secure appropriate facilities. 11 New entrants must plead with conventional public schools —their ostensible competition —or scramble to make do with nontraditional facilities. The Education Commission of the States has reported that less than a dozen states provide startup or planning grants for char- ter schools, and barely half of those with charter laws provide any support for facilities. 12 Meanwhile, state regulations make school facilities prohibitively expen- sive. A New York City school commission reported in 2002 that it costs about 40 percent more per square foot for the city to build schools than to build local office buildings, luxury condos, or hospitals.13 One step that could significantly level the playing field for entrepreneurs would be removing control of school facilities from local districts and handing it over to a special - purpose entity. One promising approach to this is the development of independent "real estate trusts" in which the construction and management of school facil- ities are separate from the traditional school district. Such a trust could ensure that the facilities are profes- sionally managed while enabling alternative providers to compete more readily for suitable facilities. 14 Formal barriers to entry may be highly visible, but they are coupled with less obvious obstacles that can prove equally significant. For instance, state financing systems consistently fund charter schools at lower levels than traditional district schools and restrict their ability to hire nontraditional teachers. As a general rule, making schooling more hospitable to entrepreneurship requires, where appropriate, improv- ing the clarity and rigor of outcome expectations while removing the hurdles that hinder new ventures. In today's environment of accountability, this shift is feasi- ble to a degree inconceivable even a decade ago. Venture Capital. New ventures can neither launch nor grow without money. There are three general sources that can be tapped to support educational start-ups: profit- seeking investors, nonprofit associations, and public agencies. Historically, in most sectors, profit - seeking dollars have driven the entrepreneurial engine, provided by either venture capital funds or wealthy individuals. The K -12 sector is dominated by government spend- ing. State, local, and federal governments spent over $500 billion in 2005 on K -12 schooling —about 90 per- cent of all money expended on public and private schools. However, the vast majority of this spending is dedicated to salaries, benefits, school operations, and other routine line items. Very little is available for research, develop- ment, or new ventures. A New York City school commission reported in 2002 that it costs about 40 percent more per square foot for the city to build schools than to build local office buildings, luxury condos, or hospitals. As University of Washington professor Paul Hill has concluded, "Public school systems can be fully open to entrepreneurship only if money that is now tied up can be released and reallocated. "15 Indianapolis mayor Bart Peterson has launched a public - private partnership in which the city will incubate and support entrepreneurs for a year or two while they plan and launch new charter schools. Joel Klein, chancellor of the New York City schools, has relied on a mixture of public and private funds to recruit new leaders and develop new schools. Promising measures to reallocate public funding to sup- port entrepreneurial efforts might include providing loan guarantees for new ventures, financing start-up costs, and assisting public - private partnerships. For - profit investment has been rare because capital typically flows to ventures that offer an attractive, risk - adjusted return, which has generally not existed in schooling. But there are steps that would help the sector attract more private funding to support research, devel- opment, and creative problem solving. For instance, clear standards for judging effectiveness can reassure investors that ventures will be less subject to political influence and better positioned to succeed if demonstra- bly effective. Entrepreneur- friendly reform is also under- mined directly by statutes that restrict the involvement of for - profit firms in school management. Given the dearth of private investment and the con- strained nature of public spending, entrepreneurial ven- tures to date have been disproportionately funded by the tiny sliver of money philanthropies contribute – especially funds from younger foundations with roots in the new economy. Traditionally, foundations have sought to avoid controversy, pay attention to professional direction, and foster consensus. Today, however, several of the most influential education philanthropies— including the Gates, Walton, and Broad foundations —are consciously supporting riskier, less conventional endeavors. Perhaps the most interesting example is the NewSchools Venture Fund, a "venture philanthropy" that secures investments from third parties and then seeks to provide start -up capital to scaleable, sustainable breakthrough ventures — both nonprofit and for - profit. Hiring practices in many large districts are painfully slow, which alienates attractive candidates. Human Capital Pipeline. Reducing barriers to entry and increasing available capital are all well and good, but they will matter little if there are no people willing and able to take advantage of new opportunities. The chal- lenge is to attract a mass of talented and energetic indi- viduals, retain and cultivate promising problem solvers, and develop an infrastructure to support their efforts. Today, licensing requirements are among the factors that deter people from entering education. Hiring prac- tices in many large districts are painfully slow, which alienates attractive candidates.16 Inflexible compensa- tion systems penalize mobile workers, do little to reward top performers, and provide expansive benefits that are most attractive to those who stay in place for decades. In short, schools are organized much like factories in the 1950s. Measures to produce a more entrepreneur- friendly environment include loosening certification barriers, basing compensation on performance rather than senior- ity, and multiplying opportunities for professional growth and advancement. Some of the greatest successes in expanding the talent pipeline have been the result of entrepreneurial activity. Teach For America (TFA) has brought more than 17,000 high- achieving college graduates into schools since 1990. TFA alums launched the KIPP Academies; created high- achieving schools like the HEROES Academy in Texas; and founded the New Teacher Project (TNTP), itself a program for recruiting new urban teachers. Since 1997, TNTP has recruited over 13,000 teachers.17 Mean- while, organizations such as the EdVisions Cooperative are attracting and retaining educators who might other- wise leave education for more hospitable environs. Such efforts have brought individuals with an entre- preneurial bent into schooling, but potential entrepre- neurs require seasoning and experience as well as energy and a fresh perspective on familiar challenges. Unfortu- nately, the vast majority of TFA recruits and other high, achieving new entrants in schooling depart within a few years. This is a problem because most successful entre- preneurs get their ideas through previous employment and experience; a 2004 study of the nation's 500 fastest - growing companies found that more than half of the founders got the idea for their new venture in the indus- try they already worked in, and another quarter, in a related field.18 There is no substitute for a pipeline of energetic veterans who have worked in the sector, gained experience, and accumulated contacts. Networks that allow potential entrepreneurs to expe- rience education from various vantage points, find men- tors and supporters, and link up with kindred spirits are critical in any entrepreneurial ecosystem. Organizations like KIPP, TFA, and the NewSchools Venture Fund are forging informal networks, but such efforts are only a tentative first step. Today, little such machinery exists to cultivate would -be educational entrepreneurs, allow them to grow, or bring them into contact with potential funders. Young educators work alone in their classrooms, gain little non - classroom experience or responsibility, develop networks restricted to other teachers, and obtain no insight into team management or the demands of launching a new enterprise. In other sectors, young workers move easily among ventures, gain experience and responsibility, build networks of mentors and peers, and learn to imagine and design new ventures. Helpful steps might entail creating new roles inside or outside of school districts that would allow qualified candidates to work with teams on improving processes or practices in areas like curricular design, training, data management, recruiting, and technology integration. Little Ventured or Gained In the end, an entrepreneurial perspective raises the question: In the twenty -first century, is it possible to .7. educate children in radically more effective ways? If 3. U.S. Bureau of the Census, Computer Use in the United familiar arrangements will not do, who are the pioneers States (Washington, DC: U.S. Bureau of the Census, Current willing to stumble forward in the dark to find better answers, and how willing are we to provide the oppor- tunities, tools, and support they need? The paradox of entrepreneurship is that it accepts the risk that some ventures will fail in order to avoid a larger risk -- persistent mediocrity. The entrepreneurial premise can frustrate educational specialists because it does not deliver clean "solutions " - whether brain -based theories of leaming or pat guidance on instruction. Instead, it opens the field to emerging models of excellence. And efforts to cultivate the supply side of reform must be cou- pled with attention to devising new, more nimble sys- tems of knowledge creation and quality control that can help education leaders, policymakers, and entrepreneurs negotiate the challenges of modem school reform. Entrepreneurship is not about instant solutions to today's problems. In K -12 education, where all parties are quick to declare grandiose aims and demand immedi- ate solutions, such a stance approaches apostasy. None- theless, the greatest educational risk we confront today lies not in embracing entrepreneurship but in continuing to cling to an inadequate and increasingly anachronistic status quo. The failed ideas, providers, and schools pro- duced by entrepreneurial activity may be a high price to pay. But it is a price worth paying to avoid the stagna- tion and ceaseless tinkering that have for so long been the face of school reform. AEI web editor Laura Drinkwine worked with Mr. Hess to edit and produce this Education Outlook. Notes 1. Sumantra Ghoshal and Christopher A. Bartlett, The Indi- vidualized Corporation: A Fundamentally New Approach to Man- agement (New York: HarperBusiness, 1999), 93. 2. William D. Bygrave, "The Entrepreneurial Process," in William D. Bygrave and Andrew Zacharakis, eds., The Portable MBA in Entrepreneurship, 3rd ed. (Hoboken, NJ: Wiley, 2004),1-27. Population Survey Reports, October 1993), Table A. 4. National Center for Education Statistics, Distance Educa- tion Courses for Public Elementary and Secondary School Students: 2002 -03 (Washington, DC: National Center for Education Sta- tistics, March 2005), 4, 10. 5. John F. Watson, Keeping Pace with K -I2 Online Learning: A Review of State -Level Policies and Practices (Naperville, IL: Leaming Point Associates, October 2005). 6. Clayton M. Christensen and Michael E. Raynor, The Innovator's Solution: Creating and Sustaining Successful Growth (Boston: Harvard Business School Press, 2003), 73. 7. Ibid., 221. 8. Chris Whittle, Crash Course: Imagining a Better Future for Public Education (New York: Riverhead Books, 2005), 129. 9. Robert B. Laughlin, "Reinventing Physics: The Search for the Real Frontier," Chronicle of Higher Education, February 11, 2005. 10. David B. Tyack, The One Best System: A History of American Urban Education (Cambridge, MA: Harvard Univer- sity Press, 1974). 11. Sara Mead, Capital Campaign: Early Returns on District of Columbia Charter Schools (Washington, DC: Progressive Policy Institute, October 2005). 12. Charter School Finance (Denver: Education Commission of the States, April 2003). 13. Joe Williams, Cheating Our Kids: How Politics and Greed Ruin Education (New York: Palgrave Macmillan, 2005), 23 -25. 14. Michael DeArmond, "Getting Out of the Facilities Busi- ness: A Public School Real Estate Trust," in Paul T. Hill and James Harvey, eds, Making School Reform Work (Washington, DC: Brookings Institution Press, 2004), 26-40. 15. Paul T. Hill, "Entrepreneurship in K -12 Public Educa- tion," in Marilyn Kourilsky and William B. Walstad, eds., Social Entrepreneurship (Dublin: Senate Hall, 2003), 71. 16. Jessica Levin and Meredith Quinn, Missed Opportunities: How We Keep High - Quality Teachers out of Urban Classrooms (New York: The New Teacher Project, 2003). 17. The New Teacher Project, "Who We Are," available at www.tntp.org /whoweare /overview.html (accessed October 16, 2007). 