Carole Carlson and Meredith Colias-Pete, Post-Tribune
Students in Indiana’s poorest school district have the state’s richest education foundation behind them.
Federal IRS records show the Gary Educational Development Foundation posted assets of more than $5 million in 2017. That is about $2 million more than public school foundations in larger school districts in Indianapolis and Evansville.
Nearly every Lake and Porter county school district has an education foundation with those for Duneland, Lake Central, Hammond, Munster, Merrillville and Valparaiso schools typically granting seed money for ambitious classroom projects. Fort Wayne's foundation used money to buy musical instruments and helped cover property taxes and insurance for a paralyzed former student.
Gary’s nonprofit foundation amassed its wealth as the school district’s fortunes plummeted, leaving it on life support after a 2017 state takeover. Overseen by the state’s lone emergency manager and sustained by state loans, the district has laid off dozens of employees as lawmakers stripped authority from its elected school board.
Meanwhile, the foundation boosted graduates with dozens of scholarship offerings and classroom grants.
Gary foundation officials and board members explain the nest egg as primarily a function of age and shrewd investing. The foundation was recognized by the state as a nonprofit organization in 1975, nearly a decade ahead of the Indianapolis Public Schools Foundation, established in 1984.
A 1991 Wirt High graduate, Christopher Tonk, 45, used his $2,000 foundation scholarship at Purdue University.
“My parents were both school teachers and we really didn’t have a lot of money,” he said. “I was the middle child, my older brother went to Purdue and my younger brother went to Marquette. The money helped a lot.”
Tonk earned a degree in electrical engineering and has worked at Owens-Illinois, a bottling company, since graduation. He’s now a plant manager in Towana, Va.
“I graduated from college debt-free,” he said.
Over the past decades, Gary school enrollment has been in freefall. After state legislators enacted a charter school law in 2001, enrollment dropped nearly 80 percent to about 4,300 as of Sept. 4. Today, there are 10 charter schools in the city, siphoning off nearly 5,500 students from the district that’s been maligned for poor academic performance and financial struggles. Another 1,200 students attend public schools in other districts and nearly 600 are in private voucher-supported schools.
The foundation experienced more robust times as investments snowballed into a sizable portfolio.
A board of 17 meets regularly and a team of members interviews scholarship applicants. Gary’s superintendent is usually a member, but emergency manager Peggy Hinckley named her chief financial officer Leonard Moody to the board.
Gary’s shrinking enrollment is good news for students because there’s more money to spread around for scholarships and to support school initiatives, said director Charius M. Haney, who’s run the foundation since 2008. Scholarships are limited to Gary Community School Corp. students only.
“The ask is getting smaller, there’s not as many students,” said GlenEva Dunham, a foundation board member and president of the Gary Teachers Union.
Last month, the foundation awarded 70 scholarships totaling $109,700 to 34 students. The lowest amount awarded was $500. West Side Leadership Academy senior Antwanae’ Jones racked up the biggest amount — four scholarships totaling $18,200.
The foundation also granted nearly $10,000 to teachers and students for enrichment programs and activities, Haney said. It also provides grants of up to $2,000 for building improvement projects. Marquette and Beveridge elementaries are recent beneficiaries.
The foundation’s largesse allows outside-the-classroom experiences for students. Recently, Wirt-Emerson School of Visual and Performing Arts orchestra students performed in China and students went to a Women’s National Basketball League game in Chicago with foundation help.
The foundation benefited from a state license plate program begun more than 20 years ago. The Indiana Department of Education offered a specialty plate for an additional cost with the purchaser selecting a school district and its foundation to receive 75 percent of the fee. And Gary was among only a handful of foundations, Haney said.
Also, Gary employees have the option of earmarking money from their paychecks to the foundation and many contributed regularly, which helped build assets.
The foundation has two paid employees, down from five in 2014. Haney made $12,195 last year and administrator Kira Taylor earned $53,823. Both are bonded and insured. Haney said they don’t receive health benefits.
Haney and Taylor work in a pair of rent-free rooms within the district’s central office at 1988 Polk St. There’s a laptop and copy machine. Copies of scholarship and grant applications are near the front door.
The foundation maintains its stability by operating on its investment income. “We don’t touch the principal,” Haney said. “Our risk is low, but it’s in line with other foundations.”
In 2017, investment income totaled $587,000 — more than the total assets of foundations in Merrillville, Valparaiso, and Duneland school districts.
“We used to be run by volunteers,” said Haney. “After you get so much money, that’s not possible. Anything over $3 million, you need someone there 24/7.”
Foundation board member Nellie Moore, who’s also president of the school board and a retired educator, said Haney is just the second paid director in the foundation’s history. As the school district’s finances became more imperiled, the foundation trimmed its costs, which in 2014 included five positions at $141,004.
Taylor receives all the foundation’s funding and donations. There is an audit every other year.
“We have controls in place. We’re completely transparent,” said Haney.
Taylor also tracks scholarship spending for nearly 100 students, about 80 percent of whom are at four-year colleges.
“We try not to turn anyone away,” Haney said. “We used to have 60 or 70 students (who receive scholarships), now it’s down to 35. Everyone walks away with something.”