Not-for-Profit Managed Private Tuition | Eastern North Carolina Now

    Publisher's Note: Jim Bispo's weekly column appears in the Beaufort Observer.

    There was an article in the 6/29 issue of the WDN (page 3, News Briefs) that said the NC backers of the NC private tuition law have given up (for now). The private tuition proposal is one that allows corporations to make contributions to fund private school tuition scholarships and receive a tax credit equal to the amount contributed - up to $4K. (I remind you of the difference between a tax deduction and a tax credit. A tax deduction reduces the amount of your income that is taxed. A tax credit reduces the amount of your tax - dollar for dollar) Sounds a whole like a way to get around "vouchers". What we are not told is that according to the proposal, the money is to be funneled through not-for-profit corporations.

    It is amazing that folks smart enough to run for and get elected to the NC Legislature and then become the House Majority Leader as Paul Stam has done, seem to be "taken in" by the notion that not for profit organizations really care about the folks and dedicate their full and complete energy to ensuring maximum "good" is achieved. (Or, do you suppose what we are seeing here is an attempt at crony capitalism at the state level) It is even more amazing that so many of we long suffering taxpayers have been conditioned to believe the same thing. Anyone who has bothered to do even a little "due diligence" will tell you that it ain't necessarily so. In fact it tends to be the exception rather than the norm. Not-for-profit organizations of any size work almost as hard as anyone else to get a good return (usually through obtaining taxpayer grant money rather than working for and earning it). That's one difference. Another is that they are free to pay their principals much better than would normally be expected in a for profit competitive environment - and usually do. They tend to be like the government. They don't ever seem to go away and there is no real motivation for them to "do better".

    Our legislators seem to have been sucked in to believing that all non-profits are above board and are to be trusted to be good shepherds of our money. Apparently they are not much different than the Anointed One when it comes to picking winners and losers. Could it be that crony capitalism is alive and well among the Reps in Raleigh??

    According to the article cited above, House Majority Leader Stam has been working with the president of Parents for Educational Freedom in North Carolina to bring the "private tuition law" to fruition. Parents for Educational Freedom in North Carolina is a 501(c)(3) non-profit corporation. According to their tax returns, the purpose for which the organization was formed is to,

    "Educate public concerning EDU opportunities in NC to improve NC's K-12 education by informing and empowering parents. particularly low income families, to chose the education that is best for their child(ren)."

    Say what??

    The fact that the organization is a 501(C)(3) means that contributions to that organization are tax deductible by the donor. Over the past several years the main focus of this organization has been on expanding participation in charter schools.

    That seems to be a fairly lucrative undertaking. According to the Parents for Educational Freedom in North Carolina 2010 tax return the President received a salary of $95K and a little less than $13K in "other compensation".

    There is another non-profit with a similar sounding name in Raleigh. The same individual started them both and is the president of both. The second non-profit is the Partners for Education Freedom in North Carolina. It is a 501(C)(4) non-profit. Both are the brain child of the same person. In addition to the salary he pays himself out of the 501(c)(3), he pays himself $25k out of the 501(c)(4). He claims to spend a lot of time "educating" legislators as to how to improve education. I haven't seen it said in so many words, but my translation of what I have seen is that the solution is to give Corporations a tax credit for handing money over to non profits ( his non profits??) for them to hand out as tuition (after they have taken their cut). It is not a large leap of faith to believe that Mr Stam views these organizations as the proper vehicles to this noble end.

    Actually allowing all taxpayers to specify the uses to which some amount of their taxes are to be used sounds like a really good idea. Maybe we should implement a program whereby individuals (as well as corporations) could designate what some amount of their taxes are to be used for (e.g. highway maintenance, infrastructure, etc.) and then take that amount as a tax credit.

    What doesn't sound so good is handing that tax money over to not-for-profit organizations to manage. They aren't all that different than government. Success can be "declared" and failure is not punished. How about using for-profit organizations competitively selected to take care of this??

    Regardless, if the Reps in Raleigh don't wise up they and they continue to emulate the Dems, it's going to be the Dems back in charge very soon, and deservedly so..

    D'ya think??