School foundation’s nonprofit status questioned

Parent files IRS complaint with campaign allegation


A Douglas County parent filed a complaint with the Internal Revenue Service Oct. 14 alleging improper activity by the Douglas County Educational Foundation.

Susan Arnold contends that recent activities by the DCEF — the Douglas County School District’s fundraising arm — violate the organization’s nonprofit status.

“I believe that this 501(c)(3) organization has been involved in political campaigning and deceptive and improper fundraising practices,” Arnold wrote in a letter accompanying the tax-exempt organization complaint.

DCEF interim executive director Cinamon Watson, also the school district’s community relations officer, says the allegation is baseless. 

“This is absolutely frivolous and ridiculous,” she wrote in an emailed response. “The attacks on the Douglas County Educational Foundation are abysmal and a pathetic attempt to draw an outstanding organization into the political fray. There is not a single fact or accusation that creates a legal liability for DCEF.”

In her formal filing, Arnold alleges the foundation “is soliciting direct donations for activities that do not support its mission or objectives as a nonprofit organization. These funds are being used to support political activity.”

Arnold’s complaint stems from the Douglas County School District’s late September acknowledgment that it used funds donated to the DCEF to pay consultants.

Those consultants include former U.S. Secretary of Education Bill Bennett and the American Enterprise Institute’s Rick Hess, who supported the district’s current direction in papers both wrote and in Bennett’s Sept. 25 speech. 

Neither Bennett’s address nor Hess’ paper initially were identified as products of paid DCSD consultants.

“In my opinion, (the foundation’s) actions constitute behavior aimed at distinguishing candidates for election,” Arnold said.

“There is widespread concern in the district that funds have not been appropriately allocated as people expected.”

Watson said the foundation is not worried about a potential IRS investigation.

“DCEF takes its obligations as a tax-exempt organization very seriously and we welcome any review that the Internal Revenue Service might choose to conduct — at anytime, anywhere,” Watson wrote. “We are confident that once the service has the true facts, it will quickly disregard this factually false and legally meritless claim made in the midst of a spirited election season.”  

Regardless of the ruling on her complaint, Arnold believes the foundation has damaged its reputation.

“When all of those funds get funneled through the DCEF, you feel the trust has been violated in terms of how the foundation is managing themselves,” she said.

A copy of Hess’ paper — “The Most Interesting School District in America?” — recently was delivered to many Douglas County residences with a letter of endorsement for the four board-supported candidates signed by state lawmakers Sen. Ted Harvey, Rep. Frank McNulty and Rep. Polly Lawrence. The letter notes it is paid for by the Douglas County Education Alliance, a nonprofit organization that has paid for TV and newspaper ads supporting DCSD.


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