Social Impact Stars of the Lone Star State

Lixi Robles Rosa, a seventh grader at an Austin-area middle school, never could have imagined she would excel in math. She had always struggled with the subject, and it impacted her self-esteem.

“I remember that I was really bad at division,” Lixi recounted. “It was really frustrating that I could not pick up the subject.”

Watching this frustration play out at home, Lixi’s mother, Lisseth, explored the idea of changing schools. However, high-cost private schools were not an option. She also wanted her daughter to be in a diverse environment close to home.

Montessori For All-Magnolia Campus in East Austin stood out. Not only was Montessori for All a free public charter school, but it also focused on hands-on learning and giving students independent choice. The multi-age classrooms provide well-rounded teaching through use of physical materials to support textbook lessons, intrinsic motivation, personalized and rigorous instruction, and student-led projects. The administration actively works to increase school equity by targeting students from a mixture of socioeconomic and ethnic backgrounds.

Lisseth was also drawn to the philosophy of founder and Executive Director Sara Cotner. Sara felt that traditional schooling was missing the target for children who were either ahead or falling behind and consequently were frustrated because they needed more stimulation or targeted help.

As a result of this approach, the 12-year-old, who started attending Montessori at age nine, says she now gets good grades in math.

“They presented material in a different way, and it was really cool because you get to see the little cups,” Lixi says. “Now, I can do really long division on paper.”

But subject matter experience was not the only thing that Lixi struggled with. Before attending Montessori, she wrestled with self-esteem issues because of her short stature. Her classmates all seemed taller than her. That affected her confidence, something that further impacted her ability to learn her coursework.

Again, Montessori proved to be the right place for Lixi. The school takes a holistic approach to education; it strives to push children not only to meet their intellectual potential, but their social, creative, and physical potential, so that they may pursue lives of meaning and joy. It was a game-changer for Lixi. She learned to embrace her appearance, and it has helped her grow confident both in and out of the classroom.

Transformations like this are made possible through the visionary work of Montessori’s leadership team.

One of the questions Cotner asks herself is: “How do we begin to prepare children for a future that we can only begin to imagine?”

“Because school looks very much like a factory with everybody (doing) the same thing, same time, same way,” Sara says.

She began sitting in at various elite schools to learn about different approaches until she walked into a Montessori school and knew her life had changed instantly.

“Instead of looking like a factory, it looked like a Google workplace,” she says. “They were self-directing activities, there were goals, they were taking care of animals, they were helping themselves to snacks when they were hungry and cleaning up. You could see how practicing those social and emotional skills would prepare them for college, for the 21^st century workplace, and to be leaders out in the world.”

Cotner also tapped into her critical consciousness.

“As a white teacher teaching primarily children of color, I was asking myself questions like: What does it mean that I’m working within a system that’s overemphasizing obedience and compliance and following directions—those are not skills that we want children of color to be learning in a school,” Sara says.

She championed a vision of what a diverse school could look like when it implements the best from high-performing private and public schools with a mission of achieving equitable academic outcomes for all students. This included ensuring that Magnolia Montessori operated without tuition costs, making it the only public Montessori school in Austin that did not charge hefty tuition fees.

Not only is the approach innovative, it is necessary to tackle the educational segregation that plagues the city of Austin, as lower-income and diverse communities continue to live mostly separated from white and affluent neighborhoods, often resulting in less investment in lower-income communities.

“If we want to change the future, we have to change the way school is done,” says Sarah Kirby Tepera, Chief Operating Officer, at Montessori.

It is no surprise then that the school launched in 2014 with 300 children in pre-kindergarten through third grade, adding a new grade level each school year until maxing out at sixth grade. The school now houses up to 500 children and consistently maintains a waitlist of more than 500 families.

The demographic makeup is considerably diverse with 42 percent White, 41 percent Hispanic, 12 percent Black, and four percent Asian students. Half of the school’s families qualify for free or reduced-price lunch.

