If you’re a parent whose child attends Jerabek Elementary, a public school in Scripps Ranch, you’ll be asked to donate $1,000 every year to the school’s nonprofit foundation to help pay for librarians, nurses and staff to help supervise your kid at lunchtime.

If your child goes to Bird Rock Elementary, a public school in an affluent La Jolla neighborhood, you’re asked to give money to keep class sizes small. All students at Bird Rock have the potential to succeed, the school’s foundation website says, but “it requires a special investment to help that potential flourish.”

Every year, pleas for donations like these go out across San Diego Unified schools. The message is simple: Parents need to give money to pay for teachers and programs that the school district otherwise won’t provide. And every year, parents respond by funneling hundreds of thousands of dollars into public schools by way of these nonprofits.

Splash_for_cash_birdrock

But all this money comes with little oversight. San Diego Unified has broken promises to monitor how school foundations fund-raise and spend their cash.

That raises a problem: Taxpayers are on the hook if foundations don’t raise the money they say they’ll have to pay for extra staff. District officials say they don’t know if that’s happened.


We Stand Up for You. Will You Stand Up for Us?

The lack of oversight also conflicts with a central concern of Superintendent Cindy Marten, who’s made it her primary goal to eliminate inequity in district schools. She says that foundations, which provide only certain schools extra services and staff, can make it more difficult to achieve equity.

District officials’ failure to ensure foundations are making good on their promises means the district could be subsidizing a system its own superintendent believes could complicate the problem she’s trying to solve.

How Foundations Work

School foundations in San Diego have evolved from PTA bake sales and other homey ways to make a buck. These days, they’re legally registered nonprofits that can rake in the dough.

Bird Rock’s foundation brought in more than $330,000 in 2012. Jerabek’s got $74,000. They pay for teachers’ salaries, music and art programs and substitute teachers to relieve full-time staff so they can take time for training.

Any parents who are willing to do the legwork can start a foundation. They need to register with the state attorney general, who’s the ultimate authority on public charities. They also need to file for a nonprofit status with the IRS.

Foundations are expected to keep neat books, and school principals are supposed to verify a foundation’s nonprofit status before the group begins raising funds for the school. But some principals don’t bother.

In 2012, the county Grand Jury found that a group of parents who weren’t even part of a registered nonprofit collected donations on behalf of a San Diego Unified school. Then-Superintendent Bill Kowba blamed principals, but said the district didn’t have the time or resources to routinely audit these nonprofit groups.

Moises Aguirre, a district spokesman, said there’s no written policy for foundations that want to hire staff. This year, 33 staff members in the district have their salaries wholly or in part paid for by foundations, he said.

But Aguirre doesn’t know how much money the foundations raise each year. He doesn’t know how many foundations exist. And he doesn’t know whether the district is footing the bill for foundations that don’t meet their fundraising goals.

The groups don’t have to pay upfront for the teachers and staff members they hire for the school. Instead, they write a kind of promissory note, agreeing to pay when the bill comes due at the end of the year.

That means the risk for foundations not hitting their fundraising goals falls on the district. If the money doesn’t come in, taxpayers have to make up the difference.

Aguirre said he’s unaware of any foundation sticking the district with a bill in the recent past. But he can’t say for sure because the district doesn’t track foundation spending.

Based on the district’s own rules, Aguirre should be able to know the answer.

The District’s Broken Promises

For a long time, the district has had the ability to investigate school fundraising groups. District rules allow school officials to request financial statements from foundations and audit their books whenever they want. The district, though, doesn’t do it.

In 2009, district leaders wanted to go even further. They believed the district needed to get a handle on a burgeoning crop of school foundations because of their potential to create a financial liability on the district.

“We’re painting ourselves into a corner if we say let’s keep doing it, because it isn’t working the way it is,” then-trustee John de Beck said at a school board meeting.

The school board voted to set up a panel of parents, community leaders and district officers who would create a comprehensive policy to deal with foundations.

That never happened. Aguirre said he didn’t know why the panel disbanded or exactly when. He said it stopped meeting sometime before Marten became superintendent without writing a policy.

Marten told VOSD that foundations have been “tossed around like a hot potato in the district.”

“Apparently nobody’s dealt with it long enough to find a solution,” Marten said.

