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KIPP New Orleans prepares for its own ‘fiscal cliff’ as schools mature

As KIPP New Orleans Schools’ large, one-time grants begin to run out, the finance committee prepared its board for a renewed push in fundraising and a drive to build cash reserves for the future.

“A significant non-recurring revenue phase out in the near term could lead us to our own fiscal cliff,” finance committee member Stephen Rosenthal said.

The committee hopes to avoid this cliff by implementing blended learning techniques involving more computer-based instruction similar to those used by other local charter organizations. The hope is to cut costs by raising class sizes, lowering per pupil expenses, and filling KIPP schools with more students—ideally reaching the point of four classes per grade.

Rosenthal said that federal consolidated grants have shrunk in response to the nation’s economic downturn. Grants such as the Race to the Top from KIPP’s headquarters, Title I, and a federal grant designed to support educational innovation can’t be renewed, leaving the charter organization seeking new funds.

The organization needs to raise at least $5 million in the next three years to ensure a 10 percent continuing surplus moving forward, Rosenthal said. This money would provide the school a cash reserve for a future with new expenses like big-ticket facility repairs.

“We need to start discussing the building of cash reserves. We must act now or go into a deficit without the revenues to support us,” finance committee member Alan Philipson said.

So far the organization has raised $1.6 million this year, about $548,800 short of its yearly goal of $2.1 million. They hope to close some of that gap through the second annual KIPP New Orleans Schools Power to Lead Spring Gala on March 14. This year the event has moved from a luncheon to an evening time at Gallier Hall. They hope for twice the number of attendees—roughly 300 guests.

KIPP’s audit report came back with no major findings. The report will be filed with the state at the end of the month.

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