The approach has paid off. According to its 2018 Student Culture & Climate Report, the school exceeded its peers in rigorous expectations, school safety, sense of belonging, cultural and linguistic competence, relationships with teachers, engagement, and learning strategies. The school also earned the highest rating in preparing students for a post-secondary education and the third-highest rating for student achievement and performance gap closures.

“As a white teacher teaching primarily children of color, I was asking myself questions like: What does it mean that I’m working within a system that’s overemphasizing obedience and compliance and following directions —those are not skills that we want children of color to be learning in a school.”

Sara Cotner, Founder & Executive Director, Montessori For All

Students like Lixi do not need to see a report’s results to know Magnolia’s philosophy works. Even after aging out of the school, she jumps on any opportunity to accompany her mother to pick up her younger siblings and chat with her former teachers, or guides, as they are called.

“She became more social with other kids, she matured, she became more focused on everything,” says her mother Lisseth. “It was a quick advance. I’m just so enchanted with the school.”

This growth didn’t come without its own challenges. When the school launched on its nine-acre plot of land in East Austin, it was operating out of leased portable buildings. However, they needed a facility to match the ambitions of the school’s education model. This required a lender who believed in its approach and in the young school’s potential. But given that it was the first of its kind in many ways for the region, that was a tough task—until they began speaking to Capital Impact Partners.

“As a mission-driven lender who has financed charter schools across the country, we quickly saw the potential in the Montessori For All team to deliver a high-quality, free-education alternative to families where such options are limited,” said Will Robison, Capital Impact’s Manager of National Education, who is based in Austin. “For many low-income parents, the ability to send their children to quality schools outside of the public school system is often unattainable, especially a Montessori school. We wanted to change that here in Austin.”

Capital Impact also supported Magnolia Montessori’s “diverse by design” approach. This movement fosters intentional inclusiveness among racial and socioeconomic backgrounds so that all students have equal access to opportunities.

“When schools cultivate a welcoming atmosphere for students from a diverse array of socioeconomic, cultural, and ethnic backgrounds—and focus on social and academic skills alike—it benefits all students, the privileged and the under-privileged. For children who may have previously been at a disadvantage, being educated in a diverse environment can really level the playing field. And their more privileged peers get to learn about, and alongside, other cultures that they would otherwise not interact much with due to the lack of diversity in most public schools,” said Robison.

Capital Impact has financed other charter schools that are successfully implementing this model, including High Tech High in California, E.L. Haynes Public Charter School and Lee Montessori Public Charter School in Washington, D.C.

In this case, Capital Impact helped Magnolia Montessori build a new permanent home through an $8.4 million construction loan and a $5.0 million allocation as part of a New Markets Tax Credit transaction —a vital program through the U.S. Treasury’s Community Development Financial Institutions Fund that brings much needed, low-interest capital from the private sector to finance projects in low-income communities.

Today, when visitors walk into classrooms, they immediately notice drastic differences in the aesthetics and ambience of the school compared to traditional educational institutions. The residential buildings serve as a second family to students: they include porches and backyards and lack long, internal corridors. They also provide space for lunch to be held in the classroom. There are calming interiors, natural light, and natural materials such as wood, glass, and stone.

“Our curriculum and building design both work together to emulate our philosophy that’s very focused on building freedom with responsibility. It’s focused on independence, collaboration, problem solving, empathy, and so a lot of families are very attracted to that kind of educational model,” Cotner says.

And others are taking notice. The school’s design and curriculum has inspired the Austin and San Antonio public school systems to launch their own diverse, public Montessori programs.

Expanding Affordable Housing & Inclusion through Cooperation

In addition to supporting projects that equalize education, Capital Impact’s wide range of focus areas includes scaling affordable housing and housing cooperatives. Housing is the one of the most important determinants for wealth building and fostering healthy communities. With housing costs at record highs, affordable housing for low-income communities is critical to providing a path to success for underserved communities.