Marten’s made it one of the district’s primary missions to narrow the achievement gap and provide equitable education across neighborhoods. But foundations provide services only to the certain schools that have them, and much of the money goes to schools in the district’s wealthier neighborhoods.

Foundation supporters, however, say that these nonprofit groups are essential at schools in more affluent areas, which don’t qualify for the federal Title 1 funds. Those dollars are earmarked for low-income students, but face restrictions on where they can be spent.

The fact the foundation system has flourished, Marten said, means that parents fear their children aren’t getting what they need. It’s her and the school board’s job to help change that, she said.

Marten said the community should discuss the role foundations ought to play in public education.

“How much money do foundations give the district altogether? What would happen if there were no more foundations? I think we need to know the answer to these questions,” she said.

Still, the district has no immediate plans to take advantage of its existing rules on foundation fundraising or develop new ones.

    This article relates to: Education, News, School Finances, School Foundations, School Leadership, School Performance, Share

    Written by Mario Koran

    Mario asks questions and writes stories about San Diego schools. Reach him directly at 619.325.0531, or by email: mario@vosd.org.

    13 comments
    Sally Smith
    Sally Smith subscriber

    On Oct. 4, 2010, the IRS Customer Education Outreach presented a program for all officers of SDUSD parent fundraising groups at the Ed Center. The IRS agent stayed  long after the program ended to answer questions for people who had brought their group's paperwork. They were clearly overwhelmed and seeking out help to comply with IRS laws. SDUSD has several versions of Booster Manuals which are in the "being reviewed" status now for years. These manuals - which other districts provide to their fundraising groups -  would help new officers comply with state charity laws and federal laws and understand the legal implications of soliciting money from the community.

    Andrea Niehaus, the Director of Auditing, posted an online training.  These tools are much needed because new officers are elected every year and don't have the resources to navigate the SDUSD policies and laws. When groups are soliciting money from local businesses and the public, there must be transparency and accountability.State and federal laws protect the public from unscrupulous groups/individuals taking money under the guise of "donations."   In SDUSD,  groups use the name of the School District and the school site gaining  "instant" legitimacy  and trust of the public.  The public would not donate to just any organization putting a hand out for door prizes, gift certificates, food, and money  but eagerly do so to school groups based on trust that the school district has approved legitimate groups.


    The PTA has excellent rules regarding fundraising. This venerable organization recognizes that fundraising must not overwhelm parents and run constantly, that the goals of the fundraiser must be clearly explained, that officers must follow rules to protect the funds  such as 2 people must count money, - rules created from years and years of experience and trying to prevent problems such as embezzlement and fraud.  Many schools didn't like following those rules and began forming groups that don't have such rules, exposing parents to personal liability  for loss of charitable funds.  In one case, a parent group was sued  over a contract for the school copier machine and incurred an $8,000 judgment. The parents ignored a court summons thinking the San Diego Unified School District was going to handle the court case, which it did not and a default judgment was entered against the group.  PTA  does require a payment to its national organization which is insurance to protect local groups. That payment buys security, instant advice and help and other important safeguards. It is worth every penny  even if nothing ever happens as the group conducts its business.

    For the Kids
    For the Kids subscriber

    This is erroneous information about the copier issue at one school. The parents did not "ignore" the court summons, it came to the school during the summer when no one was there to receive the mail. Once it was physically received by a foundation board member, it was addressed, and the foundation was TOLD that the SDUSD legal department would handle it, which they did not.

