State College school board votes on Education Foundation agreement as critics worry

Centre Daily Times, file

The State College Area school board voted, 8-1, on Monday to spend as much as $360,000 over the next three years on operating costs for the State College Area School District Education Foundation.

However, critics are skeptical about investing more money to support a foundation that so far hasn’t come close to breaking even.

“I wonder if you had invested over $250,000 of your own money in your own personal portfolio and had lost about half of that money, if you would commit to investing another $360,000 in the same thing?” Marion Sheridan, of Ferguson Township, said. “Yet, that is what you are preparing to do with taxpayer money tonight. I believe it amounts to an egregious mishandling of tax dollars and also of your fiduciary responsibility.”

She addressed the school board during the public comment portion of the meeting, saying she has concerns about the “honesty, transparency and mission” of the foundation.

The SCASD Education Foundation, a nonprofit charitable organization, was established in fall 2015 in part to take advantage of the state Educational Improvement Tax Credit program, which allows businesses to direct a portion of their local tax liability to approved nonprofits, foundation Executive Director Paul Olivett said.

The school district also “felt that it was important to have a more focused effort regarding private fundraising,” Olivett said.

“We wanted to prioritize how we were gonna impact student experiences in ways that we know that we can improve, needs that aren’t typically funded through an annual budgeting process, as well as in areas that are beyond the classroom,” district Superintendent Robert O’Donnell said.

Bellefonte, Penns Valley and Philipsburg-Osceola area school districts also have education foundations.

To date, the foundation has generated about $135,000 in direct revenue, including EITC contributions and gifts from individuals and local businesses.

At least $250,000 in taxpayer dollars have been spent on the foundation’s operating costs, school board member Laurel Zydney, the only dissenting vote, said at the meeting.

So far in fiscal year 2017-18, Olivett said the foundation has raised about $90,000, noting the foundation’s inaugural fundraising event is scheduled for May.

He said the foundation’s year-to-date expenses are about $88,000 and on track to be between $110,000 to $115,000 total for the fiscal year. Those expenses include Olivett’s monthly fee — as the part-time contracted executive director — website and database management services, content creation, monthly emails to alumni, printed and electronic versions of its magazine (produced three times per year) and three annual appeal mailings.

The school board’s vote formalized the relationship between the district and the foundation through a Memorandum of Understanding, a type of contract.

The agreement caps funding from the district to cover the foundation’s operating costs at $120,000 per fiscal year, beginning July 1, 2017, through June 30, 2020.

The district expects that the foundation will raise more money than the district spends to finance the foundation’s expenses, O’Donnell said.

“We’re working toward that. We know ... (those are) the results we need, otherwise we’re gonna discontinue the effort,” he said.

The agreement states that the foundation must raise at least $120,000 by June 30. In the following two fiscal years, the amount the foundation must raise “will increase” — but it doesn’t say by how much.

It’s also been suggested that the Centre Foundation could handle the district’s fundraising needs.

Centre Foundation manages 78 full endowment funds that have been created over the years to benefit SCASD or its students through scholarships.

A certain percentage of the endowment funds go back to the district or directly to students or postsecondary schools each year — normally about $120,000 to $130,000 per year, Molly Kunkel, Centre Foundation executive director, said in a phone call Monday afternoon.

Having the funds go through the Centre Foundation rather than the Education Foundation wouldn’t address the need to have a development officer for the school district, school board President Amber Concepcion said.

Sarah Rafacz: 814-231-4619, @SarahRafacz