Austin is an illustrative example of this trend. The housing boom has pushed lower-income area residents further out of the city in order to afford housing. While lower-cost options exist in suburban cities just outside of Austin, the city’s weak transportation infrastructure makes it challenging for residents to commute back and forth into the city. This creates hardship for students, young professionals, families, laborers, and seniors in accessing school, work, and social services.

One local organization, NASCO Properties, Inc., offers an innovative solution to this dilemma through an alternative to the traditional cooperative model. Most co-ops are set up so that their members are also owners, helping to control day-to-day operations and ultimately share in profits. NASCO’s approach is to engage residents to help manage the property in exchange for stable and affordable rents.

Hannah Frankel, a social worker with eight years of experience in helping local residents cope with domestic violence, sexual assault, and mental illness, is a big advocate of this approach. While attending the University of Texas at Austin, she first experienced the benefits of living in a housing co-op.

“Even as an undergrad I thought: Wow, this is a great model. There’s nobody making money off me. It’s kind of amazing that I could just be housed somewhere where I not only have governance rights but can also feel like I’m contributing meaningfully to both making this place better and having a true community with my neighbors,” Hannah says.

After leaving the university, she moved into the south Austin-based Sasona cooperative. Owned by NASCO, this housing complex was the only one of its kind open to non-college residents. While she enjoyed her time at Sasona, Hannah saw the importance of increasing options like this in the region.

“A lot of the people in student co-ops wanted to live in co-op housing again but didn’t want to live in West Campus and didn’t want to live a student lifestyle,” Hannah explains.

Residents of the 20-unit apartment La Reunion housing co-op complex, which includes some shared spaces, range from age 18 to those in their 60s. The resident mix ranges from young professionals to single families to seniors.

Hannah joined up with others and eventually founded a new housing cooperative they called La Reunion. The name was specially chosen as a reference to a settlement of the same name that existed near Dallas in the late 1800s. It is a connection to cooperative history in Texas as well as a word that connotes community, unity, and a return to the cooperative growth of the 70s.

Once again, NASCO took the lead in acquiring the property and working with residents on a cooperative management system.

“We made a real community out of it,” she says. “It is the time spent together that has made us a real community and makes us work. We do everything. From the early days, we were letting tenants know they could stay here as a co-op member, you can move on, and we can give you a certain amount of moving assistance. We had barbecues as info sessions. We have done a lot more art-based events like open mics, poetry, and fiction readings. We have bands here.”

That work has paid off. Residents of the 20-unit apartment complex, which includes some shared spaces, range from age 18 to those in their 60s. The resident mix ranges from young professionals to single families to seniors.

“La Reunion is not only one of the most diverse places I’ve ever lived in, but it’s one of the most inclusive locations I’ve ever seen, period.”

Hannah Frankel, La Renuion Housing Cooperative Resident

Affordability is a big reason for this broad range of residents. The rental rate is 60 to 70 percent of the market rate, helping to keep it cost-friendly for the residents, all of whom earn 80 percent of the Area Median Income or below. As part of their rental agreement, rent cannot exceed 30 percent of their income, and year-over-year rate changes must remain lower than three percent.

Ensuring long-term affordability and stability for its residents, however, required NASCO to restructure the loans it had originally taken out to purchase the property. Because the organization’s cash flow is determined by the ability of residents to pay rents, many lenders deem that too risky. However, Capital Impact took notice.

“While we look at a number of factors when making loans, the first question we ask ourselves is what kind of social impact can we create,” said Diane Borradaile, Chief Lending Officer for Capital Impact. “When we saw NASCO’s commitment to providing affordable housing options in Austin through Sasona and La Reunion, we knew we wanted to support that effort.”

Capital Impact provided NASCO with a $2.2 million loan to help refinance their existing debt with a lower interest rate. This provided NASCO with a longer-term, stable repayment structure that further supported their cooperative housing mission. This was made possible through the U.S. Treasury Department’s CDFI Fund Bond Guarantee program, which allows the loan to mature over 25 years instead of the standard 10 years.

