1. I NVESTING FOR S CALE AND I MPACT : C HARTER M ANAGEMENT O RGANIZATIONS (CMO S ) NewSchools Venture Fund June 18, 2010

2. 2 NewSchools Mission: Transforming Public Education To transform public education through powerful ideas and passionate entrepreneurs so that all children – especially those in underserved communities – have the opportunity to succeed in the 21st century. Identify the most promising education entrepreneurs Use engaged venture philanthropy to help build early-stage, education organizations into scalable, sustainable, high-impact ventures Develop networks of thought leaders across the business, education, nonprofit, and policy communities in order to help our ventures succeed and create leverage for broader systemic change Theory of Change NewSchools Venture Fund 2010

3. 3 A Value-Added Investor 3 $ Portfolio Organizations NewSchools Individual Donors Foundations $$ $ Social Returns $ Government

4. 4 NewSchools Venture Fund 2010 NewSchools Disbursements to CMOs

5. 5 NewSchools Venture Fund 2010 Scale of NewSchools CMO Portfolio Number of Schools Number of Students At almost 71,000 students, NewSchools CMO portfolio would be the 50 th largest school district in the U.S.

6. Proficiency of Low-Income Students Schools 3 years or older, compared to host districts 6 K-8HS AVERAGE: +17 76% (c) NewSchools Venture Fund 2010 34% of schools are 20 percentage points higher than their host districts in both reading and math Reading Math

7. 20/20 Honor Roll in Reading and Math Schools 3 years or older, compared to host districts 7 (c) NewSchools Venture Fund 2010 Across the portfolio, the low-income students in 36 schools outperformed district counterparts in both reading and math by 20 percentage points. CMONumber of Schools Achievement First8 Aspire7 Uncommon6 Mastery4 Noble3 KIPP DC2 Alliance2 DC Prep1 PUC1 Success Charter Network1 Leadership Public Schools1 Total36

8. 8 NewSchools Venture Fund 2010 Relative Scale of NewSchools Investment Investment Today= $1,000/Seat ($70.7M/71,000 Seats) Investment at Scale= $470/Seat ($70.7M/153,000 Seats) Annual Spending: Boston Public Schools vs. NewSchools

9. Barriers to Greater Private Investment 9 CMO Profiles for offsite Large-Scale Need Early–Stage Risk Political Risk Inadequate Data Unclear Theories of Change Venture Philanthropy and Creative Financing (e.g., PRIs) Specialized Intermediaries Investment in Organizing & Advocacy Investment in Data Systems, Research & Evaluation Next Slide

10. 10 NewSchools Venture Fund 2010 Alternative Theories of Change Replicable Models Collaborative Supply Critical Mass Market Leadership District Adoption Public-Private Partnership Tipping Point Creative Destruction Larger Scale