Memorandum
To: Don Shalvey, CEO
From: Student ID
RE: Aspire Public Schools Strategic Recommendation
Date: April 21, 2013
Aspire Public Schools, after only 4 years of opening, has acquired a reputation for school quality and is a leader of the national charter school movement. Aspire has the great task and mission of serving children in need and influencing sector-wide reform. Aspire’s main desire to launch and operate a network of outstanding charter schools in California (CA) that would influence large scale improvements in CA’s troubled system of public education and to be a platform for influencing education policy remains a great challenge.
The organization is in the right path towards its mission and vision, currently operating ten public charter schools in northern CA. However, surpluses from Aspire’s current base of ten schools are inadequate to support the staff and activities of Aspire’s central office. It also isn’t a large enough base to generate adequate economies of scales and stabilize the financial model. Furthermore, the organization needs to grow to affect education policy and sector-wide reform.
In addition, CA’s political climate is very volatile, so building political networks is very important. Several bills and propositions that seemed very promising to provide funding for public charter schools, such as Bill 740, Proposition 39 and Proposition 47, didn’t provide the expected results. Aspire also had to adequate to the regulatory and political realities of education in CA, which was the STAR requirements, without shifting away from its progressive, student-centered, quality driven educational model. Currently, four out of six evaluated schools exceed both state-issued progress targets and internal Aspire goals. However, only one school has an API value greater than 800, which is the state-set ultimate goal. Moreover, Aspire has the challenge of lowering the average cost of operating their facilities from 17% to 12% of school revenues.
Despite these challenges, Aspire was doing well and was offered an opportunity. The Los Angeles Unified School District (LAUSD) with over 700,000 students and 650 schools in its province, wanted Aspire to open dozens of schools in Los Angeles (LA) in the next several years. Due to student population growth, LAUSD’s existing school capacity would fall about 130,000 seats short of demand. LAUSD assembled an alliance of philanthropies that would subsidize expansion, about $50 million dollars to support facilities costs on land owned by Aspire.
So, Aspire faces an opportunity to grow towards southern CA, and they have needs to grow to achieve self-sufficiency and to fulfill their mission and vision. What should Aspire do to be able to meet their financial needs and fulfill their mission and goals?
Aspire has three potential alternatives to consider. Each alternative’s effectiveness has been measured by its influence on the following criteria: alignment with mission and vision, financial sustainability, growth, and political support.
One alternative for Aspire is to stall growth, refine what they’re doing, and in a few years reconsider entering LA. This option would allow Aspire to refine its operational systems and consolidate their existing schools. However, this doesn’t align with Aspire’s vision of making large-scale improvements in California’s public school education. Moreover, they wouldn’t be growing to serve more children in need, and with 10 schools Aspire isn’t financially sustainable.
Another alternative is to keep growing in Northern CA for a couple of years, and eventually grow inward and down the coast towards LA. This option would allow Aspire to have a focused growth in an area in which you already have a political network established. You would also be able to refine their operations and processes, while raising the quality and performance of their existing schools. This would also align with Aspire’s mission and vision, as you would be