18. William D. Bygrave, "The Entrepreneurial Process," 4• #22313 ALWAYS CARRY DRY SOCKS: SIX LESSONS FOR CHARTER SCHOOL LEADERS I LEARNED IN THE MARINE CORPS by Brian L. Carpenter CEO National Charter Schools Institute Introduction It is with some amusement that I reflect back on the first day of my new job, November 23, 1977. Some- time around 2:00 a.m. I found myself standing straight as a two -by -four in a pair of yellow footprints painted on the pavement. Several Marine sergeants were whirl- ing around our newly arrived platoon like tornadoes, roaring orders and hurling invectives. It's humorous now after nearly 30 years, but at the time —as anyone who's been there and done that can attest it wasn't funny. The Corps set me on a path of believing that I could achieve anything I put my mind to. Eventually, I ended up serving seven years on active duty, all stateside and mostly in peacetime. I will always remain deeply grati- fied to be part of that "band of brothers' —a term of fraternity among Marines long before the superb spe- cial aired on HBO by the same name. Many of the leadership and survival lessons I learned in the Marines proved applicable to civilian life. This was never more true than during my years as a school superintendent in independent schools. Such schools face similar challenges as charter schools, in- cluding having to compete for enrollment and teachers. Like the process of becoming a Marine, I learned that becoming an effective school leader is learned in the crucible of daily management. School leadership is a job that often requires more than 60 hours a week, day and night. You are both a servant and a boss —a paradoxical role that is sometimes difficult. You're never off. You can't go to a restaurant, church or the fit- ness center without a parent, teacher or student who wants to take 'Just a couple of minutes" to voice their problems or concerns. And you have multiple constituents, in- cluding children, parents, teachers, support staff, coaches, churches, the community, board members and donors. They all have expectations that not only differ from one another within and between groups, but each also expects that their position on any given matter should prevail. I figured out pretty early that it is impossible to make any decision—no matter how triv- ial —that satisfies all the school's constituents. After 12 years, I laid aside administrative leadership of schools. I sometimes joke with some of my friends that I'm a "recovering superintendent," having not run a school since the summer of 2002. This almost always evokes a knowing laugh among those who have actu- ally done the job. The serious reality is that it's a de- manding job that requires tough - minded leadership. These days, I'm about the business of taking what I've learned and using it to help charter schools im- prove by providing research, writing, technical assis- tance and leadership training. One of my favorite aphorisms is that "nothing ever rises above its leadership." This is just as true of char- ter schools as it is of the Marine Corps. In fact, I don't think it's an overstatement to say that the success of the entire charter school sector depends in a very large part on the effectiveness of its school leaders. The purpose of this paper is to share a few leader- ship lessons I learned in the Marines to inspire and en- courage charter school leaders to `Be all you can be." (That's Army, but what a great tagline!). © 2006 National Charter Schools Institute 1 Rev 02/07 Leading a school —if you're to be effective over the long haul — requires the same kind of self - preservation. That is, you must intentionally create strategies to ensure that your physical, emotional and spiritual needs won't be ignored be- cause of the demands of your job. Lesson One: Always Carry Dry Socks A typical publication about leader- ship lessons one learns in the Marine Corps — several good ones exist— usually begins with mission, team- work, Corps values, and the like. This is not a typical publication. Instead, I begin with the admoni- tion to always carry dry socks. It was one of the first lessons I learned in the Marine Corps —the hard way. The sky threatened rain as we started the morning on our first field training exercises. Around noon chow (i.e., lunchtime), it began to sprinkle. By mid - afternoon the down- pour had become relentless. Of course, you wouldn't expect a little precipitation to stop Marines. We slogged around the remainder of the afternoon, including scaling a hillside known to us by its slang (unprintable) name. While not lin- guistically or logically correct, it would nevertheless be accurate to say that because of all the mud and water, we fell up the hill. By the time evening chow rolled around, we were wet and tired. With only a few minutes to inhale our C- rations and prepare for evening live -fire exercises, we were told to change socks. Most of the recruits dug through their packs and dial so. As you've proba- bly guessed, I forgot mine. Your feet are funny things. If they are dry and warm, the rest of your body (except for your head) can withstand being wet and cold. On the other hand (no pun intended), if your socks are wet for several hours on end, your feet get cold and begin to hurt like the dickens. The discom- fort you feel in the rest of your body seems multiplied many times over. Thus, the learning curve for young Marines to remember to pack dry socks is a short one. So how does carrying dry socks relate to school leadership? Leading a school —if you're to be effective over the long haul— requires the same kind of self - preservation. That is, you must intentionally create strategies to ensure that your physi- cal, emotional and spiritual needs won't be ignored because of the de- mands of your job. For example, during several years of leading schools, I stopped working out. "No time," I told my- self as I sat at my desk and plod- ded through sheaves of paperwork. I also allowed myself to miss too many evening meals with my wife and daughters. "No time," I told my wife. "I'll eat later." When my daughters wanted to play or go somewhere, I too often said, "No time. Daddy has to work." The accumulated effects of a largely sedentary role eventually presented their bill in the form of undesirable health. My failure to keep dry socks in the way of fam- ily time (including vacations) left my wife and daughters feeling stressed and distant from me. My failure to engage in leisure reading or hobbies turned me into a dull, one - dimensional person. These failures did not make me a better school leader. They made me tired, overweight, unhappy, impatient and largely dissatisfied with my work. They certainly did not make me a better husband or father —a dereliction of duties (to use the Marine term)--of my pri- mary leadership responsibilities. Finally, when the pain became great enough, I decided to make some life changes. © 2006 National Charter Schools Institute 2 Rev 02/07 I began by shedding 70 pounds. I threw away my hypertension pills. I now workout several times a week. I spend more time with my wife and daughters, even though the elder at- tends a college hours away from home. I read a couple of books every month just for pleasure. My wife says I'm a lot more fun to be around, too. I'm definitely a happier person. Given the quality -of -life differ- ences, I sometimes now wonder why I didn't always carry dry socks. You won't catch me without them again. Lesson Two: Remember the Six 'T's" One evening after a long hot day of war games in the middle of the Southwestern desert, we received orders to pack up our gear and move the entire unit. We were all past the point of being tired, but such de- mands are common and necessary because training is nothing more than rehearsing for combat. And as everyone knows, combat is unpre- dictable, so rehearsing for it has to contain elements of unpredictability. So we began the mount -out proc- ess. First, we packed our personal gear and loaded it on to trucks. Then everyone worked as a team to disas- semble the large tents that served as shelters, work areas, chow halls, first aid stations and so on. This was a big job, but a few hundred Marines working together made short work of it. All the tents were also loaded onto trucks and driven through the cool desert night to the new encamp- ment area where the process was reversed. The hours dragged on after we arrived at the new area. As we fi- nally neared completion of the set- up, the ridiculous occurred. Our commanding officer (CO) showed up and determined that the camp was set -up at the wrong coor- dinates. He ordered us to tear it all down again and move it a few hun- dred meters to the east. What fol- lowed was a disorganized free -for- all as the Marines begrudgingly moved the camp. At one point, I stood back to sur- vey the process. A good friend of mine walked up and even in the dark he was able to make out the look of frustration on my face. He cracked a joke; it found its mark and we both laughed. We then proceeded to talk about how messed up the entire night had been. We knew that the six "P's," as they are called by Marines, had been ignored: Prior proper plan- ning prevents poor performance. (A seventh purely adjectival "P" may be inserted at one's discretion before the word "poor" to emphasize the point in some extreme instances!) What we realized, but were not in a position to influence because of our place in the chain of command, was that someone's failure to prop- erly plan and communicate resulted in a long night and a bunch of tired, de- motivated Marines. A school leader is the organiza- tional equivalent of a commanding officer (though it is generally more effective as a civilian to lead through collaborating than commanding). As such, every school reflects the leader's strengths and weaknesses. Effective leaders live by the .six "P's" because prior proper planning really does prevent poor performance. And here's a secret weapon for schools in the planning arsenal: Ninety percent of everything that occurs dur- ing any given school year will happen all over again the next year. Think about it. Every year, the Ninety percent of everything that occurs during any given school year will happen all over again the next year. © 2006 National Charter Schools Institute 3 Rev 02/07 It is good to give some brainstorming and discussion time to contingency plans for things that are not cyclical. following things are definitely going to happen, whether they are properly planned for: • Interviewing and hiring • Ordering curriculum • Sports events • Testing • Board meetings • Reporting (required state and local reports, grade cards, etc.) • Budgeting • Scheduling (daily classes, etc.) • Hosting ceremonies (graduation, holiday produc- tions, etc.) It is precisely because these things are cyclical that the school leader has an advantage over the Marine CO. The school leader knows approxi- mately when these things will occur and he or she can influence the per- formance of the school by giving appropriate time to the discipline of planning. Here's an added tip for those looking to improve their ability to plan, execute and evaluate. The sin- gle best seminar I ever attended on planning wasn't in the Corps. It was a one -day Franklin Covey seminar. Although I thought I was a good planner prior to the seminar, a fellow school leader (also a military colleague) said the event had been "life - changing" for him and that if I would attend but didn't agree, he would per- sonally refund my seminar fee. How could I pass that up? After the seminar, I had to concur with my friend's opinion. It was life - changing. The first thing I did was to go back to the school and register my four principal colleagues for the next seminar. Although I'm not in a position to make you the same guarantee, I am willing to say this in print: The course was one of the best one -day investments I've ever made in my entire career. One final thought on planning. I mentioned previously that 90 per- cent of what occurs during the school year is cyclical. What about the other 10 percent? It is good to give some brain- storming and discussion time to con- tingency plans for things that are not cyclical. For example, what are you going to do if: • a chemical pipeline near the school explodes, spewing tox- ins into the air? • a female teacher comes into your office and complains that a male teacher just groped her in the hallway? • a parent calls to complain that her teenage son has bruises because other boys on the baseball team subjected hum to an initiation rite on the bus re- turning from winning an im- portant game? • the county inspector arrives to shutdown a rural school that gets its water from a well that the inspector says is unsani- tary? • a kindergarten child gets left behind on a field trip? • a tornado warning occurs? Every situation above occurred in schools while I was head, along with other such 10 percent situations. It helps to have given advance plan- ning to such things. Eventually, things do occur; you just can't pre- dict when. Your contingency plans will change as the circumstances necessi- tate, but it's better to anticipate and think through a likely course of ac- tion when things are running ©-2006 National Charter Schools Institute 4 Rev 02/07 smoothly. You can figure out the rest as the situation unfolds. The six T's" are your friend. No sense in waiting until the building is burning down to find the exits. Lesson Three: Check the Milk Cartons I'd like to introduce youlo my dad, Master Sergeant Gary R Carpenter, USMC (Retired). At 70, he'd admit that he's not quite the lean, green, fighting ma- chine he was in his earlier days as an infantry leader. But I guarantee you'd still want him on your side in a dark alley conflict. I've learned more than one leadership lesson from him over the years, including the les- son of checking the milk�cartons. Years ago, his unit was war gam- ing in Norway. He tells the story of how their Norwegian hosts were kind enough to supply them with morning chow. Every morning, a Norwegian Army supply truck would roll up to where dad's unit was encamped and deliver cartons of food. It was deli- cious, especially the freshly baked loaves of bread. Compared to the usual Marine fare of C- rations or powdered eggs, it was a feast. But when one of the Marines reached for his half pint of milk, he shook it and noticed that instead of a light splashing sound, the contents in the little cardboard carton made only a dense sloshing. Not wanting the putrid smell of sour, curdled milk to permeate the air, he threw it out and promptly spread the word to others to do the same. Everyone's carton made the same sound. Instead of milk, they washed breakfast down with canteen water and field coffee. Early the following morning, the Norwegian chow truck rumbled in again. The Marines were happy to have some great chow but someone noticed again that the milk cartons were in the same shape. This time they didn't even distribute them to the troops. They discarded all of them unopened. Next day, same thing. Several more days went by with the fresh food and sour milk.deliver- ies. Finally one morning, one Marine decided to inspect the contents