by David Safier
I began researching this post by looking through reader comments on what I had written about tuition tax credits and School Tuition Organizations (STOs) in May. I came across a comment from ChamBria J Henderson, the Executive Director of the Arizona Scholarship Fund (ASF). Looking through yesterday's article in the Republic and multiple articles in the East Valley Tribune, I found Henderson's comments disingenuous, to be kind, and borderline lies, to be more frank.
I decided to deconstruct her comments, measuring them against yesterday's articles, but first I went to the Arizona Scholarship Fund website to confirm what I read in the news articles. What I found there was so jaw dropping, I abandoned my first idea and decided to simply take you through the way ASF does business.
Where do I begin? A good place to start is the page titled, How to send your child to private school for free! (No, I'm not exaggerating. That's the page headline.) As most of you know by now, someone giving a tuition tax credit contribution can recommend that it goes to a certain student. Parents can't contribute to their own children's tuition, but anyone else is OK.
So, the page says, if you want to have your child's entire tuition paid by tax credits, you have to do some serious fundraising. Contact family, extended family, friends, co-workers and neighbors. How do you contact them? Here are some ideas ASF suggests to parents.
• Invest in a saturation mailer
• Do an event at your home. Either a breakfast or dinner or just small party encouraging friends and family to donate. ASF representatives are available for these events.
• Encourage each donor to help you find one more donation
• Email personalized brochures with a link to the donor page to your email list and encourage them to forward it on.
• Take brochures to any Christmas and work parties you have coming up over the next few weeks.
• Ask your employer if they will allow an ASF employee to come out and speak on behalf of your family to all company employees.
• Knock on your neighbor’s doors and ask them to support your family.
• Leave a brochure with your family’s name on every seat in your church or ask your pastor to allow you to or your children to speak for a few minutes.
• Talk to your donors about if their employers offer matching gifts. Any of them that do, those dollars will follow the original donors recommendation to your family.
How do parents get brochures to encourage people to give to their children? All they have to do is call ASF, who will send as many brochures as a family needs.
ASF makes it clear that there is no guarantee a donor's money will go to a certain child. That would be a "designation," which would mean it wasn't a tax deductible charitable contribution. But "recommendations" are just fine.
However, ASF states clearly, "There is NO guarantee that the donor’s recommendation will be met."
No guarantee, maybe, but as close to a certainty as the STO can make it.
Parents accumulate "recommended" money in a Family Aid Fund. The fund can grow large enough to pay for a entire year's private school tuition.
But surely you can't accumulate more than a year's tuition, can you? The answer is, Yes you can.
To ASF's credit, it doesn't allow reciprocity, where one family gives money to another family's child, expecting the other family to reciprocate.
The reason is, reciprocity is a clear violation of IRS rules, which state you can't give a tax deductible contribution and expect any benefit in return. So by giving ASF credit on this count, I'm praising with faint damns, since, if ASF condoned reciprocity, it would be condoning illegal activity. To its discredit, ASF doesn't say if it actively looks for possibilities of reciprocity, nor does it, so far as I know, make contributors sign something saying they have not entered into a reciprocal relationship with another contributor. From what I've read, it sounds like classic Don't Ask, Don't Tell. We won't ask if you've made a deal with another parent, and you won't tell us. Then everything's OK.
No matter how incredible the STO's policies are, they used to be worse. According to the Trib article, ASF used to allow a family to start a fund for their children when they were born. Now, they have to wait until "January 1st of the year the child enters Kindergarten."
And at one point, ASF allowed parents to manage their own Family Aid Funds, but they had to stop the practice. They also used to give donor information to the families — I take that to mean families had the ability to find out exactly who contributed money for their children's tuition — but they stopped that practice as well, because it's illegal.
All the information I've taken from the ASF website lacks the personal, anecdotal touch needed to breathe life into the corrupt and indefensible system which allows parents to use money that would otherwise go into Arizona's state budget coffers to pay every penny of a child's private school tuition. So I'll end with a story from the Trib article about how one family used ASF.
Summit School was the right fit, Paul said, and the $6,000 a year in tuition was manageable on two college professors' salaries. Tax credit scholarships initially just lowered Graham's private school costs.
Then, in 2006, Summit rocketed its tuition to almost $10,000 a year. Rather than pull Graham from the school, Paul said they tried to get the increase covered with tax credit donations. The Bosches asked colleagues and friends at their church to donate on Graham's behalf.
Money began to roll into their account at the Arizona Scholarship Fund. Tuition "wasn't totally free at first, but then we got to a point where for us there was no cost," Paul said.
There was even money left over.
Paul knew last year that ASF had received more in donations for Graham than they needed to pay his tuition. But a family friend whose child also attended Summit was suddenly having financial trouble.
The solution was simple. Paul said he called ASF to request that whatever extra cash remained in their account be transferred to their friend's account with the scholarship charity. ASF made the transfer, he said.
Henderson confirmed that ASF used to allow families to shift money from one account to another, as though the charity were a bank. She said ASF ended that practice last year.
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The public school system currently recieves $8,000 per child for their education. My child’s tuition at a private school is $4,000. The way I see it, I am saving the government money! If you get rid of this credit you will have an influx of students in the public school system creating a deficit in the budget for that year at least and possibly into the future.
I thought that Americans and specifically democrats were all about choice. Where is my or your choice when it comes to where we want to send our children to school? The money, my money, should follow my child wherever I want to send him!
Freedom to Choose!
What a scam!
I haven’t a coherent sentence to write that embraces my rage right now…