Lawmakers seek to shutter little-used education foundation
by Tim Lockette
Jul 29, 2013 | 2864 views |  0 comments | 59 59 recommendations | email to a friend | print
MONTGOMERY --- An Alabama lawmaker is hoping to shut down a little-known education foundation that may have brought in less money than the state's school system spent running it.

State Sen. Gerald Allen, R-Tuscaloosa, has pre-filed a bill that would disband the Foundation for Local Schools, a nonprofit set up by the Legislature to accept donations from wealthy people and corporations interested in setting up trusts to help fund public education. Allen’s bill would come before the Legislature in the 2014 session, which begins in January.

The 1992 law creating the foundation gave the organization the power to "solicit and accept … bequests, grants and donations," but school officials and lawmakers say that 20 years later the foundation's donors haven't really grown beyond the handful of trusts it managed in the 1990s.

Court documents provided by state school officials suggest that in 2012, the organization oversaw four trust funds worth $437,000, with the interest and earnings on those assets going to four school systems. Even those funds are going away; all four trusts have been dissolved by court order and state officials say the money is being transferred to the school systems.

"The cost to administer the trusts was more than the interest the trusts were bringing in," said Malissa Valdes-Hubert, spokeswoman for the Alabama Department of Education. Valdes-Hubert said she didn't have an exact estimate of that administrative cost.

Hubert said the state's Department of Public Examiners has recommending that the foundation be dissolved.

Sen. Trip Pittman, R-Daphne, co-sponsored a similar bill in the 2013 session. He said the statewide school foundation failed to attract new donors because people would rather give money to a foundation tied to a specific school system.

"To donors, a local organization is like a booster club for academics," he said.

Historically, private-donor fundraising for public schools has traditionally been the preserve of colleges and universities, but in recent years, K-12 schools have shown more interest in raising funds from private donors. Under the Alabama Accountability Act, passed earlier this year, the state would give tax credits to nonprofits set up to grant scholarships to students living below the poverty level.

Pittman said those scholarship-granting organizations are likely to include both local and statewide nonprofits. He said he doesn't expect the statewide scholarship organizations to face the same fate as the Foundation for Local Schools.

"I think a statewide organization will appeal to donors because there you can take advantage of the economy of scale," Pittman said.

Those scholarship agencies will also have officers dedicated to raising funds — something the Foundation for Local Schools apparently didn't have, Pittman said.

Allen, the bill's sponsor, said eliminating the Foundation for Local Schools isn't really a controversial move. He said last year's bill failed because it got brushed aside in a busy legislative session. He said pre-filing the bill should give it a better chance of passage in the 2014 session.

Capitol & statewide correspondent Tim Lockette: 256-294-4193. On Twitter @TLockette_Star.

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