Hi Judy,From the information you've given us, I can see nothing morally, legally, or ethically wrong with the venture. Profit is innuring to no one on the school board, no one on the foundation board, no one that I can determine from the facts you've presented.
The legal bounds of free acts of nonprofits are hinged on "who benefits" from the transaction. For instance, if the chair of the steering committee was an organizational development consultant and was influencing the steering committee to lobby for this money so as to unduly line his or her pockets, I would agree with you that something unethical was going on. From what you've said, such scenarios simply are not happening.
Is the gambol wrong-headed. Perhaps. But in the exploration of the topic of its misdirection, we encounter much more dire questions than the final disposition of $750,000. No fundraising campaign can succeed if those who conceive of it do not support it. You've said that one of the school board members has remarked that she would not contribute to the new organization because it was for the school. Why would such a person be sitting on your school board? Doesn't she think the school board is "for the school"?
At any rate, considering the question of community support for the venture as a legal or ethical ramification does not help clarify the discussion.
It is legal and ethical for a public authority (the school board) to give another entity (the steering committee) the authority and charge to develop a plan for the establishment of a public charity (the foundation.) Legal concerns ask the "reasonable person" test: Is it reasonable for three members of the school board to sit on the steering committee of a school foundation and make recommendations to the school board about the forming of a school foundation. The legal, moral, and ethical answer is, "Yes."
Secondly, is it reasonable for the school board to invest "x" amount of money in the formation of the foundation? The answer again is "Yes."
Thirdly, would a reasonable person invest such sums of money in the hope of acquiring other money. And again, the answer is "Yes." Anyone would invest $750,000 to acquire $3 million over a three year period.
Is such a foundation the wish and desire of the community? That is not a legal, ethical, or moral question. That is a political question. And the only place it will be answered is at the polls when the community next elects its school board.
My 2 cents.
Carl
