CharterFolk Contributor Raj Thakkar – Demystifying the Components of Responsible Financial Management

Good day, CharterFolk.

Today we are pleased to present a Contributor Column from Raj Thakkar, Founder & CEO of Charter School Business Management.

We provide a bio for Raj below.

Raj Thakkar is the Founder & CEO of Charter School Business Management (CSBM) as well as FOREsight Financial Services for Good. Widely regarded as an expert on nonprofit and charter school finance, Raj has presented countless financial best practices workshops across the country. He is the author of fiscally seCURE: prepare, protect & propel your CHARTER SCHOOL with responsible financial management.

Raj previously served as the Chief Financial Officer of Explore Charter School in Brooklyn, NY. He was named New York State’s Small Business Person of the Year by the U.S. Small Business Administration. CSBM/FOREsight was named Small Business of the Year for the Eastern Region of the United States by the U.S. Chamber of Commerce multiple times. As a Minority Business Enterprise and Benefit Corporation, CSBM/FOREsight was awarded Best for the World by B Lab as well as one of the Best Places to Work by Crain’s NY Business.

Raj has taught Understanding Social Enterprise: How to Use Business as a Force for Good as an adjunct professor at New York University’s Wagner School of Public Service. He is the board treasurer of multiple nonprofits, a member of YPO, a Pahara Institute Fellow, a member of the Joyful Impact Accelerator, and a graduate of the Goldman Sachs 10,000 Small Businesses program. He has an MBA in Finance from NYU Stern and a BS in Engineering Science from Hofstra University. Raj is a native New Yorker who lives in Manhattan with his wife and daughter.

Demystifying the Components of Responsible Financial Management

Financial education is severely insufficient in the U.S. and perhaps worldwide. Why is this the case? Is it because reading, writing, and arithmetic are simply the higher priority? Or is it because people are unaware of the loss of economic value that poor financial education imposes on the world economy? Wouldn’t individuals and organizations empowered with significantly more financial knowledge strengthen the world economy several-fold?

A lack of financial education has negatively impacted charter schools since the beginning of our movement. The #1 reason why charter schools are shutdown has been and consistently remains finance/mismanagement. What is your relationship with financial management?

Do you feel uncomfortable where you’d rather have someone better equipped manage finances? Are you knowledgeable where you have financial management intelligence, but your execution is either lacking or not needed due to your role? Do you feel productive where you can execute deliverables but don’t fully understand the reasons why? Or do you feel fiscally seCURE where you can execute, know the reasons why, share your knowledge in easy-to-understand ways, and adapt as needed?

For the past 18 years, Charter School Business Management (CSBM) has been working to eradicate financial mismanagement and has now created a resource that can be leveraged by all stakeholders in our sector. Our book, fiscally seCURE: prepare, protect & propel your CHARTER SCHOOL with responsible financial management

… was published in October 2023 and is gaining traction as the resource for school/network leaders, board members, finance/operations professionals, authorizers, auditors, lenders, funders, and other stakeholders. It presents 10 CUREs for the 10 common causes of financial mismanagement. Going a layer deeper, it also provides 5 Remedies per CURE for a total of 50 Remedies for the common symptoms of financial mismanagement.

The book lays out what it looks like when you are managing your finances responsibly and the polar opposite where finances have been completely fouled up. Readers can decide where on the spectrum they stand and can learn how to move closer to the ideal.

Each of the CUREs chapters is organized in the same way, starting out with a cautionary tale from the fictitious “Well-Intended Charter School” on a journey toward becoming the “Well-Informed Charter School.” Then the corresponding cause of financial mismanagement is described, followed by a section called “Flawed, Fraud & the Fuzzy-In-Between,” which puts forth 5 tricky scenarios asking “what would you do if you were in this position?” Then each “Symptom, Remedy & Steps to seCURE” are elaborated upon, showing the reader the steps to take to implement proven financial practices and to avoid financial mismanagement.

The conclusion includes a Fiscal Practices Assessment (FPA), which turns every CURE and Remedy into the form of a question, where readers can decide if each of the 60 proven practices should be implemented from scratch, overhauled, tweaked, or if it has been mastered it to the point it can be taught in layperson’s terms. Think of the results of your assessment as the “diet and exercise” or the personalized prescription to get your school’s or network’s finances back on track or validation if your finances are already on track.

The book may be read cover to cover or used as a reference guide. If time is of the essence, then read the table of contents that lists out every single CURE and Remedy. You can also cut to the chase and go right to the Fiscal Practices Assessment in the Conclusion.

Here’s a relevant excerpt from the book since the deadline to use ESSER funds is approaching on September 30, 2024:

CSBM was launched on March 28, 2006, which makes today our 18-year anniversary. A week ago on March 21st, we hosted our book launch event in New York City …

… where many CharterFolk gathered.

We truly believe our book will strengthen the charter sector by helping stakeholders understand the components of responsible financial management and a by helping create a game plan for getting your finances back on track.

CharterFolk, we hope from our hearts that you take the time to read the book and implement the lessons shared. Let’s put an end to the heartbreak of poor fiscal management tripping up charter schools that have the potential to have great success with students.  It’s an aspiration that is within our potential to achieve.  We’ve just got to allow charter school leaders to seCURE the additional support they need to adopt the best financial practices that students deserve and that reflect well on the entire charter school movement.