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Children First Fund gave thousands on Ackerman's way in, too

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by Benjamin Herold
for the Notebook, WHYY/NewsWorks

The same charitable foundation that is funneling $405,000 in controversial anonymous donations to support the buyout of departed Philadelphia schools superintendent Arlene Ackerman also gave the District $150,000 to support Ackerman’s arrival.

Over $10,000 of that money, which was used to create a “CEO’s Transition Fund” to cover expenses related to Ackerman’s transition team, went directly to Ackerman herself.

The foundation, Philadelphia’s Children First Fund, has come under considerable scrutiny in recent weeks following the revelation that it had been used as a pass through for anonymous donations used to help buy out Ackerman’s contract. Some state legislators, the good government watchdog group Committee of Seventy, and Ackerman herself have called for the names of the donors to be made public.

“Secrecy has huge potential downsides,” said Zack Stalberg of the Committee of Seventy last week. 

To date, however, PCFF has not given any inclination that it intends to reveal the identity of the donors. The foundation’s executive director, Jeanne-Marie Hagan, did not respond to multiple requests for comment. 

Mayor Michael Nutter, who acknowledged personally soliciting some of the buyout contributions, has defended the right of donors to give anonymously.

“If someone want to remain anonymous, that is their choice,” said Nutter.

His office did not answer a series of questions about how the fundraising proceeded.

"The mayor said what he had to say about it on the day of the announcement," said Nutter spokesman Mark McDonald. "He spoke to the issue at some length. He clearly wanted to minimize the public dollar outlay and said he agreed with the [PCFF] approach."

McDonald referred all questions to the Fund.

In addition to the identities of the donors, there are lingering questions about whether it is permissible under IRS rules governing nonprofits to solicit tax-deductible donations meant for an individual rather than an entity.

In addition, Ackerman was, until recently, a member of PCFF’s board. The IRS also has rules relating to activities that substantially benefit one of its board members.

The $150,000 to support Ackerman’s transition team was given to the District in October of 2008. 

The original SRC resolution (SRC-8) authorized acceptance of the grant and creation of the transition fund. It called for the money to be used to pay for “travel, meals and hotel expenses incurred as a direct result of the Transition Team providing such consultative services to the School District” and provided stipends of up to $1,000 per day to members of the transition team.

The original resolution was superseded three weeks later, however, by an amended resolution, SRC-11, approved on June 18, 2008.  

The changes appear to have been designed to allow for more money to go directly to Ackerman. For example, the amended resolution specified that payments need not be limited to the work of the transition team and authorized payment to Ackerman for “consultative services she rendered during the period from March 1, 2008 through May 31, 2008.”

Ackerman was named CEO in mid-February and her tenure as superintendent officially began on June 1, 2008.

District spokesperson Fernando Gallard said that Ackerman herself was ultimately paid $10,622.51 from the fund, but could not immediately provide a breakdown of the expenses. He said that $141,486.19 of the $150,000 was spent.

Sandra Dungee Glenn, the SRC chairwoman at the time, was required to approve any expenditures. On Wednesday, she defended the work of the transition team, but declined to provide further detail about its funding.

“The transition team was intended to help Dr. Ackerman assess the status of the District,” said Dungee Glenn. “To the best of my knowledge, they produced a report for Dr. Ackerman.”

Among the two dozen individuals involved in the transition team’s work were:

  • Lori Shorr, Mayor Nutter’s chief education officer
  • Donna Cooper, a policy advisor to then-Governor Ed Rendell
  • Robert Peterkin, director of Harvard’s Urban Superintendents’ Program
  • Dan Katzir, managing director of the Broad Foundation
  • Eloise Brooks, former chief academic officer of the San Francisco Unified School District, where Ackerman was previously superintendent
  • Jerry Jordan, president of the Philadelphia Federation of Teachers

Also involved were the two candidates who had just lost out to Ackerman for the Philadelphia superintendency: Leroy Nunery and Kent McGuire, then the dean of Temple University’s College of Education. McGuire and Peterkin co-chaired the group.

The Philadelphia Inquirer reported at the time that about half of the participants turned down their stipends.

According to District records, Nunery was not among them.

At the time, Nunery was running his own boutique management consulting firm, PlusUltre. District records show he was authorized to receive up to $8,000 and ultimately was paid $4,128.78 for his work.

At the time, Helen Gym, founder of Parents United for Public Education and a member of the Notebook’s leadership board, criticized spending money on a transition team charged with assessing the District’s strengths and weaknesses.

“It’s not a matter of what do we know. It’s a matter of what we’re going to do about what we know,” Gym told the Inquirer in April 2008.

Wednesday, Gym said PCFF’s decision to fund both the transition team and the buyout package have raised eyebrows.

“It confirms some suspicions that people have been raising from the beginning about the role of the foundation, the use of its money, and who is actually benefiting,” said Gym.

PCFF was established in 2003, when former CEO Paul Vallas was in charge of the District and James Nevels was chair of the SRC. Its stated mission is to “facilitate individual and organizational giving to create a permanent source of philanthropic capital to the School District of Philadelphia, its leaders, its teachers, and its students.”

PCFF is located in Center City. Its board of trustees is led by Sheldon Bonovitz, the chairman emeritus of the Duane Morris law firm, where SRC chairman Robert Archie is a partner.

Archie also currently serves on the board of PCFF, as does Nunery. According to the foundation’s 990 tax filings with the IRS, both men – and Ackerman – joined the board sometime between July 1, 2009 and June 30, 2010.

Ackerman is not listed as a current board member on the foundation’s website.

Between July 1, 2008 and June 30, 2009, tax records show, PFCC gave out $1,843,359 in grants, all to the School District of Philadelphia. 

All non-profit organizations and charitable foundations are required to file 990 forms with the IRS. They are not required to list their donors.  The forms can be accessed online for free at www.guidestar.org, among other places.  

Last week, Bryn Mawr attorney Mark Schwartz said he has requested that the Internal Revenue Service (IRS) investigate PCFF for its role in facilitating Ackerman’s buyout.

“As a citizen, I am just outraged by this incredible waste of resources,” said Schwartz. “I think the IRS needs to look into this charity, disallow the deductions taken by individual donors and disallow the tax exemption of Philadelphia’s Children First Fund.”

IRS spokesperson Mark Hanson said he could neither confirm nor deny whether any investigation has been initiated.

“If a taxpayer contacts us with a complaint, the agency will take a look and act accordingly,” said Hanson.

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