GMC Annual Report '08

  2008 Annual Report

Gray Matters Capital Foundation Affordable Private School Initiative

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AN AFFORDABLE PRIVATE SCHOOL STORY

I begin with the story of Kamala, a domestic worker, and Santhaiah, an auto rickshaw driver. Since 1994, I have been witness to their struggles to educate their two beautiful children, Kalpana and Satish.

It was Kamala's job to find a school for their daughter Kalpana. She chose a private English medium school in the neighborhood, one of a small chain of affordable private schools. Santhaiah was keen to take care of his son’s school. As an auto driver he takes several children in the neighborhood to a nearby government school so he decided to register his son Satish there. In this school Satish was expected to read on his own and despite his teacher’s efforts, the system did not work for him at all. After struggling in the government system until 4th grade, Satish was shifted to his sister’s school. In 2000, the family moved to the suburbs. The new local schools were not ideal for this family- they did not offer instruction in English and had poor discipline. The nearby Central government school, free of charge and reported to be one of the best in the city, did not work well for their children. Therefore, the children returned to the affordable private school, requiring the family to leave home at 6 a.m. to reach their school on time, and return home after 7:30 p.m. With tremendous tenacity, the whole family has maintained this schedule for the past 8 years. The school fees amount to approximately 5000 Rs. (US$100) per annum/per child. In 2008, Kalpana completed 10th grade successfully with an 85% pass rate and now she attends a local college. She works steadily and is in many ways an ideal student and daughter. Satish, now in the 9th grade, is a moderate student but the huge reduction in ambiguity has helped him progress tremendously. He is interested in working with his hands. The Affordable Private School that these parents chose is not perfect, but in the long run I have had to admit that there is something worthy of respect here. What we are talking about is exciting for me because it could make a difference to the lives of children like Kalpana and Satish. I am sure that this is the story of most children in urban areas today. ‐ Dr. Lalitha Iyer, Hyderabad, India, GMC Advisor

TABLE OF CONTENTS

Overview 2

Strategy 4

Quality Teaching 5

School Leadership 8

Infrastructure 10

Building Awareness 12

Progress 14

Foundation Staff 15

Partners 16      

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GMC Mission

To research and co-create initiatives with local partners to build sustainable, replicable models for the benefit of

underserved populations.

OVERVIEW

In 2008, Gray Matters Capital Foundation (GMC) declared a new focus: to expand access to quality education for low-income families through enhancing the infrastructure of affordable private schools in India. Our team dedicated much of the year to research, strategy development and staffing.

Under this new education initiative, GMC is working to strengthen the

ecosystem around privately operated schools that are affordable to low-income families or the affordable private school sector. We will provide schools with the tools and resources that allow them to offer quality education in a sustainable manner and establish industry standards. Our goal is to support schools in their

quest to keep learning at the forefront of the business model, as we believe that quality is a key driver of viability and social impact. The ecosystem will consist of a network of stakeholders from school owners/principals, teachers, parents and students working with external partners such as education service providers, donors, investors and regulators.

AFFORDABLE PRIVATE SCHOOL INITIATIVE: BACKGROUND

Many countries are facing severe problems with their government-run education systems due to limited resources and managerial inefficiencies resulting in ineffective learning environments. As a result, privately operated schools for low-income families have been started by educational entrepreneurs. These affordable private schools (APSs) are social enterprises that put an emphasis on quality, efficiency and performance, while charging tuition fees that are affordable to low-income families and allow them to cover their costs and become sustainable enterprises. These schools combine business principles and academic model to provide a sustainable solution to increasing access and quality of education, as well as providing parents with a viable alternative to ineffective government schools.

VALUE OF EDUCATION

Life expectancy rises by as much as 2

years for every 1% increase in

literacy

Studies show that a single year of

primary school increases the wages

people earn later in life by 5 to

15% for boys and even more for

girls

For each additional year of

secondary school, an individual's

wages increase by 15-25%

No country has ever achieved

continuous and rapid growth

without reaching an adult literacy

rate of at least 40%

One year of education increases

individual output by 4-7%

EDUCATION FACTS

An estimated 104 million children

worldwide are not enrolled in

primary school.

In developing countries, more

than 77 million children ages 6 to

12 are out of school.

Over 150 million children in the

developing countries start school but

do not complete five years- the

minimum required for basic literacy.

Of the children in India that do

attend, 50% drop out before

standard five and only 10%

successfully complete standard ten.

In the existing public schools in

India, 25% of teachers do not show

up to work, and only about half of

those who show up actually teach.