of one of these pints. On the outside, the carton looked ordinary, except of course, everything was written in Norwegian. When he opened it how- ever, he was astounded to see, not sour milk, but what my dad de- scribes as the thickest, sweetest blue- berry preserves you've ever tasted! And they had been throwing the stuff away by the gallons. Ugh. As a blueberry lover myself, I still share his sense of lament when I think about all those perfectly good discarded cartons of wonderful pre- serves. My dad and I laugh, too, when we think about his Norwegian hosts coming behind them to pick up the trash. They had to have been thinking, "What's wrong with Ameri- can Marines ?" At a summer school leadership conference cocktail hour, I once asked the wife of a prominent head- master friend what she attributed her husband's success to. He had man- aged to build a good relationship with a sometimes flighty board and had raised millions of dollars for the school. Student performance was high, and within a few years, enroll- ment was through the roof. Without hesitating, she said, "He takes the long view of things." I've pondered that simple state- I'd like to introduce you to my dad, Master Sergeant Gary R Carpenter, USMC (Retired) .... I've learned more than one leadership lesson from him over the years, including the lesson of checking the milk cartons. © 2006 National Charter Schools Institute 5 Rev 02/07 A quickening of two or three steps at the front of the column can leave the poor guys in the back having to run to keep up. If the CO fails to maintain a steady pace, the guys at the rear of the column can spend the entire time alternating between standing still and sprinting. ment many times. I think what she was saying was that her husband wasn't reactionary. Instead of letting the challenges of each day control him, he maintained his vision by keeping problems in the broader perspective of his goals. In the language of the milk carton lesson, while others were jumping to conclusions on the basis of limited information, my friend didn't go along with the crowd. Through self - discipline, he developed the ability to see what nearly everyone around him missed: the potential to build an exemplary school —an achievement as sweet as blueberry preserves. Lesson Four: Pace Your Force March One of my former COs was a physical fitness machine. During our weekly physical training sessions (affectionately known as PT), he would often go beyond the distance. I think he, a man in his early forties, en- joyed seeing the younger twenty - something Marines panting to keep up. Occasionally, the CO liked to lead the entire squadron in a force march. In this instance, force refers to a military force, however, it was compulsory, so to the out -of -shape Marines, it was considered a forced march. I was in decent shape at the time, so I regarded force marches as a chance to get out of the office for a nice 12 to 25 mile walk. To appreciate the lesson of the force march, it is necessary to under- stand how it occurs. In essence, the entire unit is divided into two single - file columns. Each column walks down the opposite side of the road. When there are several hundred Ma- rines on a march, the columns can be quite long. The required distance between you and the Marine in front of you is about three feet. The ser- geants and staff sergeants will often march between the columns to prod the stragglers to catch up. On one particular force march, I was only two or three men behind the CO. This was the first time I had ever been near the front. I noticed that the overall march seemed sub- stantially easier than the previous marches where I had been in the middle or further back in the col- umn. I wanted to figure out why. In talking to my dad and several other Marines, I got my answer. They explained that the people in the front of the column don't have to work as hard when the CO quickens his pace because they are right be- hind him. But the farther back one is in the column, a sort of domino ef- fect occurs. A quickening of two or three steps at the front of the column can leave the poor guys in the back having to run to keep up. If the CO fails to maintain a steady pace, the guys at the rear of the column can spend the entire time alternating be- tween standing still and sprinting. Years later, while running a school, I regularly observed winded looks on some of my colleagues' faces. As I began asking folks what was going on, I realized that my work pace had been unsteady — alternating somewhere between fast and faster. It dawned on me that my team was having trouble keeping up with me because I hadn't established an even pace. The effective school leader appreci- ates that people working for him or her have different work styles. The best pace accommodates others whenever possible. Remember to keep it steady so people can keep up, especially for those near the bottom of the flowchart. © 2006 National Charter Schools Institute 6 Rev 02/07 Lesson Five: Prize Respect Over Rank I reported to a lieutenant once who was a good guy, but left much to be desired as a Marine officer. I still recall how on one occasion he directed me to report to the office on my afternoon off. As I hurried over, I thought to myself that something important must be go- ing down. Perhaps an urgent situa- tion in the classified message traf- fic or something. When I arrived, he handed me some handwritten notes and asked me to type a resume for him. His time in the Marine Corps would soon be up and he was actively searching for a new job. Technically, I could have declined his request on two grounds. First, it wasn't an order, and second, personal servitude in the Corps is a no -no. What irritated me the most was his general inconsiderateness. I had better things to do with my afternoon off than taking care of his personal matters. I did what he asked out of defer- ence to his rank. But what the lieu- tenant failed to understand is that such deference is a matter of formal- ity and that true respect has to be earned. One of the best leadership books I ever read on respect is en- titled, Credibility: How Leaders Gain and Lose It, Why People De- mand It, by James Kouzes and Barry Posner (1999). It's an excel- lent source for understanding the dynamics of how you build credi- bility— another word for real re- spect. For example, the authors say that you earn credibility by follow- ing the maxim DWYSYWD Do What You Say You Will Do. One of their key points is this: People may be required to defer to your "rank" as head of school, but you cannot demand credibility. It is given to you when others deem that you have earned it and it is removed when others deem you have lost it. Most critically, once you've lost it with a group of people, such as your faculty colleagues or your board, it can seldom be regained. Thus, it is imperative that you retain your credibility. With- out it, you have nothing left with which to lead people. Lesson Six: Lead Through Core Values Few professional achievements have ever given me as much satis- faction as the day I was meritori- ously promoted to sergeant. I achieved this in part by adding value to myself by enrolling in evening college courses and by mastering the requirements of my job as an intelligence analyst. And while at the time I recognized that the Marine Corps placed a high value on self - improvement and education, improving my abilities has always been one of my core values. The Corps rewarded me for it because of the value it gains from high - performing Marines. As the above illustrates, adding value to yourself is reciprocal. When you do so, you add value to your organization. Your school — or a future employer —will recog- nize that value and reward you for it because it adds value to them. As core values go, self - improvement combined with in- tegrity are a winning combo. ... adding value to yourself is reciprocal. When you do so, you add value to your organization. Your school —or a future em- ployer will recognize that value and reward you for it because it adds value to them. © 2006 National Charter Schools Institute 7 Rev 02/07 References & Suggested Reading Reading is an indispensable discipline for developing good leadership. I've listed a few books below that I consider among my all -time favorites. Bossidy, L., Charan, R., & Burck, C. (2002). Execution: The discipline of getting things done (1 st ed.). New York: Crown Business. Buckingham, M., & Coffman, C. (1999). First, break all the rules: What the world's greatest managers do differently. New York, NY.: Simon & Schuster. Charan, R. (2006). Know -how: The 8 skills that separate people who perform from those who don't (I st ed.). New York: Crown Business: Charan, R., Drotter, S. J., & Noel, J. L. (2001). The leadership pipeline: How to build the leadership powered company. San Francisco: Jossey -Bass. Collins, J. C. (2001). Good to great: Why some companies make the leap- -and others don't (1st ed.). New York, NY: HarperBusiness. Kouzes, J. M., & Posner, B. Z. (1993). Credibility: How leaders gain and lose it, why people demand it (1 st ed.). San Francisco: Jossey -Bass Publishers. Levitt, S. D., & Dubner, S. J. (2005). Freakonomics: A rogue economist explores the hidden side of everything (1st ed.). New York: William Morrow. Naisbitt, J. (2006). Mind set!: Reset your thinking and see the future (I st ed.). New York: Collins. From the CEO of the National Charter Schools Institute Affiliated with Central Michigan University in Mount Pleasant, Michigan since its in- ception in 1995, the National Charter Schools Institute is committed to advancing quality in the charter school sector through publications, conference presentations and tailored techni- cal assistance to charter schools. If you found this publication meaningful, I invite you to. visit our Web site at www.NationalCharterSchools.or where you will find similar monographs on a variety of Brian Carpenter topics including board governance, administrative leadership, evaluating research and more --all free of charge. As long as proper attribution is given, you're welcome to print and distribute as many copies of these as you like. If you would like to discuss the prospect of board governance training or other kinds of technical assistance, please e -mail me at bcatpenter Dnationalcharterschools.oLg, or call the Institute at (989) 774 -2999 (Monday through Friday, 8:00 am to 5:00 pm, EST). Finally, any feedback you might wish to suggest to improve this, or any of our publica- tions, would be valued. © 2006 National Charter Schools Institute 8 Rev 02/07 V� •. Town Attorney a ulazens oirwestme Mayor and Board of Aldermen V Town Texas &ecretary Student Town Housing Manager Executive Head Assistant to the Manager of School Town Manager Planning & Administrative Finance Manager Development & Building Inspector Service nd Fa cilities Parks and aintenance ;Recreation Municipal 01Finance Court Department U Finance Records & Assistant Revenue Clerk Public 'Works' Fire Chief Fire and Building EMS Staff Technician t Y Westfa e,4cad em Table of Contents Administrative Officials 01 .......................................................... ............................... Fund Descriptions ................ .02 ................ ............................... .... ............................ Account Coding Matrix ......................................................... ............................ . .. 03 General Fund General Fund Program Summary ....................................... ............................... 04 General Fund Proposed Budget by Function and Object Code ...................... 05 General Fund Budget Comparison.... ..................................... .............................06 General Fund Revenues and Expenditures Percentage Graphs .................... 08 Operating Expenditures including Municipal Support ........... .............................09 Revenue and Expenditure Comparison Fiscal Year 03/04 through 08/ 09 ............................................ .............................10 Special Revenue Fund Program Summaries Fund 244 IDEA -B Reimbursement Grant . ........................ ............................... 11 Fund 397 Advanced Placement /IB .................. .............................12 Fund 411 Technology Allotment ........................................ .............................13 Fund 429 FSP /High School Allotment .............................. ............................... 