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Florida Voucher Nonprofit, Step Up for Students: A Tale of 15 Tax Forms

March 10, 2017

Step Up for Students (Step Up) is the Florida nonprofit founded by venture capitalist John Kirtley (see his bio here). Until 2011, Step Up was known as the Florida School Choice Fund (FSCF), which officially became a nonprofit in July 2000.

In recent news, the former Florida voucher student whom Donald Trump featured in his February 28, 2017, Congressional address, Denisha Merriweather, was both former Step Up student and employee.

Step Up oversees Florida’s round-about private school voucher program known as a “tax credit” program. Through tax credits, both corporations and wealthy individuals are able to donate money directly to a “scholarship fund” in exchange for tax credits. The state ends up with less revenue than it would if it did not offer such credit, but allowing private entities to put the cash directly into the fund and receive a tax break afterward is a clever means of keeping the label “public” off of the money that is donated even as the amount of public funds in the public coffers is lowered in the name of “tax credit.”

The Step Up for Students website calls such a practice “redirecting tax obligations”:

In 1998, a young Tampa venture capitalist named John Kirtley discovered the lack of educational options available for low-income children and took matters into his own hands. Kirtley, working with the national Children’s Scholarship Fund, created the Children’s Scholarship Fund of Tampa Bay to provide privately funded scholarships for low-income children to attend a K-8 school of their choice. …

With Kirtley’s help, [Florida] lawmakers in 2001 created the Florida Tax Credit Scholarship Program. The program gave corporations credit for redirecting their state tax obligations toward K-12 scholarships that helped low-income families send their children to participating private schools or to public schools outside their districts.

Note that the FSCF/ Step Up max amount to send students to public schools out of district is $500 for transportation. The primary purpose of the tax credit is to send students to private schools, as the same web page proudly highlights:

Today, Step Up serves more than 97,926 FTC [Florida Tax Credit] students in more than 1,712 private schools throughout Florida.

There is no such web site highlight regarding the number of students who attend out-of-district public schools.

Step Up for Students also doesn’t mention the wealthy individuals who are able to donate even though according to the organization’s tax forms, wealthy individuals have donated. In fact, donations from a single wealthy individual comprised almost all of FSCF’s 2001 funding.

I read the tax forms, and I offer them here for any who wish to peruse them:

FSCF 2001 990  FSCF 2002 990  FSCF 2003 990  FSCF 2004 990  FSCF 2005 990  FSCF 2006 990  FSCF 2007 990  FSCF 2008 990  FSCF 2009 990  FSCF 2010 990  SUFS 2011 990  SUFS 2012 990  SUFS 2013 990  SUFS 2014 990  SUFS 2015 990

I will not dissect all of the above tax forms in this post. It would be too much, and too dry. However, I will offer some highlights and curiosities:

To begin, in 2001, FSCF (later Step Up, remember) listed almost $4.8 million in contributions, almost all of it ($4 million) deriving from a single contributor– a person, not a corporation. FSCF conceals the name of the contributor. Given that John Walton pledged $50 million to a similar Oklahoma effort in 2002, I wonder if that $4 million was Walton money. Just a thought.

Still, what is clear is that the FSCF start-up funding came from an individual, not a corporation.

In 2001, FSCF was clear about its purpose in sending students to private (not public) schools, and not just in Florida:

Provide economic and other assistance to private schools which carry out their educational missions from physical facilities located in inner city areas throughout the United States and which are also, in large part, not-for-profit institutions.

We’ll return later to the beyond-Florida goals of FSCF/ Step Up.

As for service accomplishments in 2001:

The Organization provided scholarships to 144 schools and educational providers to enable students, who could not afford to otherwise, to attend private schools in inner city areas.

In 2002, FSCF began spending money on “school expansion” (57 schools; $4.5 million). There was also a shift in FSCF’s 2002 “primary exempt purpose”– from helping students to helping schools:

Provide economic and other assistance to private schools which carry out their educational missions from physical facilities located in inner city areas throughout the United States and which are also, in large part, not-for-profit institutions.