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“India has 22% of the world’s population, 46% of the world’s illiterates, and is home to a highest proportion of the world’s out of

school children and youth.”

FOCUS ON INDIA

 While the Indian education sector is in desperate need of reform, recent studies find a wave of change sweeping the nation. A well-known study on the Indian education sector, the ASER Report by Pratham, found that between 2006 and 2007 private school enrollment increased from 18.7% to 19.3%. There are an estimated 73,000 APSs across India of which 10% are located in Hyderabad. In Hyderabad alone, official figures revealed 61% of pupils are in the private unaided sector. The APS sector is booming because parents, who have grown frustrated with a state education system, are choosing to pay approximately $3.50 to $15 per month for better quality education as opposed to sending their children to government schools where teacher absenteeism is at 25%. Poor parents are also choosing private schools because their focus in on English medium and thereby lead to increased opportunities for their children through better job prospects and higher paying positions. The ASER Report discusses the role of English in mobilizing equality through the philosophy of the activist Kancha Ilaiah. He suggests that, “…teaching English would constitute a precondition for gradually reducing the existing system of reservations in educational institutions for the backward castes.” From his research in the Old City of Hyderabad, Professor James Tooley has been leading a global movement to address the growth of privately provided education for the poor and its role in driving quality and achieving the UN’s Millennium Development Goals. His studies report that there are 3,000 APSs in Hyderabad. Over the past nine years, Tooley has been researching these schools and has discovered that 60% of schools in the Old City are private, 23% are officially recognized by the state and 37% are unrecognized and unaided by the government. Most important, he has determined that education quality is better in the APSs when compared to government schools. Leveraging this research and the growing demand from parents, GMC has identified an opportunity to assess and cultivate the burgeoning APS sector and positively impact the educational opportunities for India’s low-income children.   

2008 ACTIVITIES

Commissioned Reconnaissance Study of 42 APS schools

Successful Groundbreaker for 35

School Leaders

Incubation and tender for assessment tool to understand quality & performance

Partnered with M-Cril to develop

APS School Ratings System

Facilitated English Courses at APSs with Pratham

Partnered with Naandi to develop a

year long program to assess students, train teachers, and develop school improvement plans

Launched local newsletter consisting

of interviews parents, students and staff of 13 schools in Hyderabad to raise awareness

Convened first global stakeholder

meeting centered on affordable private schools

Conducted research on other APS

markets - Kenya, Latin America

Partnered with School Ventures to develop multi-stakeholder APS website

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OUR STRATEGY  

GMC set a social impact goal to enhance student achievement in 1,000 schools in

the emerging affordable private school sector in India by 2011 (500,000

children). The foundation will focus on the following key drivers:

Quality Teaching and Learning: Industry performance standards,

simple and sustainable systems to monitor and benchmark quality, and ways

to engage parents and school leaders in assessing student learning.

Management Leadership: Effective school leaders driven by efficiency,

desire to maximize learning outcomes, and share results transparently with

key stakeholders.

Infrastructure Development: A solid industry infrastructure that will

support school growth and leadership and attract partners and resources for

increasing learning outcomes.

Building Awareness: Capitalize on India experience to raise awareness

and build best practices globally.

ECOSYSTEM DEVELOPMENT: LINKING SCHOOLS TO RESOURCES

 Our experience shows that there are few existing organizations focusing on the APS sector, therefore schools receive very limited assistance. We want to strengthen the relationships between the schools, the communities they serve, families and students to ensure that schools have access to tools and resources that allow them to offer quality education in a sustainable manner. Our strategy is built on a partnership and sustainability model that focuses on cultivating these “ecosystem” relationships with key stakeholders in the education sector.   

SWATHI

Student

 “My favorite subjects are English and

Hindi”

“My father is a car driver and my mother is a housewife. I have a younger sister and she is in 4th

standard.”

“When I receive my progress card and score good marks in the class, my

mother cooks biryani. I love biryani!”

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QUALITY TEACHING & LEARNING

SCHOOL RATINGS PROJECT

For all of its potential, there is a dearth of information about the APS sector. Due to the highly competitive environment, schools operate in silos and it is difficult for stakeholders to assess their offering. As a result, the market has no industry standards, comparison is difficult and aggregate industry information is scarce. In order to build transparency in the

sector, GMC has partnered with Micro-Credit Ratings International Limited (M-Cril) to develop a broadly applicable, cost effective, sustainable rating system to assess schools. The rating system will be simple enough to be applied to any school, but effective in terms of accurately representing the school’s offering. Once established, it is hoped that the rating system would become an industry standard so that all APSs would seek a rating, continually strive to earn a top rating and freely share their data for benchmarking purposes. Under a new accreditation system such as this, stakeholders, especially parents, would have a better understanding of each school and the services they provide to drive student achievement.