    Sally Smith
    Sally Smith subscriber

    @For the Kids

    Your experience of failing to receive a court summons illustrates a major problem in SDUSD's failure to provide  guidelines to fundraising groups. 501(c)(3)s   should not use the school's address. Per FCMAT:
    Is it allowable for booster clubs and non-profit corporations connected with the high school to use their mailing address? Question: Should booster clubs and non-profit corporations that support programs on a high school campus use the mailing address of the high school as their only mailing address and/or business operation address? Response: Booster clubs, foundations, auxiliary organizations and parent/teacher associations (PTAs) may raise funds and donate these funds to the district or purchase items with their funds for donation or assistance to the district, but they are not legally considered a part of the district and are not included in the annual audit. Some organizations, such as the PTA, are established as non-profit corporations with a separate tax-exempt status. However, many booster organizations have not applied for or received non-profit status and do not have their own tax identification number, so it should not be assumed that they are all official groups in the eyes of the Internal Revenue Service (IRS). Booster club funds and district funds, including ASB funds, must never be commingled. Booster clubs and the school entity should remain separate, including in the following ways: - The booster club name, address or any other correspondence should never imply any form of responsibility on the part of the ASB or district. - The district’s tax-exempt status and identification number are not for use by any non-school organizations or groups. - Booster clubs are responsible for their own tax status and accounting. So, no, booster clubs and other non-profit corporations should not use the district or high school mailing address as their only mailing address and/or business operation address. It is important that the entities both appear, and actually exist, separately. 10/6/09

    Minutes: E.B. SCRIPPS ELEMENTARY SCHOOL
    ACADEMIC FUNDRAISING PARTNERSHIP - MEETING MINUTES
    Tuesday, November 1, 2011
    EBS Multi Purpose Room, 6:30 p.m.


    Past President Report
     Lisa Collins reported on the ongoing copier issue (see 2010/2011 minutes) and collection notice EBS were given. Lisa Collins was served a summons for $9K from the AFP. Our research shows that the EBS AFP made 5 payments at one time for the copier. The lease is for 21 quarters, of which we paid for 5 quarters. We are speaking with the school district’s general counsel and they have been quite supportive. We are doing more research to find out how the AFP got involved with this issue. In the worst case scenario, we wouldn’t’ have to pay it in cash, insurance would most likely cover the total. The AFP never signed for the copier and there isn’t anything we have in writing that we are liable.
    E.B. SCRIPPS ELEMENTARY SCHOOL
    ACADEMIC FUNDRAISING PARTNERSHIP - MEETING MINUTES
    Tuesday, January 3, 2012
    EBS Multi Purpose Room, 6:30 p.m.
     Litigation report: A copier arrived at EBS in 2007 and was signed for by school clerk. The AFP
    made five payments on the copier. In 2008, the AFP treasurer stopped making payments on the
    copier since it was not in our budget. The copier company came after the district for the copier,
    and then came after the AFP to make further payments. In 2011, we received a past-due
    statement with tons of fees attached for $7,000. We asked the school district for help and the
    issue ended up in court. We weren’t aware that we hadn’t appropriately responded to the suit.
    We had a default judgment set against us. We now owed $10K. We finally ended up with a pro
    bono lawyer to help us out. We still had to file paperwork at $600. This pro bono lawyer was
    able to help us settle for $1,000 with the copier company. The issue is now over. In 2008 when
    we stopped making payments. They picked up the toner & accessories, but not the copier. We
    own the copier now. We would need $350-500 to get the copier running. Research will be done
    to decide what we should do with the copier at this time.
    E.B. SCRIPPS ELEMENTARY SCHOOL
    ACADEMIC FUNDRAISING PARTNERSHIP - MEETING MINUTES
    Tuesday, February 7, 2012
    EBS Multi Purpose Room, 6:30 p.m.

    President’s Report
     Tasha Jessup reported that the copier issue is officially over. Our pro bono lawyer, Mark
    Zebrowski worked very hard for us, working weekends to finalize this issue.
    o The AFP will try to sell the copier that is located at EBS. It will probably bring in less than
    $500.00

    For the Kids
    For the Kids subscriber

    It is a separate entity with it's own tax ID number and files taxes yearly. I do not plan to get into a debate with you. By the way, why do you get involved in everyone else's business? From what I understand, you don't even have kids in the district anymore.

    I want it on the record that you do not speak for ALL parents, or many in my neck of the woods. I hope the district is aware of that.

    Sally Smith
    Sally Smith subscriber

    @For the Kids

    E.B. SCRIPPS ELEMENTARY SCHOOL ACADEMIC FUNDRAISING PARTNERSHIP - MEETING MINUTES Wednesday, January 12, 2011 EBS Library, 6:30 p.m.