14 Westlake Academy * 2600 JT Ottinger Road * Westlake, Texas 76262 i 1 � k W es tCakeAcademy ADMINISTRATIVE OFFICIALS FISCAL YEAR 2008/2009 Laura Wheat President Tim Brittan, Larry Corson, Carol Langdon, Rebecca Rollins, Don Redding Board of Trustees Mark Rosevear Head of School Thomas Brymer Chief Executive Officer Page 1 '= i' Westfa e,4cademy �K ki FUND DESCRIPTIONS Governmental Fund Types are those through which most governmental functions of the Academy are financed. The acquisition, use and balances of the District's expendable financial resources, and the related liabilities are accounted for through the Governmental Fund Types. Following are the Academy's Governmental Fund Types: General Fund The General Fund is the fund that accounts for financial resources in use for general types operations. This is a budgeted fund, and any fund balances are considered resources available for current operations. Fund balances may be appropriated by the Board of Trustees to implement its responsibilities. Special Revenue Funds The Special Revenue Funds are the funds that account for local, state and federally financed programs or expenditures legally restricted for specified purposes or where unused balances are returned to the grantor at the close of a specified project period. Fund 224 IDEA -B Reimbursement Grant (Federally Funded) Fund is used, on a project basis, for funds granted to operate educational programs for children with disabilities. Fund 397 Advanced Placement/113 Awards (State Funded) Fund is used to account, on a project basis, for funds awarded under the Texas Advanced Placement Award Incentive Program, Chapter 28, Subchapter C, Texas Education Code. The purpose of this incentive program is to recognize and reward those students, teachers, and schools that demonstrate success in achieving the state's educational goals. Fund 411 Technology Allotment (State Funded) Fund is to be used to account, on a project basis, for funds awarded to purchase technological software or equipment that contributes to student learning, or to pay for training for educational personnel involved in the use of these materials. Fund 428 FSP -High School Allotment (State Funded) Fund is to be used for the allotment providing $275 per student in average daily attendance in grades 9 -12 by the state. Note: The audited financial statements of the Academy include all funds. However, the Texas Education Agency only requires the adoption of the General Fund, Food Service Special Revenue Fund and Debt Service Fund. In the Westlake Academy's case, only the General Fund is required to be adopted. Page 2 ACCOUNT CODING MATRIX 11 Instruction & Related 12 Instructional Resources & Media Sources (Library) 13 Curriculum Development & Inst. Staff Development 21 Instructional Leadership 23 School Leadership (Principal) 31 Guidance, Counseling & Evaluation Services 32 Social Work Services 33 Health Services 34 Student (Pupil) Transportation 35 Food Services 36 Cocurricular /extracurricular activities 41 General Administration (Superintendent/Board) 51 Plant Maintenance and Operations 52 Security and Monitoring Services 53 Data Processing Services 61 Community Services 71 Debt Service 61XX Payroll and Payroll Related 62XX Professional & Contracted Services 63XX Supplies and Materials 64XX Other Operating Costs 65XX Debt Service Page 3 WESTLAKE ACADEMY General Fund - 199 Program Summary Page 4 Actual FY 06/07 Adopted Budget FY 07/08 Estimated Budget FY 07/08 Proposed Budget FY 08/09 Beginning Fund Balance $ 427,720 $ 691,740 $ 691,740 $ 558,236 Revenues 2,879,531 2,951,311 3,240,449 3,623,228 Expenditures 2,615,511 3,271,416 3,373,952 3,495,741 Net Revenues over (under) Expenditures 264,020 (320,105) (133,503) 127,487 Ending Fund Balance $ 691,740 $ 371,635 $ 558,236 $ .: # Days Operating (Based on 365) 97 41 60 72 Days operating expense $ 7,166 $ 8,963 $ 9,244 $ 9,577 Page 4 Westlake Academy Proposed FY 2008 -2009 Budget General Fund REVENUES Local Revenues $ 512,335 $ 593,498 $ 539,652 $ Adopted Estimated 2,367,196 Proposed 2,700,797 3,083,016 Actual $ 2,879,531 Budget Budget 3,623,228 Budget FY 06 -07 FY 07/08 FY 07/08 $ 2,484,284 $ FY 08/09 REVENUES 62XX Contracted Services 350,544 412,559 483,789 507,778 63XX Supplies & Materials 175,956 Local Revenues $ 512,335 $ 593,498 $ 539,652 $ 540,212 State Program Revenues - 2,367,196 42,000 2,357,813 2,700,797 3,083,016 Total Revenues $ 2,879,531 $ 2,951,311 $ 3,240,449 $ 3,623,228 EXPENDITURES BY FUNCTION 11 Instructional $ 1,597,408 $ 1,956,274 $ 1,925,134 $ 1,904,004 12 Resources & Media 59,039 70,317 71,470 71,106 13 Staff Development 29,886 26,000 29,275 29,870 21 Instructional Leadership 9,190 10,968 12,776 6,548 23 School Leadership 216,472 132,396 146,079 211,426 31 Guidance & Counseling 41,988 111,926 117,272 150,804 33 Health Services 25,412 25,248 26,426 57,448 35 Food Services 84,484 95,918 33,489 22,821 36 CoCurricular Activities 53,463 58,305 50,125 84,990 41 Administrative 218,670 401,373 509,152 484,560 51 Maintenance & Operations 195,264 233,381 245,000 272,135 53 Data Processing 68,177 82,401 98,796 90,967 61 Community Services 15,958 66,909 66,958 67,063 71 Debt Service - - 42,000 42,000 Total Expenditures 2,615,411 3,271,416 3,373,952 3,495,741 Revenues Over (Under) Expenditures $ 264,120 $ (320,105) $ (133,503) $ 127,487 REVENUES Local Revenues $ 512,335 $ 593,498 $ 539,652 $ 540,212 State Program Revenues 2,367,196 2,357,813 2,700,797 3,083,016 Total Revenues $ 2,879,531 $ 2,951,311 $ 3,240,449 $ 3,623,228 EXPENDITURES BY OBJECT CODE 61XX Payroll and Related Items $ 1,981,908 $ 2,484,284 $ 2,584,884 $ 2,676,330 62XX Contracted Services 350,544 412,559 483,789 507,778 63XX Supplies & Materials 175,956 246,650 136,325 120,681 64XX Other Operating 107,103 127,923 126,954 148,953 65XX Debt Service - - 42,000 42,000 Total Expenditures 2,615,511 3,271,416 3,373,952 3,495,741 Revenues Over (Under) Expenditures $ 264,020 $ (320,105) $ (133,503) $ 127,487 Page 5 Westlake Academy Proposed FY 2008 -2009 Budget Budget Comparison - General Fund EXPENDITURES 200,794 117,676 132,959 196,826 Variance 11 Instructional 15,078 Adopted Estimated Proposed Proposed 6100 Payroll Actual Budget Budget Budget to 6200 Contracted Services FY 06 -07 FY 07/08 FY 07/08 FY 08/09 Estimated REVENUES 84,299 140,000 97,000 93,240 (3,760) Local Revenues $ 512,335 $ 593,498 $ 539,652 $ 540,212 $ 560 State Program Revenues 2,367,196 2,357,813 2,700,797 3,083,016 382,219 Total Revenues $ 2,879,531 $ 2,951,311 $ 3,240,449 $ 3,623,228 $ 382,779 EXPENDITURES 200,794 117,676 132,959 196,826 63,867 11 Instructional 15,078 9,720 12,920 13,600 680 6100 Payroll $ 1,485,079 $ 1,785,774 $ 1,792,809 $ 1,775,229 $ (17,580) 6200 Contracted Services 27,883 30,000 34,525 35,020 495 6300 Supplies & Materials 84,299 140,000 97,000 93,240 (3,760) 6400 Other Operating 147 500 800 515 (285) Total Instructional 1,597,408 1,956,274 1,925,134 1,904,004 (21,130) 12 Resources & Media 6100 Payroll 53,308 56,817 57,970 57,256 (714) 6200 Contracted Services 5,731 13,500 13,500 13,850 350 Total Resources & Media 59,039 70,317 71,470 71,106 (364) 13 Staff Development 6300 Supplies & Materials 550 - 275 - (275) 6400 Other Operating 29,336 26,000 29,000 29,870 870 Total Staff Development 29,886 26,000 29,275 29,870 595 21 Instructional Leadership 6100 Payroll 9,190 10,968 12,776 6,548 (6,228) Total Instructional Leadership 9,190 10,968 12,776 6,548 (6,228) 23 School Leadership 6100 Payroll 200,794 117,676 132,959 196,826 63,867 6200 Contracted Services 15,078 9,720 12,920 13,600 680 6300 Supplies & Materials 600 5,000 200 1,000 800 Total School Leadership 216,472 132,396 146,079 211,426 65,347 31 Guidance & Counseling 6100 Payroll 26,977 92,926 93,772 125,289 31,517 6200 Contracted Services 14,844 18,800 23,000 25,000 2,000 6300 Supplies & Materials 167 200 500 515 15 Total Guidance & Counseling 41,988 111,926 117,272 150,804 33,532 33 Health Services 6100 Payroll 24,176 24,598 25,171 56,133 30,962 6200 Contracted Services 755 - 755 800 45 6300 Supplies & Materials 581 650 500 515 15 Total Health Services 25,512 25,248 26,426 57,448 31,022 Page 6 Westlake Academy Proposed FY 2008 -2009 Budget Budget Comparison - General Fund (Continued) 35 Food Services 6100 Payroll 6300 Supplies & Materials 6400 Other Operating Total Food Services Adopted Estimated Actual Budget Budget FY 06 -07 FY 07/08 FY 07/08 Proposed Budget FY 08/09 Variance Proposed to Estimated $ 13,519 $ 14,918 $ 15,839 $ 17,252 $ 1,413 70,716 80,650 17,400 5,311 (12,089) 250 350 250 258 8 84,485 95,918 33,489 22,821 (10,668) 36 CoCurricular Activities 155,816 188,600 197,500 222,460 24,960 6100 Payroll 11,287 10,375 11,633 45,076 33,443 6200 Contracted Services 36,643 41,392 33,142 33,948 806 6300 Supplies & Materials 1,140 2,000 200 500 300 6400 Other Operating 4,393 4,538 5,150 5,466 316 Total CoCurricular Activities 53,463 58,305 50,125 84,990 34,865 41 Administrative 6100 Payroll 109,106 235,922 306,101 257,691 (48,410) 6200 Contracted Services 58,131 95,547 138,547 144,100 5,553 6300 Supplies & Materials 6,298 8,150 10,250 9,300 (950) 6400 Other Operating 45,135 61,754 54,254 73,469 19,215 Total Administrative 218,670 401,373 509,152 484,560 (24,592) 51 Maintenance & Operations 6200 Contracted Services 155,816 188,600 197,500 222,460 24,960 6300 Supplies & Materials 11,605 10,000 10,000 10,300 300 6400 Other Operating 27,842 34,781 37,500 39,375 1,875 Total Maintenance & Operations 195,263 233,381 245,000 272,135 27,135 53 Data Processing 6100 Payroll 6200 Contracted Services Total Data Processing 61 Community Services 6100 Payroll Total Community Services 71 Debt Service 6500 Debt Service Total Debt Service Total Expenditures Revenues Over (Under) Expenditures Beginning Fund Balance Ending Fund Balance 32,514 67,401 68,896 71,967 3,071 35,663 15,000 29,900 19,000 (10,900) 68,177 82,401 98,796 90,967 (7,829) 15,958 66,909 66,958 67,063 105 15,958 66,909 66,958 67,063 105 42,000 42,000 42,000 42,000 2,615,511 3,271,416 3,373,952 3,495,741 121,789 264,020 (320,105) (133,503) 127,487 $ 260,990 427,720 691,740 691,740 558,236 $ 691,740 $ 371,635 $ 558,236 $ 685,723 Page 7 Westlake Academy General Fund Revenues and Expenditures Fiscal Year 2008/2009 General Fund Proposed Revenues State Program Revenues 85% Local Revenues 15% General Fund Proposed Expenditures Other Operating Costs Supplies & 470 Debt Service Materials 1% 3% Contracted Services - 15% Page 8 Payroll & Related Items 77% Westlake Academy Operating Expenditures including Municipal Support Fiscal Year 2008/2009 Payroll and Related Total $5,394,095 49% Contracted Services 9% Supplies & Materials 2% Other Operating Costs 3% Municipal Payroll Related In -kind Debt Service Support % 4% Municipal Facilites & Maintenance Support Municipal Debt 4 %o Service Support 28% Total $5,394,095 Academy Budgeted Expenditures 64% 4' Municipal Support to Academy 36% Page 9 Westlake Academy Revenue and Expenditure Comparison Fiscal Year 03/04 through 08/09 $4,000,000 $3,500,000 $3,000,000 • 111 i� • $2,000,000 $1,500,000 rncn a Al-w111 111 M tV �j $500,000 .1 FY 03/04 FY 04/05 05/06 FY 06/07 07/08 FY 08/09 estimated actual actual actual actual projected ■ Revenues N Expenditures Page 10 WESTLAKE ACADEMY Special Revenue Fund IDEA-13 Reimbursement Grant - 224 Program Summary Page 11 Audited FY 06/07 Adopted Budget FY 07/08 Estimated Budget FY 07/08 Proposed Budget FY 08/09 -Beainn-ina Fund Balance State Revenue .. , Expenditures (Staff Development) Net Revenues over •- r) Expenditu Ending Fund Balance $ - $ $ _ $ Page 11 WESTLAKE ACADEMY Special Revenue Fund Advanced Placement /113 - 397 Program Summary Page 12 Audited FY 06/07 Adopted Budget FY 07/08 Estimated Budget FY 07/08 Proposed Budget FY 08/09 Beginning Fund Balance State Revenue Net Revenues over .- r) Expenditu Ending Fund Balance $ Page 12 WESTLAKE ACADEMY Special Revenue Fund Technology Allotment - 411 Program Summary Page ] 3 Audited FY 06/07 Adopted Budget FY 07/08 Estimated Budget FY 07/08 Proposed Budget FY 08/09 Beginning Fund Balance State Revenue Expenditures (Supplie Net Revenues over •- r) Expenditu Endin g Fund Balance $ _ - $ Page ] 3 WESTLAKE ACADEMY Special Revenue Fund FSP /High School Allotment - 428 Program Summary Page 14 Audited FY 06/07 Adopted Budget FY 07/08 Estimated Budget FY 07/08 Proposed Budget FY 08/09 Beainnina Fund Balance State Revenue Expenditures _(Supplies) Net Revenues over .- r) Expenditu Ending Fund Balance $ $ $ Page 14 Strategic Plan Key Result Areas Impacted:: Inviting Residential and Corporate Neighborhood Community Appearance Quality Development Aesthetic Standards We Are Leaders Premier Education Facilities and Programs Well Educated Future Leaders and Thinkers Business Partnerships with Town and Westlake Academy Hospitality Find A Home in Westlake Citizen Engagement Arts & Sciences Center Fund Program Summary Fiscal Year 2008/2009 ' FUND BALANCE, BEGINNING $ - $ (149,928) $ (149,928) $ 3,290,379 Adopted Estimated Proposed RECEIPTS: Actual Budget Budget Budget Contributions FY 06/07 FY 07108 FY 07108 FY 08/09 FUND BALANCE, BEGINNING $ - $ (149,928) $ (149,928) $ 3,290,379 11TOTAL RECEIPTS I - ( 3,000,000 I 4,155,406 I 204,373 RECEIPTS: Contributions - 500,000 1,425,406 189,373 Investment Earnings - - 30,000 15,000 Other Sources - 2,500,000 2,500,000 - Transfers In - - 200,000 - 11TOTAL RECEIPTS I - ( 3,000,000 I 4,155,406 I 204,373 Note 1: $647,708 has been designated in the fund balance of the General Fund to cover the Arts and Sciences Center private donations expected to be received over FY 08 -09 and 09 -10. The balance of $250,000 represents the remaining portion of the Lee donation which was restricted to the "Black Box ". 147 DEDUCTIONS: Capital Project 149,928 2,426,000 715,100 3,969,460 Note 1: $647,708 has been designated in the fund balance of the General Fund to cover the Arts and Sciences Center private donations expected to be received over FY 08 -09 and 09 -10. The balance of $250,000 represents the remaining portion of the Lee donation which was restricted to the "Black Box ". 147 CAPITAL IMPROVEMENT Fiscal Year 2008/2009 Project Description: Phase 1 $4,724,488 of the Westlake Performing Arts & Science Center will include Sciences labs, main lobby, offices and restrooms and conference room with foundation for black box, art room and half of the parking lot. As funds are available, additional improvements will include phase II $5,621,708 Art room, offices, open space, restroom with the shell for black box, art room and half of the parking lot and Phase III- $6,484,46 would include the a completed finish out. These improvements would be funded by the Westlake Academy Foundation contributions. Phase 1 8,730 square foot, Total 13,470 square foot. Total expenditure and funding anticipates a $647,708 interfund loan from the General Fund to cover private donations expected to be received over FY 08 -08 and 09 -10. CAPITAL PROJECT EXPENDITURES Thru 09/30/08 Thru 09/30/08 Budget FY08 /09 Planned Project Total 09/10 30 /31 11/12 43215 Engineering 60,945 20,000 2,867,378 80,945 43305 Legal (Bonds, Insurance) 13,875 20,000 - 500,000 33,875 44311 Utiity relocation 211,000 - (250,000) 211,000 45405 Advertising 1,500 - 300,000 1,500 45902 Electrical 550 - 45,000 550 46120 Postage /Shipping Expense 25 325,474 322,234 - 926,351 25 46125 Print /Copy Expense 331 - (322,234) 331 46195 Design 411,801 85,000 - 536,136 496,801 46195 Construction 55,000 3,844,460 200,000 3,899,460 49999 FF &E 1 - - 2,467,000 0 EXPENDITURE TOTAL 755,028 1 3,969,460 4,724,487 4,724,488 CAPITAL PROJE NDING Thru 09/30/08 Budget FY08 /09 Planned Project Total 09/10 10/11 11/12 Prior Year Remaining Funds 2,867,379 (0) 2,867,378 33700 Lee Contribution 500,000 - - 500,000 (Restricted to Black Box) (500,000) 250,000 (250,000) 33700 Texas Student Housing 07/08 300,000 - - 300,000 36110 Interest Earned 30,000 15,000 - 45,000 39503 Prospective Pledges Payments 89,270 189,373 325,474 322,234 926,351 Interfund Loan from GF 647,708 (325,474) (322,234) 39503 Westlake Academy Foundation 536,136 - - 536,136 52510 Texas Student Housing 06/07 200,000 200,000 75000 General Obligation Bonds(net) 1 2,467,000 1 - 2,467,000 IFUNDING TOTAL 3,622,406 3,969,460 (0) 4,724,487 INET 1 2,867,379 1 (0) (0) (0) Highlighted number represents a potential interfund loan to cover private donations expected to be received over FY 08/09 and FY 09/10. (See designated funds in General Fund). 