Achievement First – Strategic Overview

Achievement First – Strategic Overview Presentation to the Charter School Growth Fund August 12, 2009

Our Mission The mission of Achievement First is to deliver on the promise of equal educational opportunity for all of America's children. We believe that all children, regardless of race or economic status, can succeed if they have access to a great education. Achievement First schools will provide all of our students with the academic and character skills they need to graduate from top colleges, to succeed in a competitive world, and to serve as the next generation of leaders of their communities.

Agenda • Overview: The Case for Investment in AF • Strategic Plan: Key Focus Areas • Quality • Direct Impact • Systemic Impact • Scale • Sustainability • AF’s Path to Success: Strengths and Challenges • Experience • Strengths • Systems • People • Politics • Challenges and Risks • Partnering with CSGF • Discussion

Overview: The Case for Investment in AF • AF has a 10-year track-record of some of the strongest student performance results in the field, including outstanding results at the elementary, middle, and high school levels and at multiple sites. We have already proven that we can “replicate” success. • When there have been instances of lower than expected performance, AF has not made excuses or lowered its bar but rather has dealt aggressively with the problem, replacing school leadership and modifying our program as necessary. While we still have work to do, we remain unambiguously focused on excellence. • AF is already half way through the successful execution of its aggressive growth plan with 17 academies and 4,500 students – making us already one of the largest CMOs in the country. Many of our systems and strategies have already been tested at significant scale. We also have attracted a very talented leadership team to ensure continued excellent execution. • AF has intentionally designed replicable systems and processes, both to support its own growth and to share with others. AF is known as a “systems-thinker.” AF tools and strategies have already been a resource to many other CMOs. • AF has a clear path to sustainability and an efficient, scalable economic model. The Central office has already started to need declining resources and is only three years from breakeven. All AF schools are on track to spend less per pupil than their host districts and many have already reached financial self-sufficiency. • AF is having a direct, life-changing impact on the students we serve – and a significant systemic impact on the overall ed reform ecosystem, driving state-wide policy change in Connecticut and successfully “tipping” the city of New Haven toward more aggressive, meaningful reforms.

Overview: AF’s Approach to Excellence at Scale • AF is working to achieve true gap-closing excellence at significant scale by intentionally focusing on three key areas for investment: Systems, People, and Politics. • Systems: AF has worked from the beginning to design, develop, or purchase scalable systems for most key functions, including finance, data management, student information, and teacher recruitment. Beyond our own use, we are close to an agreement with Wireless Generation to commercially distribute AF’s innovative data management system for use by other CMOs and districts. • People: AF knows that teacher and school leader effectiveness are the greatest drivers of student achievement. With the hiring of a Chief Talent Officer in 2007, AF launched a significant investment in talent recruitment and development and is working aggressively on principal training, teacher coaching, and teacher evaluation/compensation initiatives that we believe will ensure the AF recruits, develops, and retains the talent we need for the long-term. • Politics: AF has always understood that it is not enough to simply run great schools but that we must work intentionally to influence the ecosystems in which we operate. AF’s advocacy has had a direct impact on transforming the environment for education reform in the states and districts in which we operate.

AF’s Strategic Plan: Areas of Focus • Quality: Our goal is gap-closing, college-preparatory success for all students. • Scale: We aim to be a proof point for most U.S. school districts that student success is possible at scale. • Sustainability: We will operate at the same cost as our host districts, eliminating another “yes, but” excuse and ensuring our long term viability.

Expansion Plan Focus Area: Quality • AF has an uncompromising attitude about student achievement – “Results without Excuses” is our most important core value • Our achievement targets have helped raise the bar for the charter movement, and we have already begun to show that they are well within reach: • After four years at AF, 95% of scholars will be proficient in core subjects • AF will close the achievement gap by ensuring that the performance of its 4th, 8th, and 12th graders from low income families exceeds the state-wide performance levels of non-low income students • At least 90 percent of AF students will graduate from high school within five years of starting 9th grade • At least 75 percent of AF high school graduates will receive a college BA degree within six years of graduating high school • The charts on the following pages summarize our 2009 student achievement results and were accomplished with less than 4% annual attrition among our student population.

Direct Impact: Elementary School Results Results in both CT and NY for our 4th graders show consistent outperformance of district, city and state averages

Elementary Schools Relative Performance in NYC New York City is home to many of the highest-performing charters and CMOs in the country. Amongst this very competitive landscape, AF elementary schools performed very well.