PRATHAM ENGLISH TRAINING PROJECT

 One of the factors driving the growth of the APS market is that poor parents want their children to speak English in order to have access to better job prospects and higher paying positions. The majority of APS schools are English medium, aligning their offering to parent demand. However, the GMC Reconnaissance Study found that in the APS market, teachers are not strong in English. School correspondents expressed an overwhelming need for English training and identified it as a top priority. As a result, GMC sponsored an English Language Training program in partnership with Pratham, an Indian organization focused on “every child in school and learning well”. The Program aims to enhance English speaking, reading-comprehension and writing skills in 35 schools.

MR. CHAKERBORTHY

School Owner

Mr. Chakerborthy is typical of many school owners. He has been in this business all of his adult life and gradually built a

school with his own savings. Like many other couples in India, his wife is his business partner, and

they both teach.

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Social Enterprise Philosophy

Sustainability is the cornerstone of GMC interventions. Activities will be prioritized according to market demand and will not undermine the market-based models. Over the long

run, it is our vision that school owners will recognize the benefits and adopt these new methods as part of doing business well. Therefore, they will incorporate the costs of the tools

into their expenses without compromising financial viability.

NAANDI SCHOOL IMPROVEMENT PROJECT

GMC partnered with the Naandi Foundation to impact learning outcomes in APSs

through a structured integration of assessment and training. The Naandi School

Improvement Project will apply their whole school development approach to set

student achievement standards through assessment, maximize learning outcomes

through teacher training and foster transparent management practices through the

development and dissemination of the school improvement plans.

Naandi is a not-for-profit organization that provides focused academic support to

children in over 1,000 government primary schools across five states of India.

LEADERSHIP & MANAGEMENT CAPACITY BUIDLING

GROUNDBREAKER & LEADERSHIP CONFERENCES

 To thank schools for participating in GMC’s Reconnaissance Study, GMC hosted a Groundbreaker event in October of 2008. Thirty-five schools attended the event.

Building on the success of the Groundbreaker, GMC organized a School Leadership Conference series with the goal to create a networking forum for school leaders. .

Participation at each event has been increasing and feedback is

positive. Conferences include inspirational speakers, discussions around APS sector issues and opportunities to provide feedback on GMC’s work.

SHAHIDA BEGUM

Parent

“I have four sons and three

daughters and all of them study in

this school…relatives and other

family members also study in this

school.”

“With education we can do anything.

In this generation for girls it is

important especially for monetary

support.”

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The Demonstration Effect:

If we can demonstrate opportunities and results, others will follow and the Ecosystem will grow.

INDUSTRY INFRASTRUCTURE DEVELOPMENT

APS RECONNAISSANCE STUDY- HYDERABAD, INDIA

A Reconnaissance Study was conducted by GMC consultant, Shruti Joshi, and provided a baseline understanding of APSs current offerings in Hyderabad. The research expanded across 42 schools, 26 localities, five federations, approximately 60 parents, 80 students, 30 teachers and 6 industry resources.

The analysis and findings reported that the lack of effective government schools led parents to enroll their children in private schools so affordable private schools have to be acknowledged for their role as engines of growth at bottom of the pyramid. However, affordable private schools are operating under very tough conditions with constraining finances and restrictive government regulations. The support structure for these schools is limited. GMC has a crucial role to play in building up the ecosystem around this sector. The top needs identified were teacher professional development, school performance assessment, increased support from parents and better infrastructure.

APS RESEARCH IN LATIN AMERICA AND AFRICA

 Little is known about APS markets in other parts of the world. GMC commissioned market studies in Latin America and Africa with an eye towards understanding the level of activity and student demand. Consultant Ingrid Faulhaber conducted research on twelve Latin American countries and five (Peru, Dominican Republic, Honduras, Paraguay and Mexico) APS markets were identified. Research also showed that most APSs require financing to more adequately address demand and improve educational quality but are unable to access it as they fall into a financial “no-man’s land” – too large for microfinance institutions, but too small for traditional financial institutions. In May 2008, GMC commissioned consultant Yasmin Musani to conduct research on the APS market in Kenya and the Kenya Independent School Association (KISA). The APS market is very active around Nairobi and KISA is an industry association created to support schools. GMC recognized the important role KISA can play and following the research, assisted in a strategic planning exercise to strengthen its presence.

