[Avodah] School Tuition + Fundraising

[kennethgmiller at juno.com]

R' Rich Wolpoe asked about how many schools structure their fees:

>Instead of asking for a lump sum - say $10,000, you sometimes get
> $500 journal ad
> $1500 "scholarship" donation
> $500 registration
> $2000 "scrip" obligation (worth $100)
> $500 raffle
> Etc.
> And finally the remainder is the "tuition"
> But any "honest" accountant will tell you it's all tuition
> and none is deductible.
> So what's the point? 

There are several points. Just as the city, state, and country tax you in many different ways in order to achieve some sort of fairness, schools also try to do that sort of thing.

One simple example is an attempt to have a discount when a family has more than one child in the school. Some schools do that by offering an outright discount.  Others charge full tuition for all students, but also imposing some other fee (such as the journal ad) upon the whole family only once. This accomplishes the same thing as charging more for one child and less for the others, but to many people it can appear more palatable.

Registration fees help offset the costs of a student who applies, but does not attend. Outsiders don't realize how much work goes into procesing all that paperwork, and it's gotta get offset somehow. Ditto for the fee to apply for a scholarship.

On the presumption (ususally valid but not always) that families will be spending a certain amount each month in certain stores, scrip is a way for the school to profit without forcing the family to spend even a penny more than they would have spent anyway. (Any listmembers who are not familiar with how this works, write me offline.)

Regarding deductibility from one's taxes, I am not an accountant or tax lawyer, but it is clear to me that the scrip fee and tuition are not deductible. But I've heard arguments that under certain circumstances, the "scholarship donation" very well might be. Similarly, I have vague recollections (it was decades ago) that I was able to deduct the afterschool fees.

So it seems rather simple to me that most of this itemizing is done for good reasons.

Akiva Miller

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