Private funds go public
April 12, 2007

Woodland Hills joins trend toward seeking donations from alumni to bolster tax funding

By Tim Grant

Woodland Hills School District soon will become the latest public school system in the region to take a page out of the higher education playbook when it comes to raising money.

School administrators recently filed a proposal to start a nonprofit corporation, which will allow the district to seek private donations from its alumni to increase the district's revenue stream.

"We are celebrating 25 years and we want to connect back to our alumni," said Roslynne Wilson, the superintendent. "We see alumni as being able to support some targeted areas we won't be able to fund because of Act I."

Two fund-raisers, a red carpet gala April 26 and a golf outing May 19, have been scheduled to kick off a nonprofit organization that will be called the Woodland Hills Alumni Association.

The Woodland Hills Academic Foundation, which was started in 1999, raised about $20,000 last year from contributions and grants to fund various educational projects in the district. The Woodland Hills Alumni Association, however, will focus initially on the athletic program and rely heavily on donations from graduates.

"We didn't put athletics in the title because we didn't want to be restricted that way," said Maria McCool, the district spokeswoman. "But athletics is a strong program and it has a lot of need. It seemed like a way to start. But we would like to expand it."

As education money from the state keeps shrinking, more school districts are looking for creative ways to raise money without having to raise property taxes.

Student bake sales and car washes are about as old school as the eight-track player. The growing trend in public school fund-raising is to form a public charity under 501(c)(3) of the Internal Revenue Code, which can generate enough hard cash to erect buildings, award scholarships and fund the salaries of teachers whose positions would be lost because of budget cuts.

Norwin School District in Westmoreland County is forming a nonprofit foundation to distribute scholarships from a $500,000 endowment it recently received from a will. Seneca Valley School District in Butler County recently sold the naming rights to its football stadium to a bank, and it's now called NexTier Stadium.

At least two school districts in the region are supplementing their budgets by making agreements with an athletic sponsor.

Elizabeth Forward High School will outfit all of its athletic teams in Adidas brand uniforms and shoes in exchange for deep discounts from the company.

The Montour School District agreed to take part in an ESPN sports network reality show centered on its football team in exchange for Reebok equipment, a new weight room and a scoreboard sponsored by Energizer batteries.

Dr. Carol Merz Frankel, a retired dean of the School of Education at the University of Puget Sound, recently finished a national study of public school foundations that will be published in the April edition of American School Board Journal.

Her research centered on affluent communities that routinely raise $2 million to $5 million a year to fund private foundations at public schools. Many states have laws similar to Pennsylvania's Act I, which requires voter approval of tax increases beyond a certain level. Private foundations provide a loophole for wealthy families to give more.

"They form these foundations and, in some cases, pay more into the foundation than they do in taxes," Dr. Frankel said.

In Silicon Valley, for instance, when some families fell on hard times after the dot-com bust, instead of sending their kids to private schools costing around $20,000 a year, they created private foundations and agreed to contribute $5,000 for each child to create public schools that would have all of the advantages of private schools.

"We concluded that this method of school funding does more good than harm for schools because it keeps affluent families involved in the public school system," Dr. Frankel said. "If we take affluent families out of public schools, schools become something different than originally intended. They can, in fact, become a social service agency."

Howie Schaffer, a spokesman for the Public Education Network in Washington, D.C., said there were an estimated 5,000 private foundations serving public schools in the country and the number is growing.

All of them, in terms of structure, mission and goals, are as unique as the school districts they serve.

Some are totally independent of the school districts. Others have the school superintendents sitting on their boards. Some are mainly athletic booster clubs. Others support academics.

The danger, according to Mr. Schaffer, is these foundations sometimes become a superintendent's slush fund or serve to perpetuate an underperforming status quo or a specific political agenda.

"We've seen foundations pop up all over the place," Mr. Schaffer said. "There has been a steady buildup. But there seems to be a tipping point as more grow and others see how much is being raised.

"We want schools, if they are raising this money, to be transparent about it," he said. "This is money that's serving a public need, a public trust, and we want to focus on instructional need and programs that have a proven track record. We want to be sure the money is used well and not wasted."