Education Charity Grows by Aggressively Seeking Government Aid

In the summer of 2007, Citizen Schools was flying high. The nonprofit, which provides after-school educational opportunities to needy children, had just received $30.8-million from a group of foundations to embark on a national expansion plan.

Then, as the year ended, the recession began and things started getting rough: in 2008, the organization was operating at a $1.4-million deficit that grew to $4-million a year later.

The troubled state of the economy and the group’s finances would have caused some groups to recoil. But it kept going with the expansion plan, which was designed to spur growth by expanding the number of public school districts where it has contracts to operate after-school programs. It also sought federal aid through programs that seek to help middle schools in economically troubled neighborhoods.

That turned out to be a good bet. Today its revenue has rebounded by 50 percent from 2008. It closed its fiscal 2012 year in June with $27-million in hand.

Government grants to the nonprofit have increased 238 percent since 2007 and now provide $7.8-million, or 28.5 percent of Citizen Schools’ total budget (up from 9 percent in 2007).

The growth plan required some pain for employees. The group canceled bonuses, cut executive pay, and imposed furloughs during the same years it was pursuing its expansion. It also restructured its operations, providing more money to the programs in the schools and less to its headquarters in Boston.

A Good Evaluation

Citizen Schools was ready to fight the economic downturn largely because its program had been rigorously evaluated in 2006 when the State of Massachusetts was running a comprehensive effort to improve student performance. The results showed that kids who participated in Citizen Schools programs were more likely to attend classes, get high test scores, and graduate than kids not in the program.

The findings attracted the attention of the Edna McConnell Clark Foundation and 18 other grant maker that joined forces to finance the expansion effort with nearly $31-million.[Editor’s note: An earlier version of this article said the Bill & Melinda Gates Foundation was one of the 18. It is not.]

The money helped Citizen Schools improve its programs, finance two additional rigorous evaluations, lobby governments to spend more on education, and expand its efforts to pair middle-school students with architects, lawyers, doctors, and other professionals to inspire them to succeed.

Citizen Schools now has operations in eight states and nearly 31 school districts, serving over 5,000 students. [Editor’s note: The previous sentence clarifies the number of school districts where the organization works.]

The organization, which was founded in 1995, got a big boost in 1998 when it received money from the AmeriCorps national-service program; local government support has also been key since its beginnings. [Editor’s note: The previous sentence was revised to show that AmeriCorps money began flowing to the nonprofit in 1998, not 1995.]

More than a decade later, when its evaluation results made it easier to get government money, it made the case to AmeriCorps that it needed more money. The evaluation had shown that the more national-service workers Citizens Schools had, the better it did in improving student performance.

The same dynamic happened at the local level. As Citizen Schools worked with more school districts, it became increasingly better equipped to show widespread increases in achievement that went well beyond what the 2006 study found. That helped it spread its work outside Massachusetts and allowed it to shrink spending on its national headquarters.

Foundations, led by the Clark Foundation, again wanted to join in, so they provided $11-million for the effort to include more students in existing school districts.

Advocacy Helps

Advocacy work has also helped the group spread its mission and bolster its own finances.

Citizen Schools has also spent nearly $1-million since 2008 to lobby Congress to extend the No Child Left Behind Act and the Elementary and Secondary Education Act, which both provide money to support Citizen Schools programs.

The group’s emphasis on seeking government aid has continued to help it grow, especially since it is promoting educational ideas that are popular with the White House. The nonprofit’s founder, Eric Schwarz, has often appeared at White House events that promote education.

President Obama has made it clear that he wants government agencies to step up their efforts to give money to nonprofits that can prove they are making a difference.

For instance, when the president released his fiscal 2014 budget proposal last month, he called for a 44-percent increase, to $215-million, in the Education Department’s Investing in Innovation program, which supports groups that can show strong evidence of their success.

In November, Citizen Schools won a $3-million grant from the innovation program; it has since raised $775,000 more from corporate donors as part of the government’s requirement that the innovation aid be partially matched with private donations.

The organization beat out 650 other applicants to build a version of its after-school program focused on science, technology, engineering, and math education, also a priority of the Obama White House.

“We have worked really hard to be in this place,” says Kait Rogers, chief financial officer of Citizen Schools. “We don’t take anything for granted.”