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Florida sets high bar on Imagine Schools' nonprofit status

It's good to see that Florida officials are looking into the Imagine charter schools shell game --and that at least one investigative reporter is on the job. Don't miss the fine investigative series on Imagine Schools which came in three parts from Mi>The Journal Gazette in Indiana.


by Tom Marshall

TAMPA -- Are 11 Florida charter schools with the national Imagine Schools chain being operated as true, nonprofit organizations under state law?

The Department of Education didn't bite on that question Tuesday, but officials said they plan to launch a formal rulemaking effort to resolve it. Judging from the department's statement, the company may face an uphill battle.

The issue came up last month in Hillsborough County, when the school board rejected an application to open an Imagine charter in Riverview. Board attorney Tom Gonzalez said the applicant's claim of nonprofit status didn't hold water.

Under Florida law, charter schools must be run by nonprofit organizations, and their local governing boards must maintain an arm's length relationship with a management company or service provider.

But Hillsborough officials said Imagine's proposed local board would be little more than a shell for its Virginia affiliate, which has so far failed to gain federal nonprofit status despite nearly five years of trying.

Imagine officials strongly denied those claims, asking the Florida Department of Education to settle the matter and declare all of its schools -- including those in Pasco and Pinellas counties -- to be legal nonprofits.

In its Tuesday ruling, the department said it was the job of local school districts to determine the nonprofit status of charter schools, which use public funds but operate independently of the districts that sponsor them.

Officials said they would launch a formal rulemaking effort to define "nonprofit" under Florida's charter school law. But they suggested they would hew closely to the federal definition, requiring either 501(c)(3) status or clear evidence that a company distributes "no part of its income or profit...to members, directors, or officers."

UPDATE:

Karl Huber, Imagine's development director for Florida, issued a response following posting of this item:

"Although we had hoped the DOE's declaratory statement ("the Statement") would definitively settle our LLC nonprofit status as we had petitioned, I want to clarify that, the Statement is, nevertheless, quite helpful to us on several fronts.

"First, contrary to your assertion that the decision of the Hillsborough County School Board may put in jeopardy the legality of our existing charters, the DOE statement emphasizes that it is responsibility of individual school districts to make this determination on a case by case basis. Thus, for example, since neither the Pinellas or Pasco County school boards have any concerns on our non-profit status, there is in fact no issue as to the nonprofit status of our schools in these counties.

"Second, the Statement accepts our assertion that an entity does not have to be a "non-profit corporation" in order to qualify as a "nonprofit organization" and provides general guidance as to the definition by quoting the four-part nonprofit organization definition that i) Imagine has been using to support our position and ii) which is already in Florida rules (for another agency). The Statement characterizes this definition as the commonly accepted definition of a nonprofit organization and goes on to state that when the DOE goes into rulemaking and that ISNP can presume that DOE will use this commonly accepted definition as a starting point.

"Third despite Mr. Tom Gonzales' assertion that LLC's cannot under any circumstances be considered 'nonprofit organizations' under the Statute, the Statement specifically states in paragraph 11 that, 'It is possible that such organizations [ISNP's LLCs] may qualify as a "nonprofit organization" within the meaning of Section 1002.33(12)(i), F.S., subject to a case by case analysis of the actual business practices described in Paragraph 8 above.'

"In conclusion, the Statement supports our position that all of our existing Imagine LLCs in Florida, as approved by the applicable school boards, qualify as "nonprofit organizations" within the meaning of the Florida Charter Law and indicates that we can look forward to the rulemaking process which should finally resolve this issue in our favor. In the meantime we expect to proceed with charters in other counties around in the state where the more commonly held definition of a nonprofit organization is accepted."

Tom Marshall is a St Petersburg Times staff writer


— Tom Marshall
Tampa Bay.com blog
2010-01-05
http://blogs.tampabay.com/schools/2010/01/florida-sets-high-bar-on-imagine-schools-nonprofit-status.html#more

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