But affordability was not the only reason Capital Impact decided to work with NASCO.

“NASCO’s properties are committed to fostering inclusiveness and diversity across race, gender, and sexual identity,” noted Borradaile. “These principles are such a big part of our own organization’s culture and mission. We were really impressed by the broad spectrum of residents who make their homes in NASCO communities. It meant a lot to us.”

“La Reunion is not only one of the most diverse places I’ve ever lived in,” Hannah notes, “But it’s one of the most inclusive locations I’ve ever seen, period.”

Her neighbors agree.

“Historically, co-ops have still not done a hugely impressive job of reaching out to nonwhite and marginalized communities, but I think that’s improving all the time,” says Barak Bullock, who has lived in La Reunion for over a year.

“Racially, we’re one of the more diverse co-ops that I’ve seen in Austin,” said Gatlin Johnson, another co-founder and longtime resident at La Reunion. He said La Reunion is committed to meeting the needs of its diverse community.

The fulfillment that residents feel is priceless.

“As a mental health practitioner, I see my clients’ lack of connection and community as one of the biggest contributors to depression and anxiety,” Hannah adds. “So, I find myself thankful all the time that when I see people every day, I feel connected to them. I get a lot of joy out of making things better for other people as well as for me, and I make it better with other people as well.”

It’s a common sentiment for La Reunion residents.

“There aren’t many co-ops that have this apartment-style structure. Most co-ops that I’ve seen or lived in are essentially one big house where everyone lives together,” says Bullock.

In theory, residents can keep to themselves, but the co-op atmosphere embraces camaraderie.

“The other night we had a fire pit with hot chocolate and s’mores, and we all sat around the fire and it was super fun,” Barak says. “There are also opportunities for socializing that are more driven by improvement of the co-op structure. There are days that everyone agrees to do a set number of hours of labor to either clean the common spaces or do renovation and improvement of one the rooms, paint some walls, or completely revitalize the structure.”

“We have group work parties. We have a labor holiday about twice a year. Recently, a bunch of us got together and painted the upper story of the courtyard,” added Hannah. “We painted the lower story a few months ago and now have a great new exterior paint job. We’re working on the outside of the building next. Things get better because we’re together.”

“I prefer to live in a situation where decisions are made democratically,” Barak says. “And co-ops are the only form of living that I know of that functions like that, at least in the U.S.”

Ensuring that diverse communities stay healthy

Capital Impact takes a holistic approach in its mission to ensure equitable access to a wide variety of critical services necessary for communities to break the barriers to success.

This includes projects partnering with community health centers and clinics to ensure that they have the resources that they need to serve communities throughout Texas, especially those that typically have limited access to high-quality health care.

One such example includes North Texas Area Community Health Centers (NTACHC) Northside location, which is the only Federally Qualified Health Center serving a predominantly young, Latino, low-income, uninsured and underinsured population in Tarrant County. When the organization needed a new facility to adequately serve its clients, Capital Impact was able to provide a $10 million loan as part of a $15 million New Markets Tax Credit transaction.

This financing enabled the construction of a new two-story, 33,000 sq. ft. health center in Ft. Worth, TX. This created the ability for the health clinic to serve 24,000 patients­—66 percent of whom are considered low-income—with a full range of family-oriented, comprehensive primary and preventive services, including family medicine, pediatrics, OBGYN, family planning services, prenatal care, behavioral care services (depression and anxiety counseling), health education, and disease prevention services.

The new site includes 36 exam rooms, six dental operating rooms, a pharmacy, lobby / waiting areas, care coordination areas, and offices / meeting spaces. In addition, the health center created 125 construction jobs and 40-45 full-time jobs.

“Nothing gives us more joy than seeing a new facility like this open,” said Robison. “Not only do we see the social impact first hand, but there is an intangible benefit when residents realize that there are those who care about them and want to support their ability to live vibrant, healthy lives. This is what makes my job so fulfilling.”