148 CAPITAL IMPROVEMENT Fiscal Year 2008/2009 IMPACT ON OPERATING BUDGE Thru 09/30/08 Budget FY08 /09 09/10 10/11 11/12 Project Total Supplies (Paper, Etc) (Academy) 4,000 4,000 4,000 12,000 Maintenance (HVAC) (Municipal) 3,000 3,000 3,000 9,000 Maintenance (Electrical) (Municipal) - 2,800 2,800 2,800 8,400 Maintenance (Security) (Municipal) 3,000 3,000 3,000 9,000 Services (Landscaping) (Municipal) 4,000 4,000 4,000 12,000 Services (Cleaning) (Academy) 3,500 3,500 3,500 10,500 Equipment (Lighting, AV) (Municipal) 4,000 4,000 4,000 12,000 Gas -13270 x.25 psf (Academy) - 3,318 3,318 3,318 9,953 Electric -13270 x 1.67 psf (Academy) 22,161 22,161 22,161 66,483 Phone - 13270 x .333 psf (Academy) - 4,419 4,419 4,419 13,257 T1 Line -13270 x .04 psf (Academy) 531 531 531 1,592 Water - 13270 x .302 psf (Academy) I - 4,008 1 4,008 1 4,008 12,023 OPERATING IMPACT TOTAL I 0 0 58,736 1 58,736 1 58,736 176,207 148 Strategic Plan Key Result Areas Impacted: Inviting Residential and Corporate Neighborhood Neighborhood Integrity i Community Appearance Aesthetic Standards We Are Leaders Premier Education Facilities and Programs Environment Stewardship Hospitality Finds A Home in Westlake Citizen Communication Project Description Fund # Funded By Amount Water Well for Civic Campus 410 General Fund $ 45,000 Dove Road Bridge Expansion 410 General Fund 60,000 Total General Fund 105,000 Deloitte Trail 410 Contributions 25,000 Glenwyck Trail Extension 410 Contributions 15,000 Total Contributions 40,000 Stagecoach Hills Paving 410 Property Tax Fund 2501000 FM 1938 Streetscape 410 Visitors Association 250,000 ITotal Capital Projects Fund - 410 1 $ 645,000 Arts and Sciences Center 411 Contributions /Bonds 3,969,460 ITotal Arts & Sciences Center Fund - 411 1 $ 3,969,460 TRA Assumption of N1 Sewer Line 500 Utility Fund 146,501 Water Meter Automation 500 Utility Fund 27,000 ITotal Utility Fund - 500 1 $ 173,501 Grand Total All Projects (All Funds) 1 $ 4,787,961 135 Beginning Fund Balance $ - $ 2,867,379 $ - $ - $ - $ Funding Sources Interfund Loan from GF /A &S FY 07/08 FY 08/09 FY 09/10 FY 10 /11 FY 11/12 FY 12/13 25,000 Estimated Proposed Projected Projected Projected Projected Beginning Fund Balance $ - $ 2,867,379 $ - $ - $ - $ Funding Sources Interfund Loan from GF /A &S 30,000 647,708 (325,474) (322,234) - Developer contributions - 25,000 425,000 - - Foundation pledge /contributions 89,270 189,373 325,474 322,234 Private contributions 1,536,136 30,000 - - - Lee donation (rest. to Black Box) (500,000) 250,000 425,000 - - - G.O. Bond proceeds 2,467,000 - - - Escrowed Funds 60,000 15,000 - - General Fund Transfers - 75,000 - - Vistors Fund Transfers 30,000 250,000 - - - Utility Fund Transfers - 173,501 1,360,000 360,000 - Cemetery Fund Transfers - 146,501 - - - PTR Fund Transfers - 250,000 60,000 - Interest 30,000 15,000 - - - Subtotal 3,712,406 1,920,582 1,785,000 360,000 Total Utility - 173,501 1,360,000 360,000 - - Total Funds Available $ 3,712,406 $ 4,787,961 $ 1,785,000 $ 360,000 $ - $ Capital Improvement Projects Public Streets. Trails. Parks and Buildines FM 1938 Streetscape 30,000 250,000 - - Arts and Sciences Building 755,029 3,969,460 - - Stagecoach Hills Reconstruction - 250,000 - - Dove Road Bridge Expansion 60,000 - - - - Trails on Dove Road (Deloitte) - 25,000 425,000 - - - Glenwyck Trail Ext to Terra Bella 60,000 15,000 - - Water Well for Academy 45,000 - Cemetery Improvements - - - Total Public Streets and Building! 845,028 4,614,460 425,000 - - - Water & Sewer TRA Assumption of N1 Sewerline - 146,501 - - - - 0 Water Meter Automation - 27,000 60,000 60,000 Stagecoach Hills waterline - - 300,000 300,000 - Ground storage tank - - 1,000,000 - - Total Utility - 173,501 1,360,000 360,000 - - Total CIP Expenditure /Expenses 845,028 4,787,961 1,785,000 360,000 - Ending Fund Balance $ 2,867,379 $ - $ - $ - $ - $ - NOTE 1: FY 08 -09 "Total Funds Available" includes $647,708 designated funds. These funds have been designated in the General Fund's fund balance to cover the Arts and Sciences Center private donations expected to be received over FY 08 -09 and 09 -10. NOTE 2: $1M ground storage tank will be funded through Utility revenue bonds. (Approximately $75K /annual for 20 years - 4.34 %) 136 Funding Sources Developer contributions $ $ $ $ 105,000 $ 472,500 $ 472,500 Private /WAF contributions - - - G.O.Bond proceeds - Escrowed Funds - General Fund Transfers - Vistors Fund Transfers Utility Fund Transfers Cemetery Fund Transfers PTR Fund Transfers - - - Total Funding Sources $ $ $ $ 105,000 $ 472,500 $ 472,500 Capital Improvement Projects Public Buildings Fire Station $ $ $ $ $ 280,000 $ 3,720,000 Town Hall /Municipal Court /Library - 700,000 9,300,000 Academy Expansion - 560,000 7,440,000 Subtotal Public Buildings - 11540,000 20,460,000 Parks & Open Space Trail Enhancements 140,000 1,860,000 Park Acquisition and /or Improvements - 140,000 1,860,000 ISubtotal Parks & Open Space 280,000 3,720,000 - Cemetery Various Improvements 35,000 35,000 500,000 500,000 Subtotal Cemetery 35,000 35,000 500,000 500,000 Transportation FM 1938 Streetscape /Way Finder 500,000 500,000 500,000 Dove Road Improvements 210,000 1,170,000 1,170,000 Subtotal Transportation 710,000 1,670,000 1,670,000 TOTAL General Obligation Improvements $ - $ 35,000 $ 35,000 $ 1,490,000 $ 7,430,000 $ 22,130,000 TOTAL UNFUNDED NEEDS $ $ 35,000 $ 35,000 $ 1,385,000 $ 6,957,500 $ 21,657,500 137a FY 07/08 FY 08/09 FY 09/10 FY 10/11 FY 11/12 FY 12/13 Estimate Proposed Projected Projected Projected Projected Funding Sources Developer contributions $ $ $ $ 105,000 $ 472,500 $ 472,500 Private /WAF contributions - - - G.O.Bond proceeds - Escrowed Funds - General Fund Transfers - Vistors Fund Transfers Utility Fund Transfers Cemetery Fund Transfers PTR Fund Transfers - - - Total Funding Sources $ $ $ $ 105,000 $ 472,500 $ 472,500 Capital Improvement Projects Public Buildings Fire Station $ $ $ $ $ 280,000 $ 3,720,000 Town Hall /Municipal Court /Library - 700,000 9,300,000 Academy Expansion - 560,000 7,440,000 Subtotal Public Buildings - 11540,000 20,460,000 Parks & Open Space Trail Enhancements 140,000 1,860,000 Park Acquisition and /or Improvements - 140,000 1,860,000 ISubtotal Parks & Open Space 280,000 3,720,000 - Cemetery Various Improvements 35,000 35,000 500,000 500,000 Subtotal Cemetery 35,000 35,000 500,000 500,000 Transportation FM 1938 Streetscape /Way Finder 500,000 500,000 500,000 Dove Road Improvements 210,000 1,170,000 1,170,000 Subtotal Transportation 710,000 1,670,000 1,670,000 TOTAL General Obligation Improvements $ - $ 35,000 $ 35,000 $ 1,490,000 $ 7,430,000 $ 22,130,000 TOTAL UNFUNDED NEEDS $ $ 35,000 $ 35,000 $ 1,385,000 $ 6,957,500 $ 21,657,500 137a Town Hall /Municipal Court /Library $ 10.00 million Major Trail Enhancements 2.00 million Fire Station 4.00 million Park Improvements 2.00 million Additional Academy Building Expansion 8.00 million Road and Bridge Improvements Dove Road (50% paid by Developer) 1.50 million Major Cemetery Improvements 1.07 million FM 1938 Streetscape /Way Finder 1.50 million $ 30.07 million 137b �d' NF,JTL J ` The Town of Westlakv 5 -YEAR PROJECTION ASSUMPTIONS REVENUES 1. Sales tax increases by 3% annually. 2. Sales tax related to Economic Development Agreements for Fidelity and Deloitte has been included for FY 08 -09 and Deloitte FY 09 -10. The Town receives sales tax related to these two projects qnly through the end of the project's construction. Per the agreements, we keep the '/2 cent sales tax received in each of the Property Tax Reduction and 4B Economic Development Funds. The remaining one cent received in the General Fund is paid out to the developer per the agreements. Therefore, the net effect to the General Fund is zero. 3. Ongoing sales tax for Deloitte and Fidelity Phase II has not been projected because of the uncertainty of the business structure. 4. Deloitte fees of $506K are included in 08 -09. No major building permit fees projected from FY 09- 10 forward. 5. No new revenue sources • No permit fee increases • No growth in sales tax base • No property tax EXPENDITURES 1. No new positions except in FY 08 -09. Two and one -half positions proposed in FY 08 -09. 2. Salaries and benefits increase 3% annually. 3. Other expenses increase 3% annually. 4. Remove all major one -time expenditures. $506K (offset by Deloitte fees) in FY 08 -09 goes away. 5. No other major one -time expenses including capital outlay. 6. No inter -fund transfers out after FY 08 -09. 7. One cent sales tax rebate payments regarding Fidelity and Deloitte are included in FY 08 -09 and Deloitte payment for FY 09 -10. None proposed for future years. 8. Only includes currently funded capital projects. 9. No increase in debt service payments included. (i.e. no additional debt issuance for new capital proj ects) Fund Descr"on FY 07-08 FY 08-08 FY 09-110 FY 10 -11 FY 11 -12 FY 12 -13 General Fund Beginning Fund Balance $ 3,076,299 $ 2,786,425 $ 2,162,945 $ 2,547,145 $ 2,326,896 $ 1,109,769 Sales Tax (taking Fidelity & Deloitte funds into consideration) 1,677,460 1,664,352 1,351,758 1,392,311 1,434,080 1,477,102 Revenues (Inc $506,000K Deloitte fees FY 08/09) 2,650,544 3,059,785 2,943,020 2,510,131 2,064,255 1,605,002 Transfers In (FW Impact Fees) 25,000 30,000 36,050 37,132 38,245 39,393 Interfund Loan Pymt from A &S Bldg 327,039 297,308 325,474 322,234 - 178,384 Transfer in (UF % of master plan) received 17,500 Transfers in (Property Tax Reduction Fund) 706,650 335,052 263,312 134,023 177,876 Expenditures (net of 1 time exp for 08/09 & ED Incentives) (2,676,380) (2,992,310) (2,531,962) (2,607,921) (2,686,159) (2,766,744) Payroll and Related Expenditures (1,675,821) (2,014,749) (2,075,191) (2,137,447) (2,201,571) (2,267,618) Transfer Out (SRF) (7,500) Transfer out (Building Fund & Trail Escrow) (200,000) Interfund Loan to A &S Bldg Fund (647,708) Transfers Out (General Major Maintenance Fund) (15,660) (237,500) Transfer out (Vehicle & Equipment Replacement Fund) (134,500) Transfers Out (Capital Projects) (67,517) (75,000) - - Net Total 2,786,425 2,162,945 2,547,145 2,326,896 1,109,769 (625,219) Restricted Funds (Court and Trail restrictions) 315,274 905,614 905,614 905,614 905,614 905,614 Designated Funds (A &S Building Pledges Receivable) - - Restricted Funds (Building Fund from TSH) - - - - - Ending Balance (projected) 2,471,151 1,257,331 1,641,531 1,421,281 204,155 (1,530,834) Operating Days 207 92 130 109 15 (111) Visitors Association Fund Beginning Fund Balance 1,183,022 1,318,957 482,200 352,819 218,047. 77,602 Revenues 487,525 499,000 513,970 529,389 545,271 561,629 Payroll and Related Expenditures (92,100) (121,860) (130,512) (139,648) (149,423) (158,239) Expenditures (219,490) (323,847) (333,562) (343,569) (353,876) (364,493) Transfers out - debt service (640,050) (179,276) (180,944) (182,416) (183,692) Transfers out - CP Capital Projects & General MM (40,000) (250,000) - - Vet Total (projected) 1,318,957 482,200 352,819 218,047 77,602 (67,193) Designated (Historical /Public Arts) 25,000 5,000 - - - Ending Balance (projected) 1,293,957 477,200 352,819 218,047 77,602 (67,193) Operating Days 1,545 395 277 165 56 (47) Cemetary Fund Beginning Fund Balance - 66,506 27,758 5,107 (18,225) (42,256) Revenues 71,763 21,550 22,197 22,862 23,548 24,255 Transfers In 10,000 Expenditures (15,257) (60,298) (44,848) (46,193) (47,579) (49,007) Transfers Out (Debt Service) - - Ending Balance (projected) 66,506 27,758 5,107 (18,225) (42,256) (67,007) FM 1938 Fund Beginning Fund Balance 251,826 251,826 251,826 251,826 251,826 251,826 Revenues 210,145 - - - - - Transfers In - Expenditures (210,145) Transfers Out (Debt Service) - - - Ending Balance (projected) 251,826 251,826 251,826 251,826 251,826 251,826 4B Beginning Fund Balance Beginning Fund Balance 385,938 327,039 297,308 267,577 237,846 208,115 Revenues 839,275 832,176 670,104 690,207 710,913 732,240 Expenditures - - - - - - Transfers Out (Debt Service) (898,174) (861,907) (699,835) (719,938) (740,644) (761,971) Ending Balance (projected) 327,039 297,308 267,577 237,846 208,115 178,384 ** Fund balance represents balance due from OF for various capital projects (balance sheet accounts due to /from- receive $29,731 through 2019) All funds received Property Tax Reduction Fund Balance Beginning Fund Balance Revenues (no int income after FY 08 -09) Transfer out to Debt Service Fund Transfer out to General MM 25% annually Transfer out to Utility MM 'ransfer out to Capital Projects (ransfer out to General Fund Ending Balance (projected) 9/8/2008 11:45 AM 154,474 578,064 461,090 175,502 - - 841,730 839,676 670,104 690,207 710,913 732,240 (418,140) - (620,639) (602,396) (576,890) (554,365) (250,000) (706,650) (335,052) (263,312) (134,023) (177,876) 578,064 461,090 175,502 Punt Dmedplon FY 07 -08 FY 08-09 FY 0940 FY 10 -11 FY 11 -12 FY 12 -13 Debt Service Fund Beginning Balance Transfer in (GF) - - - - - Transfers In (413) 898,174 861,907 699,835 719,938 740,644 761,971 Transfers In (Property Tax Reduction Fund) 418,140 - 620,639 602,396 576,890 554,365 Transfer in (Visitors Assoc Fund) - 640,050 179,276 180,944 182,416 183,692 Expenditures - debt service (1,316,314) (1,501,957) (1,499,750) (1,503,278) (1,499,950) (1,500,028) Ending Balance (projected) - - Utility Fund Beginning Fund Balance 1,138,002 1,418,404 1,635,228 1,619,163 1,638,828 2,035,331 Revenues 434,450 500,050 515,052 530,503 546,418 562,811 Impact Fees 35,000 35,000 36,050 37,132 38,245 39,393 Water Revenue 1,521,370 1,673,507 1,723,712 1,775,424 1,828,686 1,883,547 Water Revenue (Hillwood /Town Sry Area) 43,120 97,275 100,193 103,199 106,295 109,484 Payroll and Related Expenditures (228,695) (213,622) (222,167) (231,054) (240,296) (249,908) Expenditures (466,199) (459,370) (473,151) (487,346) (501,966) (517,025) Water Purchases (804,606) (911,025) (938,356) (966,506) (995,502) (1,025,367) Interfund Payable (50,851) (50,851) (50,851) (29,731) (29,731) (29,731) Transfers