    Officers’ Reports President
    • Line items on the AFP budget are currently open ended, not specifically allocated for specific items.If you want that changed so that there are more footnotes, please come to the budget meetings which will probably start in February.
    • Lisa Collins reported that the AFP is currently involved in a lawsuit.There was a copier issue dating back to 2008.The original contract for the copier was signed in 2007 by a school clerk who is no longer involved with EBS.Jackie Shillington reported that she received a letter from a collection agency that they had acquired the rights from CIT technology financing for a lease on a copier.It said, “You owe us $7,000.39 and you have until August 30th to pay or we will consider filing suit.”The San Diego Unified Legal Department’s Interim General Counsel who said to ignore the letter.That same day we got a letter from a law firm saying pay up or we’re taking you to court.In December, Kayla Senos, another past present of AFP received a summons at her home that we are being sued about.Kayla gave the summons to Jackie who got in touch with the legal department again and she told us that she doesn’t think this suit will stand.Apparently, back in 2008 the AFP made 4 payments on the copier lease.The lease is under Ellen Browning Scripps Elementary School, but AFP never had a contract for the copier.Jackie received a letter from the SD Unified legal department on January 11th that basically asked for the complaint to be dismissed.This letter was sent to the law firm that is suing us.The SD Unified legal department doesn’t think this will stand since the AFP never entered into a contract.

    AnnaCrotty2
    AnnaCrotty2

    @MarioKoran check out how Del Mar handled this a few years back - rocky, but big improvements. impractical in a big district, though.

    Fran Shimp
    Fran Shimp subscribermember

    @AnnaCrotty2 @MarioKoranWhile Del Mar does have a "Schools Foundation" to support all schools, I'm pretty sure individual school sites also also raise funds for specific needs at that site. And, yes, very impractical at a large district.

    Anna Crotty
    Anna Crotty memberadministrator

    @Fran Shimp @MarioKoran  PTAs in DM raise for things, and are site-specific.  (Books, paper, teaching materials, ice cream social night, etc.)  The Foundation raises for people - Art, Music, Science, Technology, PE, and that is across the district.  All those budgets are pretty transparent, which I think we can be proud of.

    Fran Shimp
    Fran Shimp subscribermember

    @Anna Crotty @Fran Shimp@MarioKoranAbsolutely - transparency is a good thing.  And please don't misunderstand my previous statement - I think it's great the Del Mar has both options - district and site fundraising.  But it is a lot easier when you only have 8 schools (I think it's 8?)  SDUSD is huge, many of our clusters have more than 8 schools, and there are 16 clusters.  I do not foresee district-wide fundraising being effective for many reasons. 


    On a different note, Mario, I do not believe any foundation has ever stuck the district with the tab - if they had I'm pretty sure we would've heard about it.  To that point, I do understand where that might be an issue and, speaking as a current Foundation Co-President, I would understand if the district asked for full funds up front once exact salary was established. 


    I also understand the equity issue, but keep in mind, if you are trying to compare what each school offers their students, in some ways your comparing apples to oranges.  SDUSD learned a long time ago that one size does not fit all - each site has their own priorities.  One school might feel that lower class size is the best way to improve student achievement while another school might feel art once a week will have the greatest effect.  It's my understanding that schools that receive Title 1 funds (which from what I'm told can be hundreds of thousands of dollars per year) may spend their money on teachers (for lower class size) or art support or whatever they feel will help their students thrive.  These priorities may or may not be the same things that schools with parent foundation funds spend their money on. 

    In any case, I don't believe taking even more programs away from students is the right answer. 


    Mario, I'd be happy to speak with you (I did reply to your email a while ago but never heard back..?).  I trust you will report this issue fairly and accurately. 

    Matty Azure
    Matty Azure subscriber

    "All students at Bird Rock have the potential to succeed",  Boy, I sure blew that theory!

    Signed,

    Matthew Yanke 

    NorthParkian
    NorthParkian subscriber

    The district has apparently closed its grants and development office to save money (http://www.sandi.net/page/1096), but it would be useful for the district to have a foundation that covered the entire district.  This foundation could also facilitate private business donations.  But until the district offers services that parents want (arts/music/foreign languages/small class sizes), parents will continue to advocate for them at the local level.  I understand that Ms. Marten would like it if we didn't need foundations, but right now the foundations are making quality schools possible in SOME neighborhoods.  Are there also foundations at school is less affluent parts of town?  I know there are active ones at McKinley and Birney Elementaries.