Direct Impact: Middle School Results Since state tests are given in all grades in middle school, we can clearly see the progress scholars make over four years at an AF school * The charts below show the progress of a cohort over time from 5th grade (after only one year at AF) to 8th grade and the relevant city and state comparisons. In CT, we have two schools with 8th grade (Amistad & Elm City) so the results are combined. In NY, only AF Crown Heights has been open for 4 years and has an 8th grade.

Direct Impact: High School Results Currently, Amistad-Elm City High School is our only high school, so these results reflect the accomplishments of just this academy, but they show a strong start for our high school model

Direct Impact: AF Hartford Example Even our newest schools are having an impact on the districts in which they operate in their very first year.

Quality Challenges: AF Endeavor Middle School We have not been satisfied with the results from all of our academies – AF Endeavor Middle School’s reading results, while solid by some standards, did not meet our standard for excellence, and we have taken strong action fix the situation 2007-2008 2008-2009 2006-2007

Systemic Impact: New Haven • During the time AF has been operating in New Haven, our relationship with the city has gone from benign neglect, to open hostility to active cooperation on district-wide reform • BEFORE -- February 2008 – A Letter from John DeStefano, Mayor, New Haven, to State Rep Ron Burns • “The truth is that traditional public schools are just as effective as charters, doing more with less while facing greater challenges.” • “I believe the socio-economic situation of our families is the biggest variable.” • “Real Solutions: Do more to improve families’ socio-economic status. Come up with a plan to improve student attendance from Pre-K to 12. Have a real plan to deal with Behavior Issues [sic] in schools, so that students can learn and teachers can teach” • July 2008 – Mayor DeStefano joins the Amistad Board of Directors • AFTER – March and July 2009 – Excerpts from Mayor DeStefano’s announcement of his re-election campaign and a letter in support of the renewals for Amistad Academy and Elm City College Prep’s charters • “Public School reform is the civil rights issue of our time.“ • “Our proposed reform seeks to have a differentiated approach to managing schools and bringing charter schools into our choice system.” • “I consider Amistad and Elm City College Prep an important part of our overall effort in New Haven to ensure that every child receives a high-quality education. I support their work because of their strong record of student achievement gains.” • District-wide reform plan announced based on 4 pillars: (1) a comprehensive district accountability system with aligned rewards & consequences; (2) recruitment and development of outstanding teachers & leaders, including a new, “professional” union contract; (3) a “portfolio” approach to managing the district with a greater role for charter schools; and (4) a “New Haven promise” program that will provide college tuition assistance to qualifying students

Systemic Impact: NYC, Bridgeport, Hartford, the US • Joel Klein, Chancellor, New York Department of Education • “I knew about the work Achievement First was doing up in New Haven, and it was really path-breaking work. So, I wanted that model to be available as part of our school reform effort in NYC.” • Bill Finch, Mayor, City of Bridgeport • “The track record of Achievement First is so incredible for underprivileged children.“ Said upon sale of two Bridgeport school buildings to Achievement First for $350,000. • Steven Adamowski, Superintendent, Hartford Public Schools • “Achievement First Hartford Academy is a critical element in our plans to reorganize Hartford Public Schools.” • Arne Duncan, Secretary of Education • “We have great charter networks like Aspire, KIPP, Achievement First and Uncommon Schools. You’re steadily getting to scale. Today, I am challenging you to adapt your educational model to turning around our lowest-performing schools.”

Expansion Plan Focus Area: Scale • AF believes it is critical to achieve sufficient size to be a proof point to districts and other CMO’s that the achievement gap can be closed at scale. • AF has pursued an aggressive growth plan, growing by 1,343% in the last 6 years, from 1 to 17 schools and from 300 to 4,500 students. • We plan to have more than 30 schools serving more than 12,000 students within 7 years. • We are by far the largest charter operator in Connecticut, holding more than 40% of all charter seats in the state. • After receiving Joel Klein’s invitation to come to New York, we grew from being an outsider to becoming the largest CMO in NYC in terms of the number of students we serve. • At full scale, AF will serve more students than 95% of all U.S. districts and will serve more low-income students than 97% of all U.S. districts.

