Education nonprofit New Schools is shutting down

Financial problems are forcing the closure of NC New Schools/Breakthrough Learning, a champion of specialty and early-college high schools, the nonprofit announced Thursday.

The organization had expanded rapidly, said Jeffrey Corbett, president of its board of directors, and the expansion outpaced its funding.

“We ran into cash flow problems that were directly related to growth and the speed of growth,” Corbett said. “It was very, very unfortunate.”

The North Carolina New Schools Project started 13 years ago with a five-year, $11 million grant from the Bill and Melinda Gates Foundation to restructure secondary education by creating smaller high schools. The Gates Foundation funding for restructured high schools ended, but New Schools continued its work with funds from a variety of sources, including federal and private foundation grants and some state money.

The organization broadened its scope to support early-college high schools, regional specialty high schools and STEM (science, technology, engineering and mathematics) schools, and to coach teachers and administrators.

Early-college high schools target first-generation college goers and offer students the chance to graduate with up to two years of college credit or an associate’s degree. Those schools are standouts for their high graduation rates.

New Schools “did an incredible job and was doing an incredible job transforming public education,” Corbett said.

Last year, New Schools added Breakthrough Learning to its name and began working in South Carolina, Mississippi, Illinois and Indiana.

Tony Habit, New Schools president since its inception, resigned Wednesday. Efforts to reach him were unsuccessful.

The abrupt closure surprised many.

“I was absolutely shocked,” said Howard Lee, a former state senator and State Board of Education chairman. “I think the New Schools Project had a tremendous positive impact on public schools.”

Lee said he was rewriting a speech he planned to give Friday that references New Schools. Lee wants his own foundation to mimic some of the organization’s work, and he is concerned that New Schools’ ongoing projects will wither without its support.

Corbett said the board shares the sense of regret others in the community have expressed, and the organization will look for other money sources to continue its work.

“It’s too important a body of work to just stop,” he said.

The organization had 70 full-time and two part-time employees. A handful will continue to ensure an orderly shutdown, Corbett said.

In late 2014, the organization announced it had won a $20 million federal grant to expand early colleges to rural areas.

Corbett said federal money can’t be drawn until services are delivered, a situation that contributed to the cash flow problem. The organization will be working with other donors if they are owed money, he said.

Corbett said the board “saw a problem emerging” at the beginning of the year and tried to raise more money.

“We could not see a path forward for the organization,” he said.

The board decided Wednesday to shut it down.

Lynn Bonner: 919-829-4821, @Lynn_Bonner