The NewSchools Venture Fund now has more than $65 million in its Charter Accelerator Fund after a $22 million investment from the Bill & Melinda Gates Foundation. The San Francisco-based venture philanthropy firm will use the funding to develop a minimum of five charter management groups that will create 20 new schools serving about 8,000 students over the next two years. The funding will launch a total of 100 new schools and serve 40,000 students over the next 10 years.
In addition to the Gates Foundation, other investors in the Charter Accelerator Fund include the Broad Foundation and the Walton Family Foundation. The Charter Accelerator Fund helps start charter schools to help students throughout the United States in areas lacking strong educational systems.
The donation is a significant development in the non-profit firm’s quest for more foundation and institutional investment. The fund currently has about twice as many individual donors as institutional donors. “We’re such an unusual institution, it’s taking a while to make the large foundations understand that this value-added intermediary makes sense,” says Kim Smith, co-founder and chief executive officer of NewSchools Venture Fund. “On the impact side, the thing that is the most challenging is finding what we call hybrid entrepreneurs, leaders who understand both the business part of what we do and educational part of what we do. We need people who understand the inside of how good education works and the strategic and organizational things that make institutions work. Those are special talents and it can be tough to find at times but we’re getting more and more of them.”
NewSchools Venture Fund has investment partners who make investments in both for-profit and non-profit entities that seek to improve education for grades K-12. Any profits the firm sees from its investments are re-invested in the fund to support more educational investment. Its portfolio includes non-profit organizations like New York-based Teach for America and for-profit Teaschscape, also based in New York.
In May, NewSchools Venture Fund announced it was raising a new fund, the Performance Accelerator Fund, with a goal of $20 million. The new fund will be used to provide training to teachers and educators and to develop educational assessment tools. It plans to raise its minimum investment amount from between $200,000 and $1 million to between $500,000 and $5 million.
The NewSchools Venture Fund was founded in 1998 by Smith and Kleiner Perkins Caufield & Byers partners Brook Byers and John Doerr. The fund has invested $20 million into 10 organizations.