ZEUGLA

Parent

Zulega is a housewife and works at

home doing Zardosi work on sarees.

She has five children- two daughters

and three sons. Her husband works in

a book binding shop.

“Nowadays it is very important

for girls to be

educated…educated women are

respected in the society.”

“I want all my children to become

computer engineers.”

AFSAL

Student

“My hope is to get into the police force.”

Afsal was formerly enrolled in a

government school before his

parents sent him to an affordable

private school. His mother initiated

the switch because she feared that he

would not learn well in the public

school environment.

“My favorite teacher is Salma, and my

favorite subject is Urdu and math.”

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BUILDING LOCAL & GLOBAL AWARENESS

APS INDUSTRY STAKEHOLDER WEBSITE

 Education organizations, donors and even investors are beginning to take notice of the emerging APS sector and looking for ways to support its development. GMC seeks to build awareness and collaboration around APSs through increasing the level of information available. As a first step towards this goal, we have partnered with School Ventures to build a multi-stakeholder website. School Ventures has been active in the APS sector since 2007 working to expand and make accessible APS market information to school operators and investors. The website, expected to launch in the summer of 2009, will feature a community owned resource library and provide stakeholders with a common platform to discuss industry topics, share projects and view industry-related news and events.  

SCHOOL NEWSLETTER PROJECT

GMC is inspired every day by the stories we hear from our partner schools. We witness first-hand the strength, bravery and compassion that each school owner, principal, teacher, parent and student invests daily to ensure educational opportunities. We realize it is not easy for those living this experience to see the positive impact they have. Committed to bringing visibility to the industry and those who drive this market, we went to the schools, talked to people and compiled the stories we found. What we encountered was more than we

could have hoped for: a goldmine of selfless dedication, life lessons, and, of course, some really sharp kids!    

AYESHA

Student

“My favorite subject is science because it is interesting. I find

Telugu difficult. ”

“I want to become a doctor. I like the check-ups conducted by doctors; even I would like to do

that!”

“If we have knowledge, we can do anything.”

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LEADERSHIP  

FOUNDATION STAFF

Genia Topple Executive Director

Molly McMahon Program Officer

Erika Norwood Communications & Program Associate

Audrey Shoemaker Program Administrator

ECOSYSTEM DEVELOPMENT ADVISORY COMITTEE

Tamo Chattopadhay University of Notre Dame

Kweku Forstall Year Up Atlanta

Leigh Anne Gilbert Smith Richardson Foundation

Dr. Lalitha Iyer Ms Thinksoft Consultants

Steve Hardgrave Gray Ghost Ventures

Bob Pattillo Founder, Gray Matters Capital

SPECIAL THANKS

 We’d like to especially thank our

partners who helped to make 2008 a successful year!

EQFI

Indian School Finance Company

M-Cril

Naandi

Pratham

School Ventures   

Atlanta, GA (U.S.) 2200 Century Pkwy, Suite 100, Atlanta GA 30345 678.365.4700 Hyderabad, India Al-Samad Complex, 1st Floor 3-6-12 and 3-6-13 Himayath Nagar, Hyderabad, India 500029

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PARTNERS

Naandi is one of the largest and fastest growing social sector organizations in India working to make poverty history. Founded in 1998, their work has focused on three broad sectors: Child Rights, Water & Sanitation and Sustainable Livelihoods. Their ideology revolves around building sustainable models within the social sector that deliver critical services efficiently and equitably to underserved communities.

Since inception, the goal of the Pratham team has been to ensure that "every child is in school ….. and is learning well". Pratham has reached out to a million children. Their accelerated learning method has been in use since late 2002 and has taught over 160,000 children since then to become literate.

M-Cril is a Knowledge Process Services Provider that has emerged as the world leader in the rating of microfinance institutions. M-CRIL had undertaken over 422 ratings or assessments covering 246 microfinance institutions in 17 countries of Asia stretching from Russia to the Philippines in South-East Asia.

School Ventures exists to provide better information to help school operators and their domestic and international investors to make smarter investments. The company works to reduce information asymmetries by helping investors understand what makes education markets as destinations for investment.

SPECIAL THANKS 

 We’d like to especially thank our partners who helped to make 

2008 a successful year!   

EQFI  

Indian School Finance Company  

M‐Cril  

Naandi  

Pratham  

School Ventures