Pushing the 501(c)3 Envelope: Nonprofit Formed to Boost Image of Arizona Public Schools System

Images of teachers in a classroom and students huddled around computers are designed to paint a pretty picture of the Arizona state’s public schools system. The cheerful 30-second advertisement on television and across the internet are paid for by a newly formed nonprofit corporation called the Arizona Education Project.

Matthew Benson, a spokesperson for the 501(c)3 nonprofit group, said the ads are not tied to any political candidate or legislative effort but are instead intended to counter the narrative set by critics who question the commitment of state leaders to fund public education.

Libby Hikind, founder and CEO of the nonprofit funding resource Grantwatch.com said, "Any investment in education must be combined with accountability.  Grants for education usually include an evaluation component, to prove the project or program did in fact make a difference and would be replicable in another location with a similar target audience. 

Nonprofits are typically identified with charitable organizations. The IRS recognizes 27 types of nonprofit organizations including educational associations. In general, nonprofits are formed to serve the public in some way and, as a result, they receive special benefits and tax breaks from the state. Eligibility requirements vary by state.

According to the IRS, 501c(3) organizations that qualify for tax credits at the state level may not always be eligible for exemptions and benefits from the federal government. Not all nonprofits are 501(c)3 registered with the IRS as tax-exempt by virtue of their charitable programs. Nonprofit simply means the entity, usually, a corporation is organized for a nonprofit purpose.

Except for the tax burdens, nonprofits operate much like traditional corporations. They are supported by the sale of their goods and services, charitable donations, and grants from other nonprofits including federal and state agencies and public and private corporations and foundations.

Donors to the Arizona Education Project include some heavy hitters in support of public schools, such as the Arizona Chamber of Commerce and Industry and the Hispanic Chambers from Tucson, Douglas, Sierra Vista and Nogales. Money also is coming from the Arizona Lodging and Tourism Association and the Services Group of America, a private firm involved in food distribution. Other donors include Pinnacle West Capital Corp. which owns Arizona Public Service Co., the state’s largest electric utility.

The Arizona Education Project has spent a portion of this support on a website and the local TV, cable and digital ads that outline positive aspects of Arizona’s K-12 system. Spending on Arizona schools plummeted during the Great Recession, and the state has yet to return to the levels before the economy tanked. Arizona schools also rank among the lowest in the nation for teacher pay.

Benson said, the group’s “message is pretty simple: Arizona schools aren’t perfect, but we’re making a lot of progress and too often in the current climate, that gets lost.”

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About the Author: Staff Writer for GrantWatch.com

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