In 2002, FSCF still spent much of its revenue on private school attendance ($5.8 million for 3,512 students at 445 schools).

In 2003, the FSCF primary tax exempt purpose had shifted yet again, to include both schools and the students:

Provide economic and other assistance to low income parents in Florida to enable them to select the best schools for their children, and to help private schools in low income areas expand their capacity to serve these children.

School expansion efforts still happened in 2003, but only a handful (5 schools, $119,000). It spent $4.7 million for 3,073 students to attend 284 schools. From 2004 to 2015, most revenue by far was spent on scholarships as opposed to school expansion.

FSCF’s revenue (derived from “direct contributions”) jumped to $22.3 million (2004); $26.4 million (2005); $42.3 million (2006); $33.4 million (2007), and $41.4 million (2008). Then, a dip in 2009: $33.6 million in direct contributions. (Recall that corporate greed took a bite out of the 2008 economy.) In 2010, direct contributions jumped again: $91.5 million.

Also in 2009, the FSCF mission statement was revised to include the public-school-tinted term, “K-12 education.” Too, the term, “private school” was replaced by the general term, “learning options,” among other generalities that avoid identifying FSCF as a private school voucher program. And no more verbiage about school expansion assistance:

The mission of Florida School Choice Fund, Inc. is to foster improvement in K-12 education in Florida through parental choice programs. FSCF believes that educational option programs spur improvements by equipping all of Florida’s parents with the tools to seek the best education for their children. The Fund’s primary focus is in providing learning options for children from low-income and working class families.

In 2010, the FSCF mission statement became considerably shorter:

The mission of the Florida School Choice Fund is to ensure that economically disadvantaged families have an equal opportunity to the K-12 learning options they need to effectively educate their children.

Also in 2010 comes the “test score gains” sales pitch (AKA we’re breaking even in general):

The fund provided scholarships to 27,593 underprivileged students to attend 1,033 different private schools across the state in 2009-10 The average household income of these students is only 17 percent above the federal poverty level Three-fifths of them live in single-parent households, three-fourths of them are black or Hispanic A state research report released in June said that the students who choose the scholarship are among the poorest and lowest-achieving students in the public schools they left behind In 2008-09, these students achieved the same reading and math standardized test score gains as those of all income levels nationally. Florida Gov Charlie Crist remarked that the scholarship “offers families an invaluable opportunity to choose a learning environment that gives their children the best chance for success.”

FSCF paints itself as a success via test score gains. More on this to come. Let’s first finish with the FSCF/Step Up tax form highlights.

By 2010, Kirtley had stepped aside as president but was still on the FSCF board as “chairman.”

We’re now at 2011; FSCF is now Step Up for Students. Its direct contributions jumped by an additional $100 million from 2010 ($91.5 million) to 2011 ($191.8 million). And, here we go with another revised mission statement:

Step Up for Students provides legislatively-authorized K-12 scholarships and related support to give economically disadvantaged families the freedom to choose the best learning options for their children.

In 2011, Step Up spent $134.7 million for “more than 38,000 underprivileged students to attend roughly 1,200 different private schools across the state of Florida” via a scholarship program “created to help alleviate the enormous educational challenges faced by children who live in poverty.”

In 2012, Step Up reported contributions and grants of $267.5 million. That year, Step Up spent $148.6 million to send “more than 40,000” to those “more than 1,200 private schools. In 2012, Step Up also spent over $1.5 million “to provide support for the building of infrastructure necessary to grow the Florida Tax Credit Scholarship Program to over 50,000 students by 2014.” By “infrastructure,” Step Up apparently meant investing in more private school seats.

In 2013, Step Up contributions and grants rose to $310.8 million, with $209.7 million spent on “choosing a school”– with the word “private” dropped in order to combine students receiving the at-most $500 out-of-district public school transportation voucher with the predominately private-school attending students. Such lumping together of all students allowed for 51,075 students to be nebulously “on scholarship.”