Expansion Plan Focus Area: Scale AF is in the middle of its growth plan

Expansion Plan Focus Area: Sustainability • A central goal of AF is to build a district that closes the achievement gap at scale on the same level of public funding (or less) than our host districts. • We have already made tremendous progress towards this goal, even though we are only in the middle of our expansion plan • 8 of our 9 NY academies are already self-sufficient and have surpluses that will fund the start-up of the other academies in their K-12 charters and all are on track to be self-sufficient. • 6 of our 8 CT academies already operate at a lower cost per pupil than their host districts and all are on track to do so. • In the midst of the significant economic downturn, in the FY09 fiscal year, we achieved mid-year cost savings of $1.8 million, while still reaching our philanthropy goal of $12.2 million (our largest effort). • In 2009-2010, for the first time, we expect our philanthropic needs to decline, and we expect that reduction to continue until we reach self-sufficiency. • We have already secured permanent facilities for 15 of our 17 academies, eliminating one of the greatest challenges (and expenses) faced by charter operators.

Cost Per Pupil 2009-2010 – NY Despite not yet being at full scale, AF’s per pupil costs are on average already lower than those of our host district in NY– it’s only our new schools that are not yet there, as they have not yet achieved full economies of scale

Cost Per Pupil 2009-2010 – CT On an apples-to-apples basis, we are also at our goal in CT, although we are not yet funded at the same level as our host districts, and in New Haven, do not yet receive funding or buildings to meet our facilities needs

Philanthropy Despite the toughest conditions we have seen, we continued our track-record of fundraising success in FY09, raising more in a single year than we ever have before, and we expect our needs to decline from this point forward. * *Reflects philanthropy raised/needed for operating costs only – does not include capital or one-off projects (e.g., AF Athena)

AF’s Strengths: Experience • AF has been tested over its 10 years in operation • We have made difficult choices, like non-renewing school leaders and delaying school openings because we didn’t have the right leader • Our systems have been pushed by our growth and have either withstood them or been replaced by more robust processes • We have responded to difficult economic conditions with budget cuts and have implemented significant cost savings initiatives to take advantage of our economies of scale • We have implemented processes for continuous improvement, such as our school report cards, board evaluations, the use of the Balanced Scorecard, and frequent built-in times for reflection and planning (principal retreats, AF Central retreats, AF-wide PD days, etc.)

AF’s Strengths: Systems • AF has always taken a rigorously systematic approach, knowing that only through robust systems is scale and replication possible. • One of the most developed of our systems is our data-driven instruction process, of which AF Athena, our proprietary, web-based interim assessment platform, is a critical part. • The original Athena received independent sources of funding from the Michael and Susan Dell Foundation and from New Schools Venture Fund, which enabled us to develop and launch the first integrated data-driven instruction system of its kind. • We are in the process of launching Athena 2.0, which is being built under a three-way agreement between Achievement First, Wireless Generation, and New Schools Venture Fund to enable Athena to be replicable across organizations and commercializable. • Other examples of core systems that we have developed are our centrally driven tutoring programs, our coaching model, the First Class planning process followed by our AF Central teams, the school report cards, our principal bonus program and our board evaluation process.

In September 2007, AF made a bold statement about talent by hiring a Chief Talent Officer to oversee all of our people practices. Since then, we have made significant progress in our talent management programs: AF’s Strengths: Talent • Increased the size, quality, and training of our Recruitment Team, resulting in rapid response to challenging middle school placement needs • Created an annual process for an organization wide review of all talent, resulting in more systematic attention to our medium and top performers • Invested in two key teacher leadership roles (Coach and Grade Level Chair), resulting in an increase in teacher perception of support levels (from 69% up to 87% in one year) • Designed a consistent teacher evaluation tool, resulting in almost all AF teachers receiving high quality feedback. The tool was also rated in the top three in the country by The New Teacher Project. • Increased training and support of our network managers, including 360 feedback and workshops in basics of management (most CMOs haven’t invested in home office staff at this level) • Led year two of our Leadership Fellows program, designed to increase our teacher leadership pipeline and resulting in over 75% of new dean hires coming internally • Trained principals on talent management, leading to an increase in movement of low performers and an increase in retention of high performers

AF Leadership Team We have assembled a very strong leadership team, and all of the major positions are now in place

