For-Profit Schools

Why?

The Community Foundation must execute expenditure responsibility for any grant made to a for-profit institution. Grants/scholarships can be made to for-profit organizations for charitable, scientific or educational purposes, but since the grantee is not inherently charitable, the Community Foundation must take additional steps to ensure that the dollars granted are being used charitably.

According to the Community Foundations’ National Standards Board, the Community Foundation must 1) Conduct a pre-grant inquiry, 2) Execute a written agreement with the grantee (the school), 3) Require the school to maintain the grant funds in a separate fund so that charitable funds are segregated from non-charitable funds, and 4) Require the grantee to provide regular reports on the use of the funds and the charitable activity supported by the grant. If the school is unwilling to agree to any of these steps, the Community Foundation will not be able to award the scholarship.

Some Community Foundations have a policy against awarding grants to any for-profit school, not only because of the expense to the Foundation of the additional and ongoing administrative tasks associated with these educational grants, but also because of some of the questionable recruitment, advertising, and other operating practices of some for-profit schools.

For now, the Kosciusko County Community Foundation will continue to award scholarships to students pursuing educational programs from accredited for-profit schools (unless the donor of the scholarship fund has instructed us not to do so in the fund agreement, which is sometimes the case).

What is a For-Profit School?

According to The College Board, a for-profit school is a business that offers a variety of degree programs to prepare students for specific careers. For-profit schools, like other for-profit businesses, are designed to make money for their owners. For-profit schools tend to have higher costs for students than public or non-profit schools. In fact, the CollegeBoard published data from 2011-12 that said for dependent students in the lower half of income distribution (financially needy students), the average net tuition and fee price in the for-profit sector was higher than in private nonprofit institutions in all price categories.