Out (PCMF) (5% of Exp) Transfers Out (PCMF - excess not covered) (15,000) (15,000) (15,000) (15,000) (15,000) (15,000) Transfers Out (GF operations - % of master plan) (17,500) Transfers Out (Impact Fees to GF) (25,000) (30,000) (36,050) (37,132) (38,245) (39,393) Debt Service (Hillwood Infrastructure Pymt) (43,120) (97,275) (100,193) (103,199) (106,295) (109,484) Debt Service (Keller Overhead Storage) (120,067) (120,864) (120,304) (121,625) (121,107) (121,911) Debt Service (Ground Storage Tank) $1M /20Years (75,000) (75,000) (75,000) (75,000) Capital Projects - (173,501) (360,000) (360,000) Net Fund Balance 1,418,404 1,635,228 1,619,163 1,638,828 2,035,331 2,447,748 Restricted Funds 111,360 111,360 111,360 111,360 111,360 111,360 Ending Fund Balance (projected) 1,307,044 1,523,868 1,507,803 1,527,468 1,923,971 2,336,388 Operating Days 278 351 337 331 404 476 Vehicle & Equipment Replacement Fund Beginning Fund Balance - - 100,385 100,385 100,385 100,385 Revenue Transfers in from GF 134,500 - - - - Transers in from GF to make up deficit - Expenditures (34,115) - - (365,000) Ending Balance (projected) - 100,385 100,385 100,385 100,385 (264,615) Major Maintenance Fund Beginning Fund Balance 20,000 35,000 134,000 (81,200) (396,100) (1,216,100) Revenue - Transfers in from GF 15,660 - - Transfer in from PTR Fund 237,500 Transers in from GF to make up deficit - - Expenditures (660) (138,500) (215,200) (314,900) (820,000) (727,400) Ending Balance (projected) 35,000 134,000 (81,200) (396,100) (1,216,100) (1,943,500) Utility Major Maintenance Fund Beginning Fund Balance 20,000 35,000 50,000 65,000 80,000 125,000 Transfers in from Utility Fund 15,000 15,000 15,000 15,000 15,000 15,000 Transfer in from PTR Fund (25% annually) - - - - - Transfers in from OF to make up deficit - - Expenditures - - - 30,000 150,000 Ending Fund Balance (projected) 35,000 50,000 65,000 80,000 125,000 290,000 Total Projected Ending Fund Balance $ 6,365,587 $ 4,580,765 $ 4,286,350 $ 3,422,529 $ 1,632,699 $ (816,551) 9/8/2008 11:45 AM ONATI NAL CHARTER SCHOOLS INSTITUTE ## LET'S DO THE NUMBERS: national cha rterschools.org 1 (989) 734 -2999 SEVEN PRACTICES FOR SOUND FISCAL MANAGEMENT OF CHARTER SCHOOLS by Brian L. Carpenter Executive Director National Charter Schools Institute Overview A colleague and friend who is a charter school authorizer, Jim Goenner, executive director of the Charter Schools Office at Central Michigan Univer- sity, says, "There are two main considerations for authorizers at the end of the day: `Are students learning, and has the money been taken care of? "' (NACSA, 2003, p. 63). Both considerations are critical to the success of your school and to the success of charter schools as desirable public policy. Yet the business aspect of education is one that some school leaders and board members shy away from. This must be remedied since charter school boards owe it to the public on whose behalf they govern, to exercise good internal controls coupled with proper financial reporting and other oversight practices. This paper is intended to help boards un- derstand how to establish the basics for ensuring "the money is being taken care of." A high - profile example of the money not being taken care of occurred in the 2004 failure of Califor- nia Charter Academy. As "a for - profit education management company then undergoing several in- vestigations into its finances and operations, [it] closed more than 60 California campuses serving almost 10,000 students" (Lake & Hill, 2005, p. 43). Fortunately, as Robin J. Lake and Paul T. Hill note in their excellent report, Hopes, Fears, & Real- ity. A Balanced Look at American Charter Schools in 2005, "In part, because of the efforts of the Cali- fornia Charter Schools Association, every student displaced by the CCA's failure found a new school © 2006 National Charter Schools Institute without instructional disruption" (p. 43). Nevertheless, coverage in the New York Times (2005) and other news media, did not help the char- ter school cause. Lake and Hill stated "The event crystallized concerns about charter school oversight and accountability ... " (p. 43). And while "The story is about an unscrupulous business enriching itself at public expense ... " (p. 43), one may be for- given for wondering what the boards of CCA's schools were doing. Did they require and receive regular financial reporting? Did the boards have good internal controls? Did they have their own auditor? How many red flags were missed? If such questions sound overly vigilant, I can at- test from firsthand experience what happens when a board doesn't ask them. As a board member of a not - for - profit agency several years ago, it was dis- tressing to discover that the executive director had imperiled the existence of the organization by em- bezzling money. As a current charter school board member, I use what I learned from that experience about sound fiscal management to govern effec- tively. I've written this brief to help others as well. Thankfully, the majority of charter school lead- ers and education service providers are honest. But good internal controls and accountability are neces- sary to validate their honesty. This paper discusses several ways to implement and monitor such con- trols, as well as other sound fiscal management pro- cedures. The references at the conclusion of the pa- per contain additional recommended reading. *NATIONAL CHARTER SCHOOLS INSTITUTE i 00 "The first and foremost element of sound fiscal management that every board should understand is that it is ultimately responsible for the school's finances." © 2006 National Charter Schools Institute Introduction The benefits of sound fiscal management of charter schools are numerous. Among them: The board is able to assure its constituencies that it is prop- erly fulfilling its role. The school has little difficulty in passing audits which is in- valuable when it comes to grant- seeking and borrowing. The public's money is being used only for that which it was intended. Best of all, student achievement is unhindered by school exigencies and the charter movement as a credible reform effort isn't tar- nished by negligence or bad actors. The first and foremost element of sound fiscal management that every board should understand is that it is ultimately responsible for the school's finances. Even in schools where the board has con- tracted the management of the school, the board is still ultimately responsible for the school's fi- nances (see more on this on p. 7). This is a serious responsibility, indeed the very viability of the school hangs in the balance. Yet most board members are not ac- countants, financial managers or investment bankers. If financial reports are presented, many boards have trouble understanding them. So how is a board supposed to hold the school's leadership ac- countable for proper fiscal man- agement? The answer is in the fol- lowing seven practices which will be discussed in this paper: 1. Establishing internal controls (through policy) 2. Monitoring compliance with national cha rterschool s.org 1 (989) 774 -2999 fiscal policies 3. Developing financial reporting interpretation skills 4. Developing accurate budgets 5. Recognizing red flags b. Minimizing risk 7. Hiring its own independent auditor By adhering to these seven practices, a charter school can make large strides toward sound fiscal management. In contrast, ignoring even one or two practices puts the school at unnecessary risk. The good news: These prac- tices don't necessitate every board member becoming an auditor or accounting wiz -bang. They are simply proven business practices that help the board do its job of ensuring financial accountability. One final note here. It is possi- ble that in its zeal to ensure proper fiscal accountability, a board can overlook its other primary respon- sibility which is to ensure that its students are learning. If a board is spending 50 percent of every meet- ing reviewing financial statements, it isn't devoting sufficient time to its mission. Besides ensuring proper fiscal accountability, the seven practices discussed in this paper should actually minimize the amount of time the board spends discussing finances. The board's responsibility to require reasonable assurances that the school's finances are being properly handled should not di- minish its focus on why the school is in business. At the end of the day, sound fiscal management is only a means of getting to an end. It should never be confused with the end purpose of charter schools--Ao produce student achievement. •NATIONAL CHARTER SCHOOLS INSTITUTE a! so Practice #I Establishing Internal Controls (Through Policy) An effective board governs through policy (Carver, 1997). It does this by establishing sensible policies and then by monitoring compliance with those policies on a regular basis. A key governing responsibility is to prevent fraud by establishing internal fiscal controls. In the pol- icy context, - controls are nothing more than limitations. Thus, through policy, the board limits what the management of the school is free to do with the school's money and assets. To be sure, there is no fool- proof method of protecting an or- ganization from fraud. But that doesn't mean that the board can't stipulate internal controls to re- duce those risks. Let's discuss a few examples. An easy step to take in any charter school is what auditors call "segregation of duties." This means establishing policies that prevent only one or two people, such as the bookkeeper or business manager, from having total or near total control of the finances. A business office with properly segregated duties for example, will not permit the same person who makes the journal entries to recon- cile the bank statement. Why? Be- cause the bank statement will re- veal the actual activity of the school's account. If a different person reconciles the account, this places another set of eyes on the school's finances and it inhibits any one individual from falsifying the books to match the bank state- ment. Further, the person who main- tains the school's books should not have the authority to enter new vendors or employees into the software. (Good accounting soft- ware allows a system administra- tor to determine who may perform certain functions like creating a new vendor.) By separating the functions of keeping the books from creating new payees, a per- son is prevented from manufactur- ing faulty invoices or entering bo- gus employees in order to cut checks that they themselves will later cash. Another easy way to avoid false invoices is to have every person who orders a service or product, sign and date the in- voice as having received it before processing for payment. Sometimes in small schools, it can be difficult to segregate some of these duties because the busi- ness office consists of just one per- son. Still, it is a good practice to spread some of these duties around. At a minimum, if it is nec- essary to have the bookkeeper rec- oncile the monthly bank statement, a copy of the bank statement can also be sent to a board member's home or work address directly from the bank itself. This is by no means an exhaus- tive list of segregating duties. The board can and should talk to its accountant or auditor for further recommendations. The key point here is for boards to recognize that they need policies establishing such controls. Without them, an ill- intentioned individual has a completely free hand to defraud the organization with little risk of being caught until it's too late. © 2006 National Charter Schools Institute 3 national cha rterschool s.org 1 (989) 774 -2999 "To be sure, there is no foolproof method of protecting an organization from fraud. But that doesn't mean that the board can't stipulate internal controls to reduce those risks." *i00 *NATIONAL CHARTER SCHOOLS INSTITUTE 0 "I think it was Ronald Reagan who said, `Trust but verify.' That's pretty good advice when it comes to monitoring compliance with fiscal policies in charter schools." Practice #2 Monitoring Compliance with Fiscal Policies Some board members assume that establishing good policy is all that is necessary to ensure sound fiscal management. This is a mis- take of potentially huge propor- tions. The board must rigorously monitor the organization to ensure that its policies are being followed. This oversight function is one of the primary purposes of the board. As the world's leading authori- ties on Policy Governance,° John and Miriam Carver note in one of their several outstanding books, Reinventing Your Board: The board will acquire monitoring data by one or more of three methods: (a) by internal report, in which the CEO discloses compliance informa- tion to the board, (b) by external re- port, in which an external disinter- ested third party selected by the board assesses compliance with board poli- cies, and (c) by direct inspection, in which a designated member or mem- bers of the board assess compliance with the appropriate policy crite- ria" (1997, p. 124). Each of these is briefly elaborated upon below. CEO disclosure can be utilized by the board for compliance in several ways. He or she could, for example, certify in writing that the accounting duties have been segre- gated. Regular financial statements should be another part of the dis- closure required by the board. External reports include things like having an auditor or other ex- pert examine school documents and practices for compliance. Direct inspection by a board member can work if the board © 2006 National Charter Schools Institute 4 national charterschools,org 1 (9 89) 774 -2999 member tasked with the responsi- bility of reporting his or her find- ings to the board is knowledgeable and reliable. (A key point about direct inspection: Tightly limit the authority of the board member do- ing the inspecting so that he or she isn't in a position to give direc- tions to the CEO. Only the board as a whole should do that.) How much monitoring should a board do? Enough to be reasona- bly certain that its fiscal policies are being followed. A final word of caution is in order. In some schools, where the CEO is the founder for example, the board may be reluctant to ask too many questions about finances. Founder