AF’s Strengths: Political Advocacy • Connecticut • Connecticut has the largest achievement gap in the nation • AF is not only the largest charter operator in CT but also the most influential politically – our work was instrumental in: • Increasing charter per pupil funding from $7,250 to $9,300 over the last 4 years • Elimination of the cap on the number of charters in the state • Providing a model for public provision and funding of charter facilities (and securing a $24 million state grant for an Amistad K-8 building) • Bringing TFA to CT and securing meaningful changes to teacher certification statutes • AF is explicitly trying to change the political climate in CT for charters through its own lobbying efforts and in its partnership with ConnCAN, recognized as one of the most effective state advocacy organizations in the country. ConnCAN was founded by AF board members and supporters. • Operating in CT’s three largest cities, success in changing the political dynamic in New Haven, and ongoing active and vocal support of the leadership in Bridgeport and Hartford, AF is making significant headway toward making CT a leader rather than a laggard in the ed reform movement • New York: AF has influenced the climate in NYC through our consistently strong student achievement results and other efforts: • With Uncommon, KIPP and Hunter College, created Teacher U, which currently trains 300 NYC teachers in a Master’s program focused on the practices of our high performing networks. David Steiner, Dean of Hunter Ed School, was recently named NY State Education Commissioner. • 2009 AF-NY lottery was a major political event covered by 3 TV stations and 3 newspapers with more than 3,500 applicants competing for 500 seats. • AF formed a cross-school Parent Leadership Council in 2008-2009 and trained parent leaders to participate in mayoral control hearings and state budget advocacy.

Challenges and Risks • Talent – While AF has made some of our largest investments in the talent area, we still see it as the single greatest obstacle to achieving our growth plan. We will not grow if the right talent is not in place, and, when necessary, we have always made the difficult but essential decision to replace talent when it is not meeting our standards of excellence. However, finding the right talent, particularly in an increasingly competitive market, remains one of our greatest challenges. We are working hard to grow our own talent internally as much as possible and have invested in both teacher and leader pipeline programs. • Maintaining Quality – AF is very concerned that we not fall into the trap that Reed Hastings has elegantly described as “big = crap.” We have seen the strains that size can have on our systems, processes and, perhaps most importantly, our culture, and have endeavored to proactively avoid them and, when we haven’t succeeded, aggressively fix them. • Politics and Public Funding – • Our single biggest political issue is closing the funding gap between charters and traditional public schools in Connecticut. Although we have made headway against this goal, the combination of the poor economy with sustained political opposition means we have not yet achieved our goal – and it is not guaranteed that we will in the next few years. Unless this issue can be solved, Connecticut will not be a sustainable place in which AF can operate. • In NYC, mayor control was recently renewed and Bloomberg seems poised to win a third term, but we recognize that the current favorable climate (and especially the provision of free facilities) could change with new leadership.

Partnering with CSGF • Funding • Direct funding • AF is seeking $4.5 million in funding from CSGF over three years: • 2009-2010: $2.0 million; 2010-2011: $1.5 million; 2011-2012: $1.0 million • Based on existing commitments and the track-record of our other donors, this level of funding would mean that AF Central would require no additional philanthropy to achieve self-sufficiency. • Walton start-up grants: Walton start-up grants had historically been critical to enabling us to achieve our expansion plans. They would eliminate the need for any philanthropy in NY and would get our Hartford schools to self-sufficiency. • Facility funding: We will continue to have facilities projects in the years to come and being able to access dependable, affordable facilities funding would be a huge benefit. • Partnership • Knowledge sharing: AF has always been a significant contributor to (and beneficiary of) the charter movement and educational reform at large, and we would love to participate as an active member of the CSGF portfolio in the sharing of tools, strategies, and lessons learned. • Strategic advice: With increasingly favorable conditions at both the national and state levels, AF will face a number of opportunities over the next 2 years, and we would benefit greatly from strategic advice about how and where to expand (and specifically what to do in partnership with districts and how to approach the opportunity of “turnaround” schools) • “Critical friend” advice: As we embark on the second half of our expansion plan, we need a critical friend to offer feedback on our economic model, operations, and execution. • Connector and facilitator: We want to remain connected to other charter organizations around the country, potentially leading to coordinated efforts in a number of areas, particularly as the federal government appears to be playing an increasingly important role in the charter world.

Discussion

Achievement First – Strategic Overview