The federal No Child Left Behind (NCLB) Act of 2001 is designed to increase accountability and raise the educational standards of public schools throughout the nation. The law sets deadlines for states to expand the scope and frequency of student testing, revamp their accountability systems and guarantee that all teachers are qualified in their subject areas. NCLB requires states to make demonstrable annual progress in raising the percentage of students proficient in reading and math, and in narrowing the test-score gap between advantaged and disadvantaged students. The law also increases funding in several areas, including K-3 reading programs and before- and after-school programs, and allows states greater flexibility in their use of federal funds. It is considered a landmark piece of federal education legislation in its policy and funding provisions and in the pressure it applies in moving states forward in improve student achievement.

New Markets Tax Credits

New Markets Tax Credits are a component of the federal New Markets and Community Renewal initiative adopted in 2000 with the goal of revitalizing impoverished communities by encouraging private sector equity investment in underserved communities. The credits are designed to spur $15 billion in equity investment for business growth in low- and moderate-income rural and urban communities throughout the United States and Puerto Rico. The credit, worth over 30 percent of the amount invested (in present value terms), will be available to taxpayers who invest in a wide range of privately managed community development investment funds, such as community development banks and other CDFIs, venture funds, and new investment companies, that finance businesses in low- and moderate-income communities.

The Community Reinvestment Act

Intended to encourage financial institutions to help meet the credit needs of all residents of the communities in which they operate, the Community Reinvestment Act (CRA)is a major force in ensuring fair and equitable access to financial services. Charter schools, because of their direct service to underserved populations and communities, and, in many cases, because of their locations within those communities, are often excellent CRA-eligible initiatives. By reducing the risk of loans made to charter schools, lenders can take advantage of these excellent opportunities to invest in underserved communities and fulfill their obligations under CRA regulations.