Agreement reached after much discussion
Making the decision to stop administering scholarship funds and focusing solely on educating seemed an easy decision for some Augusta Board of Education members, but for others, it seemed an agonizing choice at last night’s USD 402 school board meeting.
Superintendent John Black brought the idea to the board last month and it came up for discussion and possible approval on this month’s agenda.
His recommendation was to enter into an agreement with the Augusta Community Foundation, a new group and branch of the Central Kansas Community Foundation, for the purpose of administering scholarships.
“We’re not in the business to administer scholarship funds and our intent is not to make the shift an abrupt change,” Black continued, “If donors don’t want to move, they can remain with existing investment offices and remain under USD 402. We’d like to see any new scholarships that are established be placed with the Augusta Community Foundation.”
Dr. Black outlined the reasons:
• To have funds administered by an organization whose business is to manage endowments, scholarships, memorials and donations
• To set up a vehicle for donors to pass through their wishes to the community
• To have system that understand state and federal standards and compliance requirements
• To have an opportunity to co-mingle funds for investment with the possibility of greater earnings
•To provide greater assurance that the management of the donation will be maintained
Board member Charles Garcia said, “I’m confused. I just don’t understand. Why don’t we stay with a local office. Where exactly is this foundation?”
Dr. Black responded, “It’s the newly formed Augusta Community Foundation and is affiliated with Central Kansas Community Foundation.” Black went on to explain again that the move would not affect scholarships and the money would be invested in Augusta.
Black also explained that investment offices, such as Martin & Malone Financial in Augusta - the one which Garcia was referring to - don’t necessarily administer the funds, but invest the money and they in turn make money on the investments. The Foundation is a non-profit, 501 (c) (3) public foundation whose purpose is to assist donors in building permanent endowments for charitable needs in our community. The Foundation is governed by a local Board of Directors that determines operating policies and grant requests.
Board member Kim Braungardt still wasn’t convinced, “Why do we need to do this? I don’t understand what this will accomplish.”
Again, Dr. Black stressed that the district needs to get out administrating the scholarships as other districts have done. “Donors don’t care who is doing the administrating as long as it’s being done right. We’re in the business of educating kids not administrating scholarships.”
Braungardt wasn’t convinced. “Local companies should have a chance to keep the business.”
“Local investment offices don’t administer, they invest,” Black stated.
Board member Bill Rinkenbaugh weighed in, “Look, it just comes down to administration. If someone takes $10,000 down to the investment firm to set up a trust then great. We’ll just be telling donors to go to the Foundation.”
Board member Andy Hall explained that he had initially been against moving the scholarships to the Augusta Community Foundation until he spent some time researching and speaking to people, which included Foundation board members and school board members in other districts that don’t administer scholarships. He stated, “The Augusta Foundation is local. Their board of directors is local and they have the opportunity to invest. It’s local people involved... and the way it is now, if we screw up the administering, it’s our responsibility.”
Again Dr. Black said, “We are not an investment company, we’re a school board.”
“It would be a smart moving into a foundation. We won’t be responsible for investing, which isn’t our responsibility,” board member Jim Brown said.
“People can still take their dollars to a local firm if they want and if it’s there now and they want to keep it there, then fine,” BOE member Larry Winter advised, then asked, “Why do we want to be responsible for managing investments?”
District Director of Finance Annette Powers reminded the group that the Foundation is a 501 (c) (3) organization, which makes donations tax deductible.
Matt Malone was present at the meeting and reported to the group that his firm is in the process of setting up a new charitable trust foundation, but certain requirements have yet to be completed.
Braungardt still not convinced, “If we decide to go with the Foundation, can we change in a year if we want?”
“It doesn’t have to be a forever decision. A group of local generous individuals have stepped forward...but if you wish, when someone calls here concerning scholarships we can give them options. We’re just not in the investment business,” Dr. Black said.
In the end, the board voted 7-0 to enter into an agreement with the Augusta Community Foundation for the purpose of administering scholarships.
More news from last night’s BOE meeting will be in Thursday’s Gazette.