UP FRONT DISD Fund-raiser Raises Funds from DISD

Dallas School District Foundation Flounders



Dallas is known for “innovations’ in public education, and one of the brightest ideas of 1977 – an independent
foundation to raise money for the city’s school system – was expected to become a feather in the cap of Supt. Nolan
Estes and a showpiece for the Board of Education. Trouble is, it’s not making much money. In fact, the school board
has pumped more than $165,000 in tax dollars into the operation, with little to show for it but plans on paper and
optimistic projections.

Foundation president James H. Bond originally predicted the foundation would raise $2 million in cash contributions
in the first year of operation. It hasn’t. Estes, who had predicted the foundation’s annual fund-raising total would
exceed $4 million, now says, “Maybe our expectations were a little high, but at first you’ve got to reach high.”

The Foundation for Quality Education Inc. was established in March 1977 as a non-profit, tax-exempt corporation
dedicated to seeking donations of money and real estate and to creating sources of revenue through marketing and
real estate management. The DISD is the sole beneficiary of the foundation. It was an Estes idea dating back to
1974, the rationale being that only a private foundation standing free and clear of the DISD could capture a hefty
chunk of the estimated $20 million that leaves Dallas annually for foundations and private educational institutions.
Despite a “wobbly start” in the first year, Estes insists the Foundation for Quality Education “will become a great
asset.”

He should know. Estes has been a dominant force in staffing the foundation, which, according to its charter papers
and bylaws, is supposed to be completely independent of the school system. Since May, two highly paid DISD employees
have been assigned full-time duty at the foundation and a third administrator has been hired by Estes personally to
coordinate foundation marketing programs. Secretarial and accounting help also has been assigned, and everyone
except Bond and one secretary is entitled to DISD employee benefits.

That may look like the taxpayers are bailing out the foundation. Estes says it isn’t so. And Bond says it’s been in
the plans all along, referring to a school board resolution to provide staff assistance to the foundation. However,
in early 1977 Estes said the foundation would open with $25,000 in seed money from the school system and that
thereafter it would “pay for itself” as it grew in assets and in staff. But that initial $25,000 was followed by
another $25,000. And for the 1977-78 school year, the Board of Education approved an allocation of $108,000 which,
upon closer examination of budget documents, jumps to more than $115,000. Most of the allocation is for salaries.

But that’s all that can be learned about the management of a foundation that spends the public’s money. Even school
board members don’t know. Bond insists the foundation is not subject to public scrutiny because it has its own board
of trustees and is set up under state and federal laws that allow private, non-profit corporations to keep their
business secret.

Bond, a retired banker who has also served as HEW regional director and Community Trust Fund president, scoffs at
the idea the foundation is costing the public even one tax dollar. He estimates the foundation has a current net
worth of about $635,000, most of which is derived from a six-acre tract of land in far south Oak Cliff, appraised
recently at $400,000. (The owners of the land first tried to donate the parcel to DISD, since it is located near
David Carter High School, but DISD referred them to the foundation.) If people on the DISD payroll weren’t working
for the foundation, “they’d be doing the same thing down at the administration building,” he says. And both he and
Estes insist the DISD personnel are essential to fund-raising success because donors want the assurance their money
will not be used for administrative expenses of the foundation.

Moreover, Bond says the foundation has saved the DISD more than $1 million in managing school system properties – a
value above and beyond the more than $50,000 it has granted to DISD.

“Where the hell can they [school board members] get for $90,000 what they get here?” Bond asks, apparently unaware
his budget allocation this year is for considerably more. “That’s the best damn investment they ever made!”

School board members think the foundation has been a good investment but they’re not sure why. Kathlyn
Gilliam, vice president, says, “I don’t know whether it’s performing a service or not. I don’t really see it as
separate [from DISD], but in discussions we haven’t been able to determine really what’s going on. It’s an awkward
situation right now.” Trustee Brad Lapsley, an industrial realtor who previously raised objections about the
foundation’s real estate dealings, asked the foundation for a review after this magazine inquired about his
knowledge of its activities.

“We have not attempted to put a handle on anything in terms of money,” says Bond. “We have not requested any money
[from donors]. . . We started, and then we got to work in the marketing end, which turned out to be more fabulous
than fund raising.

“This thing is a lot bigger than we anticipated it to be. Now it’s grown into a fairly large and respectable
operation [that] will mean much more money to the school district. We’ve been increasing our scope and tooling for
those things. It’s just like business. It takes two years to get the goddam thing on the road.”

“The Gift,” a new brochure sumptuously printed on heavy stock, is fresh off the presses and ready for use in fund
raising. Negotiations are underway with Tandy Corporation and Texas Instruments, sources say, for the development of
an instructional computer to be marketed by the foundation. And Bond is doing what Estes says he does best:
front-running for the foundation.

Taking a pencil to paper, Bond lowers his voice and gets back into the projection game. “This thing can stand,
without blushing, for $2 million a year in fund raising; $2 to $4 million in real estate, stocks, and bonds; and $4
million in marketing and automation.”

Déjà vu. We heard this kind of talk in the summer of 1977, when the school board figured the second $25,000 into
its budget. Will it be good enough this time? Lapsley, for one, isn’t sure. “When does the whistle blow? When does
this thing begin?” he asks.

Estes says now. The foundation is finally ready. And the first year wasn’t so bad, he says, borrowing from Robert
Browning, “Ah, that a man’s reach should exceed his grasp; Else, what’s a heaven for?” Maybe the Board of Education
knows the answer.

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