District Plans New Corporation To Raise Funds

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Officials of an affluent California school system are exploring the idea of establishing a nonprofit charitable corporation as a fundraising entity that could conceivably reduce the system's dependence on state funds.

Details of how the corporation would operate and the "concepts" for raising money are being closely guarded by planners of the project, according to Deryl Cram, assistant superintendent for business in the Cupertino Union School District.

The school board has signaled its approval of the idea and the corporation's charter and bylaws are currently being written, he said. Once those papers are submitted and approved by the school board, the school system is required to file them with the secretary of state and the Internal Revenue Service.

'Letter of Ruling'

"One of the limiting features is that we have yet to get a letter of ruling on it from the Internal Revenue Service," Mr. Cram said. The "letter of ruling" would determine whether the corporation could qualify for tax-exempt status.

Mr. Cram said establishing the corporation would allow the school system greater flexibility with its business management and it would operate in the same manner as other nonprofit organizations. "The opportunities are unlimited," he said.

The school system, which has a reputation for educational innovations in the Santa Clara County-San Francisco Bay area, has been "struggling to make ends meet," according to Mr. Cram, because of Proposition 13 and another state law which limits per-pupil spending in each district.

Since 1972, the district has lost nearly half of its K-8 student population. In about 10 years, enrollment in the elementary schools has fallen from 23,500 to 12,000 students and officials are "hoping it will bottom out" at 10,000 in the next few years.

Phyllis Tuckwiler, public-information officer for the district, said the primary reason for the enrollment decline is that high-priced housing in the area has kept out families with young children. "Those who can afford to move into the area don't have children," she said.

Corporation Limited

Mr. Cram said the corporation would conduct any school business "that is not restricted by state laws governing school districts." He said the corporation would operate under the direction of the school board but would not be owned by the school district. Mr. Cram said some members of the school board could serve as members of the corporation's board of directors.

Previous attempts to raise money for the school system through millage requests have been defeated.

The state now provides 70 percent of the district's general operating expenses, and local funds cover the remaining costs for the schools. Mr. Cram said money raised through the corporation's efforts would not necessarily replace state funds.

In 1975, the system closed 14 of its 42 schools, sold some of those buildings and leased the others.

Mr. Cram said the sale of one undeveloped site netted the district $4.5 million, which he said could be used as seed money for the corporation.

"In education today, you should implement as many business practices as you can that would be beneficial," Mr. Cram said, "in order to provide the funding base for the operation of a school district and to allow its primary function of educating children."--S.F.

Vol. 01, Issue 08

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