“We’ve scaled back our budget to meet the economic realities, but as we speak, we have every intention of operating next year,” said U.S. District Judge Walter H. Rice, an ISUS trustee. “We were in a tight squeeze I believe we have weathered.”
Founder Ann Higdon said the schools have been hammered by reductions in state and federal funding, and in philanthropic contributions. She acknowledged some donors stopped giving because they feared ISUS was on the verge of collapse. State education department funds make up only half of ISUS’s revenues.
For years, ISUS would buy urban properties, build homes on them largely with student labor, then sell the homes and use the proceeds to purchase more properties. It has built 57 homes through the years. Higdon said that business model isn’t working in today’s tough economy as the working poor who were ISUS’s customers can’t obtain home loans, and three homes remain unsold.
“Our business model was stressed,” Higdon said. “In order to survive, we had to change.”
ISUS, which stands for Improved Solutions for Urban Systems, laid off half its staff in two waves in 2010 and now has about 38 employees, Higdon said. Higdon’s compensation dropped from $182,592 in 2008 to $136,825 in 2009, according to the most recent tax forms submitted by ISUS to the Internal Revenue Service. Higdon said she gave herself a pay cut because “ISUS doesn’t have the resources.” In December 2009, Higdon won the Purpose Prize for social entrepreneurs older than 60 and donated the $50,000 in prize money to ISUS.
ISUS now is offering energy audits and remediation on a fee-for-service basis to generate revenue, she said. The trustees approved letting ISUS lease its unsold homes with the option to buy.
State figures for 2009-2010, the most recent available, show ISUS had a total average daily enrollment of 206 — down from about 300 in years past — in three related charter schools focusing on health care, advanced manufacturing and the original program, construction. Upon graduation, students receive diplomas and professional certifications in their chosen fields. Health care has become ISUS’s most popular program, with an average daily enrollment of 93, as construction jobs have dried up. The construction program had an average enrollment of just 38.
“It’s a very complicated program that’s really more than a charter school” because it encompasses community redevelopment, said Terry Ryan of the pro-charter school, nonprofit Thomas B. Fordham Institute of Dayton. Because of its reliance on grant money and the housing market, ISUS is dependent on factors outside of its control, he said. “The genius of it is its complexity, but it’s also probably their Achilles’ heel.”
ISUS’s financial troubles come against a backdrop of national recognition: Last month, Harvard University’s Kennedy School of Government named ISUS one of its top 25 innovators in government. ISUS also is one of 10 finalists in a Manhattan Institution for Policy Research contest for social entrepreneurism programs.
The schools last week graduated 65 students, the largest class in their history. ISUS accepts students ages 16-22. About 70 percent have been in trouble with the law, Rice said.
Higdon, 71, founded ISUS in 1992 with a $100,000 bank loan she’d obtained. It became a charter school after Ohio enacted a law allowing charters in 1999.
A native of Harlem, Higdon said she decided to focus on helping troubled urban youths who had failed in traditional schools because “I was one of those kids.”
“I was first homeless when a was 4 years old,” she said. “My father was a mean drunk and brutal to us. I can remember being with my mother in the emergency room all night.”
She was a poor student in high school until a teacher wrote on the top of her research paper, “You are profound and eloquent.”
“I kept it until it fell apart,” Higdon said. “I didn’t want her to know I was a D student so I brought my grades up.”
ISUS has succeeded with many students with a mix of positive reinforcement, high standards and a no-nonsense discipline policy.
“The teachers work with you, they push you. There’s no slacking,” said Mark Williams, an ISUS health care student who got a job in patient care at Good Samaritan Hospital and who has his sights set on becoming a physician. “We’re working on our career, not a job.”
ISUS construction student Stanjuan Tillman said the program has turned his life around.
“I was on the wrong track, hanging around with the wrong crowd,” he said. “Seeing other people doing positive things makes you want to be positive, too.”
The ISUS schools’ graduation rates range from 33-40 percent, compared to about 80 percent in the Dayton schools overall. But supporters say ISUS is remarkably successful, considering its students were troubled dropouts.
“These are kids that are one-half step away from being throwaways in our society for whatever reason,” said Steve Naas, president of County Corp, which purchases services from ISUS.
Higdon said, “because we specialize in high school dropout recovery, our goal is to keep you here. The question is, how many can you save, how many can you graduate?”
The state’s annual report cards for schools shows that ISUS earned “continuous improvement” ratings for the health care and manufacturing institutes in 2009-2010, while the construction program was on academic watch. Higdon said the scores for all three schools dropped from the previous year as ISUS began reeling from financial problems.
The Thomas B. Fordham Institute of Dayton said that based on performance, two of the ISUS schools ranked in the top four among 62 traditional and charter schools in the city in 2008-2009, with the third ranking 15th. Those numbers slipped in 2009-2010, with ISUS schools ranking Nos. 7, 16 and 33.
Ultimately, ISUS’s goal is to help its graduates find jobs. A retired parole officer on the staff helps eligible students who are no longer offending to get criminal records expunged or sealed.
ISUS student Rachel Russell, a 20-year-old single mother of a 3-year-old, said she knows ISUS students have a reputation with some people as being failures and juvenile delinquents. “We kind of take it as a challenge” to prove them wrong, she said.
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