The Tennessee Attorney General’s office has handed
down an opinion stating local school board’s do not have the
authority to donate money to non-profit organizations.
In Loudon County this ruling by the office of
Attorney General Robert E. Cooper, Jr., could spell trouble for the
Loudon County Education Foundation (LCEF).
During last year’s tense school board budget debates, a $16,000
donation to the Education Foundation was cut from the county
school’s budget. Last fall the board voted in favor of reinstating
the donation to the foundation. Board members Van Shaver and Lisa
Russell, while expressing admiration for the foundation, said they
did not think giving money to a nonprofit organization was
appropriate when other programs had to be cut from the budget.
Russell followed up on her objection by contacting the state
attorney general’s office and asking if a donations can be made from
a school board to non-profit organizations. According to the
attorney general’s opinion, school boards do not have the power to
donate funds to non-profit organizations.
The opinion reads, in part, “Tennessee Code Annotated § 49-2-203
defines the powers and duties of local school boards. Local school
boards do not have the power to donate from their general fund
budget to a 501(c)(3) non-profit organization pursuant to a local
school board’s enumerated powers.” The opinion also says, “the
Tennessee legislature has expressly provided authority to county and
municipal legislative bodies to make charitable contributions under
certain conditions. If the Tennessee legislature had intended to
provide authority to local school boards to make charitable
contributions, it would have expressly provided such authority.”
Susan Fox, chairwoman of the Loudon County Education Foundation sees
the opinion as a potential problem. “We are still digesting the
information. We do not consider as a board and a foundation that it
is a donation. We always considered our relationship with Lenoir
City Schools and Loudon County Schools as more of a partnership. We
provide services and programs to the students and the teachers,” Fox
said. While she said she can’t speak for the LCEF board she added,
“We would like clarification of the opinion.”
Superintendent of Lenoir City Schools Wayne Miller talked about the
situation as he was returning from meetings at the state capitol on
Thursday. He said this was the first time anyone had questioned the
LCEF receiving funds from the schools.
Lenoir City Schools is a separate system from the
county, though they also benefit from the Education Foundation.
“I checked on numerous occasions over several years.
I’ve always been told it was fine by attorney’s and even at one
point by the State Comptroller’s office,” he said. Miller thinks
this opinion might not be the last word on the subject. “I’m not so
sure that this doesn’t need to be reevaluated because if it strikes
a blow to the Education Foundation that we can’t recover from, then
we’ve done a real disservice to a lot of students and teachers in
Miller said he also feels there can be no objection to the work the
foundation does. He cited leadership classes, the scholarship
program, the Young Achiever’s banquet and the Teacher’s Resource
Center as examples of the foundation’s work.
“None of those things would be possible, and we can’t
sustain them as a school system without their support,” he said
adding, “100 percent of the two people who are employed, their time
is dedicated to preparing or administering a program.”
Miller said if a lack of funding leads to the loss of the Education
Foundation, there could be other problems such as losing the
county’s state designation as a “Three Star Community.” The
designation is awarded by the state and is much sought after by the
Loudon County Chamber of Commerce.
“The Education Foundation was a key component of
Loudon County being classified as a Three Star Community,” Miller
“It would be a huge loss of service. Given that the
County Commission is contemplating keeping growth money again and in
an environment when state money is not growing at all we can’t fill
that void,” Miller said adding that “teachers and administrators do
themselves a disservice when they are so frugal that people don’t
realize they are operating in a financial crisis.”
Shaver, who said the issue will be discussed at the May 7 school
board workshop, has been quoted as saying the foundation should pay
back the money they received from the school board but he said he
realizes that is not a realistic expectation since he assumes the
funds have long been spent.
“I think they should (pay back the money), but they don’t have it so
they can’t,” Shaver acknowledged. He said he feels the legal opinion
should settle the question for the upcoming budget debate. “There’s
no choice we cannot do it,” he said. While Shaver said he feels the
school board cannot contribute to the foundation, the organization
will get the funds from the county.
“I’m sure they will go to county commission and
county commission will give it to them. They’ll get their money from
somewhere but legally the schools cannot give money to non-profits,
we’ve got that clear and concise now,” Shaver said.
Lenoir City School Board member Rosemary Quillen didn’t mince words
in her support of the LCEF. “We could not do without the education
foundation. I know what the Education Foundation does for our
schools and I know they are struggling like everyone else with
money. I feel pulling $16,000 from them will be detrimental to what
they do for kids. I know they have a lot of support from businesses
and corporations but $16,000 is a big chunk of money. They do
wonderful things for kids,” she said citing the groups, the
leadership classes, Young Achievers and essay contests as just some
of the ways the foundation enriches education in the Lenoir City
Russell said until the attorney general issued this opinion,
Director of Loudon County Schools Wayne Honeycutt was correct in
going with the school board’s attorney’s opinion that the donation
“At that point no one knew that was the case,”
Russell said adding that the recent ruling should put the debate to
rest. She also has heard that the county may step into the void to
help the foundation out with county funds.
“I did hear that yesterday, I was informed that Tracy
(Blair, Loudon County’s director of accounts and budgets) was
looking into that,” she said.
Russell acknowledged the LCEF provides great service to Loudon
County and Lenoir City students and teachers.
“I know it’s a wonderful program and I do appreciate
all they do but I do not feel it’s up to us to fund them,” she