or not, a competent and honest CEO will expect the board to provide appropriate oversight because he or she knows that such oversight keeps him or her, the school, and the board above re- proach. I think it was Ronald Reagan who said, "Trust but verify." That's pretty good advice when it comes to monitoring compliance with fiscal policies in charter schools. Practice #3 Developing Financial Reporting Interpretation Skills Eav 8sv g7rop6itis va Kaia?,6(3siE ils OtKOVOgiK�; EKe (76tq, g7COpovv Enj(771S va ypayTO16V 6ia 6XX1 VtKa. (If you can't understand financial reports, they may as well be written in Greek.) Every board member should develop the ability to understand four financial reports: • *00 *NATIONAL CHARTER SCHOOLS INSTITUTE i •o 1. Balance sheet 2. Income and expense statement 3. Budget vs. actual expenses 4. Cash flow projection Unfortunately limited space in this paper precludes an extended discussion of how to interpret these reports. Instead, let me make the following points. First, the board should require these reports to be submitted on a regular basis. Failure to receive these four reports on at least a quarterly basis is dangerous. Second, the board should de- velop the skills needed to interpret financials. It is legitimate for the board to authorize reasonable ex- penditures for training or materials to help it acquire these skills. Third, just because financial statements are presented, it doesn't mean the board is obligated to adopt them. The board should never adopt any financial state- ment until it is 100 percent com- fortable with its accuracy and its meaning. Finally, resist the temptation to defer to any one board member the responsibility for monitoring and understanding financial state- ments. The entire board should develop at least basic financial in- terpretation skills. Practice #4 Developing Accurate Budgets A budget is a plan to spend. A board - adopted budget is required of charter schools by most if not all state laws. Even if it weren't, a budget is essential to sound man- agement because a budget is more than a way to track revenue and expense: It should reflect the school's mission priorities. If the school, for example, has technological education as part of its mission, the budget should re- flect significant expenditures on technology. If the school is college preparatory, one might question a budget that contains expenses for lawnmower repair classes. Furthermore, effective annual budgeting is part of a larger fore- casting process. A good budget should be part of a bigger picture. Three years is a good look -ahead window for school budgeting. Once the budget is in place, spending should follow the plan. The board should require an ap- proval process when there are vari- ances to the budget. The guidelines in the preceding three paragraphs on developing accurate budgets can be summa- rized as follows: 1. The mission of the school should drive the budget. 2. The annual budget should be part of a multi -year plan. 3. Budget variances will occur but they should be approved by the board. Finally, when it comes to de- veloping accurate budgets, it's helpful to remember that a budget is more like a guided missile than a bomb. A bomb lands wherever it was dropped. A guided missile makes many on -board calculations and adjustments while in flight in order to hit its intended target. In the same way, your budget will require adjustments, espe- cially in the early years of the school as you accumulate spend- ing and revenue data. © 2006 National Charter Schools Institute 5 national cha rterschools.org 1 (989) 774 -2999 "a budget is more than a way to track revenue and expense: It should reflect the school's mission priorities." "it's helpful to remember that a budget is more like a guided missile than a bomb. A bomb lands wherever it was dropped. A guided missile makes many on -board calculations and adjustments while in flight in order to hit its intended target." #NATIONAL CHARTER SCHOOLS INSTITUTE Le ## Practice #5 Recognizing Red Flags The following list of things are potential indicators that everything may not be well with your school's finances. While they don't necessarily indicate fraud or incompetence, they should serve as red flags for the board to probe the issue further: 1. A CEO who appears offended or expresses dismay (e.g., "Don't you trust me ? ") when board members ask questions about the school's finances. 2. Irregularity in receiving re- quired financial reports. Ex- cuses like, "We're getting new computers or new software" may be valid once in a blue moon but not every meeting. 3. Non - existence or violation of segregation of duties policies. 4. A sole bookkeeper who works for years without a vacation or who is resistant to opening up the books to others. 5. A CEO who cannot give crys- tal clear explanations to board questions about every aspect of the school's finances. 6. An auditor who is not com- pletely independent of the management (for example, an auditor who audits multiple schools for the same manage- ment company). 7. Financial contributors to the school who are anonymous to the board. Otherwise, how would the board know the amount actually contributed? 8. Peculiar practices like the CEO requiring all mail, including bank statements, to be placed on his or her desk unopened. © 2006 National Charter Schools Institute 6 national cha rterschool s.org 1 (989) 774 -2999 If these red flags sound theo- retical— they're not. Almost every one of them occurred in the em- bezzlement scenario which I de- scribed on page one. Ask your auditor about red flags. On the basis of their experi- ence, auditors can usually give many more examples. Practice #6 Minimizing Risk There are many things a board can do to minimize risk to itself and the school. 1. If school credit cards are is- sued to employees, never issue any without limits placed on the card at the bank's end. 2. Never sign any authorization to establish a bank account for the school without copying the front and back of the signature card and placing it in the offi- cial minutes of the school. 3. Rather than issuing school cell phones to employees, consider a flat -rate monthly stipend. 4. Take extra precaution to en- sure that the board's director and officer liability insurance policy is always up -to -date. 5. Never sign a check for the school without clear support- ing documentation. 6. Request the school's bank to always send out two copies of the bank statement. One to the school and one to a board member (at his or her resi- dence or place of business). Most of these are just smart practices. While there is no such thing as zero risk, these are easy things the board can do to mini- mize risk. *NATS NAL CHARTER SCHOOLS INSTITUTE Practice #7 Hiring Its Own Independent Auditor One of the fundamental issues of board leadership is in under- standing that the board governs in behalf of an owner (Carpenter, 2006; Carver, 1997). Sometimes in the charter school sector, however, the ownership issue can seem unclear. Consider the following example: Anytown Charter School operates in a build- ing which was built by the educa- tion service provider, and all the teachers and the principal are em- ployed by the same company. The same provider owns the curricu- lum, the chalkboards and the com- puters. So, who owns the school? Answer: The public owns the school. Granted, the management company may own the building, etc., but they do not own the school. Worded slightly differ- ently, the public supplies the funds to the board to operate the school on its behalf. Under appropriate state law, the board may choose to contract some or all of its opera- tions to a management company but it cannot contract its fiduciary responsibility to provide oversight of a management company. For this reason, the board should retain its own auditor for the school's annual audit. (I strongly recommend an annual audit, not merely a compilation or review of the school's finances.) And like every other aspect of the school, the board should under- stand clearly that the auditor is working for them —not for the management of the school. Furthermore, the auditor hired by the board should certify to the board in writing that he or she does not have any financial inter- est in the performance of the man- agement company. For example, I recommend that boards not use an auditor that performs other audits for a particular service provider. Using a completely neutral third party is imperative in the au- diting process so that the board is assured that any issues raised by the auditor are not minimized or excluded in his or her report to the board. It also helps to build a relation- ship with a reputable auditor. The board may from time to time dur- ing the course of the year, have questions that they would like an outside expert to answer. Being able to tap the knowledge of the board's auditor can be a good way to acquire that knowledge. A final word about auditors themselves. Like any other service provider, not all of them charge the same level of fees or perform at the same level of expertise. The board should be sure to check ref- erences and only retain an auditor that does a thorough, timely job. While such services aren't cheap, in the long run the board will have taken reasonable steps to ensure the fiscal propriety of the school. You will probably find that, like all other services, you get what you pay for. Besides ensuring fiscal sound- ness in your school, an annual au- dit helps enable the school to pur- sue foundation grants and bank loans. This is because such organi- zations whose job it is to deal with money expect to understand the fiscal soundness of their prospec- tive clients. Should you expect any less as a charter school board member? © 2006 National Charter Schools Institute 7 national charterschools.org 1 (989) 771 -2999 "Using a completely neutral third party is imperative in the auditing process so that the board is assured that any issues raised by the auditor are not minimized or excluded in his or her report to the board." *NATIONAL CHARTER SCHOOLS INSTITUTE In Conclusion The two fundamental responsi- bilities of every charter school board are to ensure that the stu- dents are achieving what they should and that the funds which are entrusted to the school by the public are being properly handled. When the board fails to do either or both of these, it jeopardizes the existence of the school and brings the broader movement into disre- pute (p. 1). To accomplish sound fiscal management, the board should first understand that it is ulti- mately responsible for the school, even if it contracts with an educa- tion service provider or manage- ment company for various ser- vices (p. 2). The board needs sound fiscal internal controls established by policy (p. 3), and it needs to regu- larly monitor compliance with those policies (p. 4). The key to understanding inter- nal controls is to understand their purpose: to prevent an individual from having both the opportunity to perpetrate wrongdoing with school funds and to subsequently conceal it. Failure by the board to establish such controls is a failure to exercise its basic fiduciary responsibility. Part of the monitoring process involves reading and understanding regular financial reporting. If a board does not receive regular re- ports or it does not understand what they mean, it cannot properly moni- tor the school's finances. For most boards to perform this most impor- tant role, it will necessitate funding some training to acquire these skills (pp. 4 -5). Reasonable expenses to do so are legitimate. Part of sound fiscal management is in developing accurate budgets. A budget should reflect the mission of the school and it should be part of a larger plan (p. 5). Invariably, especially in the start-up years, ad- nationalcharterschools..org 1 (989) 774 -2999 justments to the budget will have to be approved. This is fine as long as the board understands what created the variance. The board should regularly compare budgeted amounts to actual amounts. It is also helpful for boards to recognize red flags. Although they don't necessarily indicate wrongdo- ing or incompetence, they should arouse the board's interest to inves- tigate further. If something seems wrong, find out why (p. 6). The board can also work proac- tively to minimize risks to the school by following some com- monsense practices (p. 6). These are easy steps that can go a long way in protecting the school. Finally, the board should always hire its own independent auditor. Complete objectivity is the goal (p. 7). The returns are well worth the auditing fees. For more information, see the list of references below or contact the National Charter Schools Institute. References & Recommended Resources Carpenter, B. L. (2006). The five dysfunctions of charter school boards: National Charter Schools Institute. (Free copies available to charter schools by calling the National Charter Schools Institute) Carver, J. (1997). Boards that make a difference: a new design for leadership in nonprofit and public organizations (2nd ed.). San Francisco, Calif.: Jossey -Bass. Lake, R. J., & Hill, P. T. (2005). Hope, fears & reality: A balanced look at American charter schools in 2005 [Electronic Version], 96. Retrieved February 2006 from http: / /www.crDe.or /g ncsrp/ pubs /2005 HopesFears.shtml National Association of Charter School Authorizers. (2003). Building excellence in charter school authoriz- ing: critical design issues, illustrations and case studies: National Association of Charter School Au- thorizers. National Association of Charter School Authorizers. (2005). Resource toolkit for working with education ser- vice providers [Electronic Version]. Retrieved February 2006 from http://www.charterauthorizers.org ©.2006 National Charter Schools Institute 8 NATIONAL RESOURCE CENTER ON CHARTER SCHOOL FINANCE & GOVERNANCE Using Municipal Bonds to Charter School Facilities Finance Walter D. Palmer Leadership Learning Partners Charter School, Philadelphia, Pennsylvania SUMMARY Charter school leaders often struggle to find financing for the construction of school facilities that meet their needs and to manage the complex process of putting this financing in place. In this promising practice