Nonprofit Real Estate Trusts: Viable Solutions to the Charter School Facilities Challenge

September 1, 2006

One of the most persistent challenges that charter school entrepreneurs face is in finding, developing and paying for school facilities. Charter school operators and systems are forced to excel in two businesses simultaneously: the business of educating our nation’s most underserved children, and the business of real estate development.

NewSchools Venture Fund believes that a promising way to remove this burden is to establish nonprofit real estate trusts (NRETs), expert intermediary organizations that acquire, develop and lease education facilities to a broad portfolio of charter school operators. By aggregating capital from multiple sources and consolidating expertise within an NRET – rather than in the principal’s office or the central office of a charter school system – these trusts can help facilitate the continued growth of the charter school movement.