Denver charter schools got $16 million in federal small business aid

Justin Walker helps STRIVE Prep – Montbello students work through a problem during a seventh-grade biology class on January 30, 2017.
STRIVE Prep teacher Justin Wallace helps students work through a problem during a seventh grade biology class in 2017. (Seth McConnell / The Denver Post)

Denver charter schools received a total of $16 million in federal coronavirus relief funds meant to help keep small businesses afloat during the pandemic, according to a memo prepared by Denver Public Schools staff at the request of a school board member.

Charter school critics nationally have balked at charters receiving federal Paycheck Protection Program funding, which is not available to traditional public schools.

But Denver charter leaders have committed to reckoning with any inequity created by the funding — a move the memo identifies as unique to Denver. Leaders said that could mean charters taking less than their share of other federal coronavirus relief funds earmarked for Denver schools, leaving more money for district-run schools.

All Denver schools — charter and district-run alike — are facing shrinking budgets next school year. Colorado schools get a large portion of their funding from the state, and lawmakers cut next year’s education budget after COVID caused state tax revenue to plummet.

Denver charter leaders say the federal paycheck protection funding helped soften the fiscal blow. Many Denver charters serve high numbers of students from low-income families and other groups whom the district has prioritized reaching during the pandemic.

Across the country, not all charter schools have been forthcoming about how much federal paycheck protection funding they received. By contrast, Denver Public Schools wrote a memo at the request of school board member Scott Baldermann. The memo, which the district provided to Chalkbeat, laid bare the funding and the possibility of reconciling it.

“I am not aware of any other place in the country where this conversation has even surfaced as ​possible​,” said the memo from Jennifer Holladay, who heads the department that oversees charter schools in Denver Public Schools. “It reflects deep commitment among Denver charters for both our family of schools and the idea that we are truly in this together.”

Charter schools are publicly funded but run by independent boards of directors, not school districts. All Colorado charters must be non-profit organizations, which is why they qualified for the funding. (Chalkbeat is also a nonprofit and received federal paycheck protection funding.)

Denver Public Schools is nationally known for collaborating with charter schools by sharing buildings and tax revenue. The independent charter schools can opt out of some rules most traditional schools have to follow, which teachers unions and others think is unfair.

About half of Denver’s charter schools — 32 of 60 — received paycheck protection funding, the memo says. The awards range from a high of $5.9 million to the STRIVE Prep network, which runs 10 schools, to a low of $133,000 to The CUBE, a new high school that opened last fall.

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Those 32 charter schools serve more than 10,500 of Denver’s 92,000 students. The schools received an average of $1,468 per student in paycheck protection funding. 

That’s a significant boost. Denver schools got just $8,740 per-student in state education funding for the entire last school year. They’ll get even less next year due to the state budget cuts.

Denver’s largest charter school network — DSST Public Schools, which runs 14 schools in Denver and one in neighboring Aurora — did not qualify for federal paycheck protection funds because it’s too big, the memo says. Other Denver charters qualified but did not apply.

Chris Gibbons, founder and CEO of STRIVE Prep, said his network applied for the federal funding in part to avoid layoffs. Even with the extra funds, he said STRIVE is eliminating 12 positions next year, freezing some employees’ wages, and shrinking teacher raises from 4% to 2%. Top leaders, including Gibbons, will see their pay reduced.

“Our board, and me and my team, took a hard look at all the issues surrounding it,” Gibbons said of the federal funding, “and felt that under the circumstances, the more support we could provide for our teachers and our kids, the better.”

Girls Athletic Leadership Schools, which has three schools, got $841,700. When COVID hit, GALS lost some of the philanthropic dollars it depends on to balance its budget as funders shifted their priorities, said Executive Director Carol Bowar. She said she was thinking of GALS’ role as a small nonprofit when she applied for the federal funding. Still, Bowar said GALS will have to cut some positions next school year, as well as freeze employee salaries.

Denver Public Schools is also anticipating deep budget cuts and has already reached an agreement with the Denver teachers union to shrink teacher raises next year.

In addition to the $16 million in paycheck protection funding that some Denver charter schools received, all Denver charter schools will split a share of federal aid from the Coronavirus Aid, Relief, and Economic Security Act. About $21 million of the $88 million slated for Denver Public Schools is earmarked for charters, the memo says.

If a district analysis finds that Denver charters got more than their share of federal aid, all told — and if the federal government forgives the charters’ paycheck protection loans — the memo says the charters would reconcile with district-run schools by the end of the fiscal year.

Board member Baldermann said he’s hopeful the charters will honor that commitment. Baldermann was endorsed by the Denver teachers union, which is critical of charter schools.

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“We’re public schools; we should probably know what money is coming into the system,” Baldermann said of why he requested the information after reading about the issue nationally.  “I’m happy to see in that memo that there are discussions around sharing.”

Read the full memo below.

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