profile, the National Resource Center on Charter School Finance and Governance highlights the success of the Walter D. Palmer Leadership Learning Partners Charter School in partnering with Mosaica Education, Inc., The Palmer Foundation, and the City of Philadelphia to use innovative financial management strategies to fund the construction of a new charter school facility. Inside: BACKGROUND As with many service and education institutions in urban W Implementation Details areas, charter schools throughout Philadelphia have been challenged for years in their Promising Practice in: search for adequate facilities and the means to acquire such facilities. Charter schools fv1 Charter School Finance often employ a variety of tactics in their efforts to meet this facility funding challenge, ❑ Charter School such as using operating funds to lease facilities or borrowing from private sources to Governance acquire the capital necessary for a facilities purchase. W Contact Information For the Walter D. Palmer Leadership Learning Partners Charter School in Implemented by: Philadelphia, the solution to the challenge of finding adequate facilities funding came in the ❑ State Policymaker form of a strategic partnership involving the school, Mosaica Education, Inc., The Palmer ❑ Charter Authorizer Foundation, and the City of Philadelphia. Together, these stakeholders used municipal iZ7 Charter Operator bonds to fund the construction of a new facility and facilitated economic development in ❑ Other the low- income neighborhood where the new building is located. Inside: W Implementation Details IMPLEMENTATION DETAILS Wd Impact The Leadership Learning Partners Charter School (LLPCS) began as the brainchild of 10 Lessons Learned Walter D. Palmer, Ph.D., a community activist and social work professor at the University W Additional Comments of Pennsylvania. Through The Palmer Foundation, he sought to promote leadership and 57 Useful Resources citizenship training for local students. In a strategic move to accomplish his vision, Palmer W Contact Information resolved to establish a charter school built on these principles. Together with Mosaica Education, Inc., an education service provider, he applied to the Philadelphia School District for a charter. In July 2005, the school received its charter from the Pennsylvania State Charter School Appeal Board. Finding and Financing a Facility From the outset, Dr. Palmer's vision included building a new school facility that could accommodate a planned student capacity of 750 students. Like many charter school devel- opers, however, Palmer and Mosaica found it difficult to find financing for such a project. In their search for finan- cial backing, The Palmer Foundation and Mosaica realized that tax - exempt municipal bonds were a potentially viable source of facilities funding (see Tax - Exempt Municipal Bonds below). To assure security for a bond, however, the school needed a track record as a successful enterprise. For a startup charter school trying to acquire its initial facilities, this requirement posed an immediate and a formidable chal- lenge. Nonetheless, shortly after the LLPCS commenced operations, the school began working with the Philadelphia Authority for Industrial Development, which would be the conduit issuer of the bonds. Tax- Exempt Municipal Bonds f A municipal bond is a debt security issued by a state, county, or municipality to finance its capital expenditures. Municipal bonds are exempt from federal taxes and from most state and local taxes, especially for residents of the state in which the bond is issued. Municipal bonds can be used to fund expenditures such as the construction of schools, bridges, or highways. The bonds most often are bought for their favorable tax implications. For more information, see htLp:i1Www.11 -,V ;,�ti5c�r:�� Keeping the ultimate goal of a newly constructed build- ing in mind, The Palmer Foundation and Mosaica sought a preexisting facility to house the school temporarily while they worked to build the school's reputation as a qual- ity education provider within the Philadelphia community. The partners found their startup facility in the form of a 150- year -old school building owned by the local Catholic Archdiocese. They negotiated a deal to acquire the build- ing, and Mosaica provided approximately $500,000 in loans nicipal Bonds to Finance Charter School Facilities to fund the leasehold improvements required to bring the building up to code. The construction was completed dur- ing the summer of 2000, and in September of that year, the Walter D. Palmer Leadership Learning Partners Charter School opened its doors. Getting Local Buy -in During the next five years of the school's operation, Mosaica and The Palmer Foundation worked to develop vital partnerships with key city officials to support the acquisition of available property and the construction of a new facility. The partners found several blighted proper- ties in downtown Philadelphia that they believed would make an excellent location for a new school construction project once the existing buildings were razed. Mosaica and Foundation representatives spent several years assur- ing city leaders that the school would be a critical vehicle for community redevelopment in the inner city. Eventually, they received the buy -in of the mayor, the City Council, and Philadelphia's Redevelopment Authority. Once on board, the City condemned the properties and, using the right of eminent domain, bought the proper- ties from their owners and deeded them to a charitable foundation, which then leased them to the school. To facilitate this process, Mosaica obtained a letter of credit from an outside investment fund to cover unanticipated or excess costs for the City. The partnership then began the bond issuance process to fund the construction of the new school building (see Key Terms below). Funding the School's Construction Mosaica and its partners identified tax - exempt bonds, to be issued by the Philadelphia Authority for Industrial Development, as the most cost - effective method of financ- ing LLCPS's facility construction costs, and on July 12, 2005, the school closed on a $10.7 million bond issue. Through the issuance of these bonds, the school received 100 per- cent of the funds it needed for construction, as opposed to the 80 percent or so that it would be allowed with most conventional bank mortgages. Moreover, because the bonds would be tax - exempt for investors, the school could reap the benefit of lower interest rates and longer principal amortization schedules than it would have been able to ne- gotiate from a bank lender. LLCPS was able to negotiate a 30 -year, fixed -rate mortgage at approximately 5.3 percent per annum. __HARTER ,CHOOL FINANCE 8 GOVERNANCE ... , • Using Municipal Bonds to Finance Charter School Facilities The bond issuance process took approximately nine months from beginning to end. Mosaica managed and coor- dinated the process, which proved to be very detailed and complex. Key steps included: • consulting and hiring bond counsel to draft the legal documents necessary for the bond issue and to deliver an opinion on the validity and tax - exempt status of the bonds; • hiring an underwriter to prepare the bond documents, coordinate the bond rating process, structure the financing of the bonds, and market the bonds to institu- tional investors; • obtaining the City Council's formal authorization for the Philadelphia Authority for Industrial Development to issue the bonds, execute all legal documents, and deliver the official statement; and • marketing the bonds to potential investors through the underwriter's distribution of the official statement and convincing potential bondholders that the school was a worthwhile investment in the inner city's economic development. As mentioned above, $10.7 million of bonds were is- sued, with 30 -year terms and a fixed interest rate of ap- proximately 5.3 %. Funds for repayment come from the school's operating revenues, and the bonds are being paid off as if they were a traditional mortgage. As a result, facili- ties costs for the new school building have been lower than when the school was paying rent, and yet the school is de- veloping equity in the building. IMPACT In August 2006, LLPCS opened the doors of its new school building to staff, students, and families. According to Michael Connelly, Mosaica's President and Chief Executive Officer, the school is more than an educational facility for 675 students. It is a source of tremendous community pride, because the facility has brought new jobs to neighborhood residents and raised the value of housing in the area. The noticeable impact the construction of the new Leadership Learning Partners building has had on the surrounding com- munity illustrates.the role that charter school construction can play in the economic development of blighted inner -city neighborhoods. Bond Counsel —an attorney or legal firm that reviews legal documents on new municipality issues, represents the bond- holders' interests during a bond offering, and prepares the legal opinion attesting that the issue is legal, valid, and binding. I Leasehold Improvement —an enhancement to a leased asset that increases the value of said asset. Z Right of Eminent Domain —a right granted under the Fifth Amendment of the U.S. Constitution that gives the govern- ment the power to seize the property of an individual, often without the individual's full consent, for public enterprises such as roads, schools, or utilities installations. In most cases, the land owner is compensated for the land at fair market value. 3 Stority—an instrument or contract that represents a debt agreement and can be assigned a value and traded. 4 Underwriter —an entity, usually a bank or other financial institu- tion, that serves as an intermediary between a bond issuer and the investing public. 5 I Investopedia, httt:: ivv,.investoRedia.con. /terms /h /hondattoi 2 Investopedia, httLiLw ww.invetstopedia com /Lerm1Wleaseholdlm 3 Investopedia, http_J /www.inys �gc i3.nntlt LQmin - 4 Investopedia, ,I t;,:i; �w. invest ooedia•com /t�ttsISLCUritv�sp 5 Investorwords.com, ',�t�1!!w_ w.inv ?cto+ word_,.c�m(51341und€ LESSONS LEARNED Throughout the complex process of acquiring the municipal bonds, Mosaica, The Palmer Foundation, and their com- munity partners encountered a number of challenges and opportunities that impacted their ability to access the funds needed to construct a new school building for the Leadership Learning Partners Charter School. Implementation Challenges To find financing for the new Leadership Learning Partners Charter School facility, The Palmer Foundation and Mosaica first had to combat the bond market's lack of familiarity with charter schools. The key to overcoming this challenge proved to be encouraging bond investors to see the char- ter school as a sound investment in the local community. 3 PROMISING SCHOOL Using Municipal Bonds to Finance Charter School Facilities FlNANCE i GOtlERNANCE a low �. This strategy also proved valuable as the partners sought to build the political support needed to move forward with their financial strategy. To access municipal bonds, The Palmer Foundation and Mosaica had to obtain the backing of the City of Philadelphia and its Redevelopment Authority and demonstrate that the school would contribute to the social and economic development of the surrounding com- munity. Ultimately, the partners were able to help local leaders recognize the potential that the educational facility had to positively impact the social and economic conditions of the neighborhood and residents it served. "if you don't have the details managed properly, the whole house of cards falls down." Michael J. Connelly, President and Chief Executive Officer, Mosaica Education Keys to Success According to Connelly, several factors have contributed to the success of the facility funding initiative. The most im- portant component of this process, Connelly explained, is having a leader with a clear vision, skillful management, and the ability to build consensus. • A clear vision means having the ability to look at the big picture, see the end goal clearly, and put all the nec- essary pieces together to achieve that goal. • Skillful management means having the knowledge and ability to carefully manage the large number of detailed tasks that are involved in carrying out a sophisticated financial initiative. "If you don't have the details man- aged properly," Connelly said, "the whole house of cards falls down." • The ability to build consensus means being able to pull together all the key players —from political and administrative support at the city level to lawyers and financiers —to make the partnership work. The City's support was essential to the process. City representa- tives assisted Mosaica, The Palmer Foundation, and their community partners in acquiring the property for the new building, issuing the bonds necessary to fund the project, certifying that the school was "effective," and declaring that the bonds qualified for tax - exempt financing. ADDITIONAL COMMENTS Mosaica Education, Inc., has been recognized on numerous occasions for its role in the economic development of in- ner cities, including Philadelphia. In 2007, Mosaica won the Inner City Impact Award, conferred by the Initiative for a Competitive Inner City (an affiliate of Harvard Business School) for the impact its programs have had on inner -city life nationwide. The organization has also been on Inc. mag- azine's Inner City 100 list of the fastest - growing businesses in inner cities for four consecutive years. USEFUL RESOURCES • Investopedia. littp://www,investopedia.com • Mosaica Education, Inc. http / /wwwmosaicaeducation corn/ • Redevelopment Authority (for Philadelphia). http: / /www_phila.F,ov /rda/ • Walter D. Palmer Leadership Learning Partners Charter School. http • / /www.leadershiplpacademy.or7 CONTACT INFORMATION Michael J. Connelly President and Chief Executive Officer Mosaica Education, Inc. httD : / /www.mosa.caeducation.com/ mconnelly_(Mmosaicaeducation com Walter D. Palmer Leadership Learning Partners Charter School 910 North 6th Street Philadelphia, PA 19122 http://www.leadershiplpacademy.org/ 215- 739 -2007