The year 2013 was also the first in which Step Up included extensive explanation of the wonder of its gain scores on its tax form. An excerpt:

Standardized test scores released in August 2012 showed that students and schools in the program were holding their own against the rest of the nation. … The results in 2010-11 tracked closely with results in prior years… Students who chose the scholarship were among the poorest and lowest-performing students from the public schools they left behind. These same students achieved gains in reading and math that were the same as all students nationally, regardless of income level. These students also achieved the same gains as public school students on free or reduced-lunch programs, even though the public school group had higher incomes than the scholarship students and were performing at higher levels in prior years.

So, the voucher program is successful because it ties in lesser student gains than those achieved by public school students in previous years. Got that?

Incidentally, the Step Up statement about a the public schools “performing at higher levels in prior years” remained as part of Step Up’s 2014 return but was dropped from its 2015 return.

There are other important pieces regarding the nuances of Step Up’s gain score comparisons, not the least of which is the fact that these are averaged student gains. When one considers gains by school, the story isn’t so rosy. Some schools yielded better than average gain scores, and others, well….

I’ll have to save it for a second post.

In 2013, Step Up did spend almost $500,000 “offering [partnership schools] free professional development.” Apparently the schools that take part in this professional development are called “Success Partners.” In 2014, the amount Step Up spent on Success Partners rose to $1.2 million.

A comical component of this professional development involves pitching the “Florida standards”– which Step Up promotes as “a national initiative of uniform academic standards”– without using the term, “Common Core”:

The capstone of Success Partners is an interactive, learning compact designed to give teachers, families and students a way to utilize the Florida state standards…. These standards are a national initiative of uniform academic benchmarks adopted in 45 states, four territories and the District of Columbia for grades Kindergarten through 12th to ensure that students are ready for careers and college.

This “Success Partners” effort appears to be enlisting private schools to follow the success-guaranteeing Common Core that Florida’s public schools are following– the same public schools from which Step Up is trying to rescue the lowest performers. If Common Core were a guarantee, why leave the Florida public schools for private schools? And if Common Core is not really a guaranteed “careers and college readiness,” then why try to get private schools to buy into them?

Step Up is entangled in its own sales pitch.

In 2013, Step Up also spent over $1 million on a “data warehouse” so that it might “inform scholarship parents, participating schools, the general public and policymakers about the academic progress of scholarship students and shed light on pathways to academic improvement.”

In 2014, the data warehouse cost Step Up $2.5 million.

One way to shed light is to stop selling this voucher program as a generalized success and publicly admit that the participating private schools are all over the map as concerns their gain scores, with many *gaining* backwards.

But I am ahead of myself. A second post, a second post….

In 2014, Step Up reported contributions and grants of $332.4 million, with 59,992 underprivileged students attending 1,429 private schools. But the news in 2014 was that Step Up had finally taken its 2001-voiced national ambitions to another state– Alabama– for the price of $2.6 million:

Alabama Opportunity Scholarship Fund (AOSF) is a scholarship-granting organization serving low-income students, with priority given to children who are assigned to struggling public schools. The scholarship is used to pay for private tuition or transfer fees to a non-failing public school. The first scholarships were granted for the semester starting January 2014, and scholarships continue to be awarded for the 2014-15 school year. Nearly 12,000 children applied for one of about 3,500 scholarship awards. The scholarships are funded by corporate and individual contributions that receive state tax credits from Alabama.

On its 2014 tax form, Step Up is listed as the direct controlling entity for the Alabama Opportunity Scholarship Fund, which it also notes had a 2014 total income of $15.1 million.

The AOSF web site does not disclose that Step Up is the direct controlling entity for AOSF, not even in the bios of the three Step Up board members on the AOSF board.

(Step Up’s 2014 tax form indicates that five of its board members are affiliated with AOSF. That number increases to six for 2015, with one departing Step Up in March 2015.)

