We decided to move ahead with the advanced guitar class concept. I purchased three additional instruments, and provided the teachers of that class with some basic materials that came out of my own personal guitar studio. (I really like the Yamaha JR2 guitars. They are 3/4 size instruments that keep tune really well. It is perfect for beginners.)
We purposely kept the class small, and we let the kids take the guitars home so they can practice. They seem to really be enjoying the experience. I'm hoping some of them will be inspired to continue learning the instrument beyond what we teach in KWA.