New York, May 4, 2010 - JPMorgan Chase announced today a $325 million initiative to support the growth of high-performing U.S. charter schools in today's challenging credit environment.
"Many charter schools have expanded access to academic opportunities for students in all types of communities, so we shouldn't let tough economic times bring them down," said JPMorgan Chase Chairman and CEO Jamie Dimon. "Improving educational opportunities is a cornerstone of JPMorgan Chase's philanthropic giving."
The bank will provide $50 million in grants to community development financial institutions (CDFIs) focused on funding charter schools. In turn, these institutions will use these grants as permanent equity, which they will leverage to fund top-performing charter schools.
Additionally, JPMorgan Chase will work with the CDFIs to provide about $175 million in debt and approximately $100 million in New Markets Tax Credit equity to support the development of charter school facilities. This will allow the CDFIs to access Obama Administration financing programs designed to help charter schools meet facility needs.
JPMorgan Chase estimates that this initiative will help underwrite about 40 charter schools, which will serve more than 50,000 students throughout the term of the loan.
Initial CDFI partners include The Reinvestment Fund of Philadelphia, The Low Income Investment Fund of San Francisco, and NCB Capital Impact of Arlington, Va. Additional partners will be announced later in the year.
"The Low Income Investment Fund (LIIF) is proud to be one of the partners with JPMorgan Chase on this initiative. Through this financing initiative, JPMorgan Chase and LIIF will invest in exceptional educational opportunities for thousands of low income students," noted Nancy O. Andrews, President and CEO of LIIF. "A key constraint to growth for many high performing public charter schools is their ability to finance facility development or enhancement. By providing an equity investment, JPMorgan Chase and LIIF will give schools access to affordable capital in a difficult credit environment."
The grants to help charter schools are part of JPMorgan Chase's larger $100 million grant initiative for CDFIs that also support small businesses, community healthcare centers, green initiatives and affordable housing. Details on the rest of the initiative will be announced later this year.
"JPMorgan Chase has been a committed partner to the CDFI industry by providing critical access to capital where it otherwise might not exist," said Terry Simonette, President and CEO of NCB Capital Impact. "This new initiative continues that commitment by providing the critical capital that is required for charter schools to meet the need for access to quality education in low income and underserved communities."
Despite the increasing demand by families across the country for charter schools, they have found it difficult to arrange financing for expanded and new facilities.
While public school districts can access the municipal bond market for long-term funding, charter schools almost always pay more for financing because lenders require higher interest rates from the relatively new industry.
"In these next seven years, this new investment by JPMorgan Chase in The Reinvestment Fund projects will allow us to create school opportunities for thousands of students," said Jeremy Nowak, President and CEO of The Reinvestment Fund. "This major investment certainly positions the bank as a national leader supporting charter schools and meeting their significant unmet financial needs."
JPMorgan Chase sees high potential for improving childhood education and community development through charter schools, and is committed to their development. The bank has been an active supporter of public school education, donating $181 million in education grants over the last five years. Additionally, the bank provided nearly $12 billion in financing to education institutions and school districts through lending and bond underwriting in 2009 alone.
Community development financial institutions that fund charter schools and are interested in applying for a grant through this new program should contact JPMorgan Chase at CharterSchools.CDFI@jpmchase.com.
About JPMorgan Chase
JPMorgan Chase & Co. (NYSE: JPM) is a leading global financial services firm with assets of $2.1 trillion and operations in more than 60 countries. The firm is a leader in investment banking, financial services for consumers, small business and commercial banking, financial transaction processing, asset management and private equity. A component of the Dow Jones Industrial Average, JPMorgan Chase & Co. serves millions of consumers in the United States and many of the world's most prominent corporate, institutional and government clients under its J.P. Morgan and Chase brands. Information about JPMorgan Chase & Co. is available at www.jpmorganchase.com.
About the Low Income Investment Fund
Since 1984, the Low Income Investment Fund (LIIF) has served more than 700,000 people by providing over $825 million in financing and technical assistance to hundreds of community organizations serving the nation's poorest and hardest-to-reach populations. LIIF's primary program areas are affordable and supportive housing, child care and education facilities benefiting low income people and families. Over its history, LIIF has generated over $15 billion in societal and family benefits and provided the financing and technical assistance to create and preserve: 54,000 units of affordable housing; over 123,000 child care spaces; 47,000 spaces in schools; and 3.2 million square feet of community facilities and commercial space. LIIF has offices in San Francisco, Los Angeles, New York City and Washington, D.C. For more information about LIIF, visit www.liifund.org.
About NCB Capital Impact
NCB Capital Impact helps people and communities reach their highest potential at every stage of life. As a national, non-profit community development organization, NCB Capital Impact provides financial services and technical assistance to help make high-quality health care, housing, and education more accessible and attainable, and eldercare more dignified and respectful. NCB Capital Impact will use its depth of experience, cooperative approach, and diverse network of alliances and generate critical investments that create a high quality of life for low income people and communities. To learn more, visit www.ncbcapitalimpact.org.
About The Reinvestment Fund
The Reinvestment Fund is a leading innovator in the financing of neighborhood and economic revitalization. Central to its mission is a commitment to put capital and private initiative to work for the public good. TRF manages $680 million in capital and has made almost $1 billion in community investments, financing more than 2,530 projects since its inception in 1985. In pursuit of its mission, TRF finances homes, schools, food access and sustainable energy using loan, equity and other financing tools. It supports its financing with a strong research and policy analysis capacity that has become a highly regarded source of unbiased information for public officials and private investors. TRF's analytical strength is also reflected in its national online data and mapping tool that is available for all internet users at www.policymap.com. The tool offers thousands of data indicators to help users understand a place, compare places or track investments in a place. To learn more about TRF, visit www.trfund.com.