The Step Up web site also fails to mention any connection to AOSF.

In 2015, Step Up’s AOSF funding was $15.3 million, but its total income as a Step Up-controlled entity was listed as $12.3 million.

Also in 2015, Step Up raised $456.3 million in contributions and grants and reported 69,950 students attending 1,533 private schools at a cost of $351.6 million.

It also spent $1.5 million to add a new scholarship, a “personal learning scholarship account” for students with certain special needs (e.g., autism, cerebral palsy, Down’s syndrome); in 2015, 1,696 students received an average of $10,000 for use on “schools, therapists, specialists, curriculum– even a college savings account.”

But this is surely enough for a single post.

More to come on those gain scores. Stay tuned.


Want to read more about the history of charter schools and vouchers?

School Choice: The End of Public Education? 

school choice cover  (Click image to enlarge)

Schneider is a southern Louisiana native, career teacher, trained researcher, and author of two other books: A Chronicle of Echoes: Who’s Who In the Implosion of American Public Education and Common Core Dilemma: Who Owns Our Schools?.

both books

Don’t care to buy from Amazon? Purchase my books from Powell’s City of Books instead.

  1. Excellent job as usual Mercedes breaking this all down for us. One thing is for certain – their mission statement is not to “help” or “assist” kids as they proclaim it is. Their goal/mission statement is to assist themselves and help themselves by increasing their return on THEIR investment. I did a Muckety map on the “Florida School Choice Fund” (FSCF) and it’s like a slap in the face. All the usual culprits are on the maps – Bill & Melinda Gates foundation, Walton Foundation (they started it actually), Broad Foundation, and of course Jeb himself along with dozens of family members, the Jeb Bush & Associates, both his foundations (Foundation for Excellence in Education (FEE) and Florida’s Future Foundation (FFF). There are a few names that were rather surprising (or maybe not so surprising) like Betsy DeVos, Campbell Brown, Warren Buffet, Patricia Levesque (from Jeb’s FEE) and the United Against Nuclear Iran. There are literally HUNDREDS if not THOUSANDS of “investors” investing in our kids. There is one company/investor that comes up continuously when I do any research at all on anything remotely tied to Common Core and that is the “New Venture Fund”. Take a look at the maps (if you can stomach them). THANK YOU again Mercedes for exposing this scam laden fraudulent scheme dreamed up by Jeb as usual. Florida is ground zero for all this garbage where they then direct ALEC to vote these policies and programs into place in other states. Patricia Levesque from Jeb’s foundation (FEE) “helps” the states write the legislation for their states and they also help them get around any “hurdles” they have to overcome. It’s bad enough that we have to deal with these corrupt politician’s whose only interest is their own and making money $$$$$ off our kids – they are not “helping” our kids as they proclaim. It’s all lies as they hide behind their fake scheme to help our kids. They are cowards and liars.

  2. In spending years trying to analyze what “went wrong” with our district once NCLB became law, I began to get an inkling that the reason so much “change” profiteering succeeded in school reform was that it was hidden/camouflaged by its very lack of logic. Much like the housing/leveraging bubble which took down the economy in 2008—a crash created as multiple individuals played the system for their own personal gain—the goal for most reformers has become not actual help for kids or teachers, but a forever shifting series of short-term money grabs for this person or that.

  3. Laura H. Chapman permalink

    A state research report released in June said that the students who choose the scholarship are among the poorest and lowest-achieving students in the public schools they left behind In 2008-09, these students achieved the same reading and math standardized test score gains as those of all income levels nationally.

    I look foreward to your treatment of this research report. I have seen variants of these comparisons before. Pure mud.

Trackbacks & Pingbacks

  1. Sometimes Florida Voucher School Gain Scores Are, Uh, Negative… | deutsch29
  2. Mercedes Schneider Reviews the Tax Filings of Florida’s “Step Up for Students” Voucher Program | Diane Ravitch's blog

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