Blogger Crooks & Liars asks why Michelle Rhee’s StudentsFirst is a nonprofit.
He writes: “If ever there was an organization that stands out as one that should never have been granted nonprofit status and doesn’t deserve to continue having it, it’s StudentsFirst. One look at their 2011 tax disclosures reveals a fat, political, ideological organization. StudentsFirst not only crosses the line, they stomp on it and erase it for their own benefit.”
Nonprofits are allowed to do some advocacy, but as I understand the tax law (let me be the first to say that only tax lawyers understand the tax law and even they sometimes need help figuring it out), nonprofits are not supposed to lobby directly for legislation. Or, maybe do it just a little bit. Or maybe pretend they are advocating but not lobbying.
The tax laws and tax code make no sense. if you view the universe of nonprofits actively lobbying for vouchers, charters, tax breaks, or seeking appropriations and earmarks for entrepreneurs, it makes no sense that they are classified as nonprofits. Some nonprofits lobby on behalf of for-profit corporations, which make handsome donations to the nonprofits.
In some quarters, what is called “reform” is driven by big money, not what is best for students. Yes, Virginia, there is an education industry, and it is like any other industry: it wants a return on its investments.
Diane Ravitch's blog 
Tax “law” allowing the corporate state to fleece the public by such jackals? Shocking, ain’t it? When tax law allows the Romneys of the nation to hide their treasure, like their pirate ancestors, in island hide aways, they system is rigged to the max and the public pays the price in a truly million/billion/trillion ways! “Cooking the books” is now reduced to child’s play. Just this week our farcical, corporate bought Congress passed a little kick back to their members. Their flag waving “patriotic” members stand to make a killing on the particulars of the FARM BILL…check it out, it ought to make the nation SCREAM in protest! BUT, sadly, it won’t…never does. The destruction of the middle class is just one result of the plutocracy that serves its own ravenous raids on the 99%.
Haven’t they ever heard of “Killing the goose that laid the golden eggs?” Must have missed that fable in their posh, private prep school educations!
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I think there are larger forces at play than US tax policy.
Technological change has put a premium on some skills and discounted others. The integration of China into the world economy has been another important factor, but that has run its course with the rapid increases in wages in China and the decline in the size of the labor force in China.
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sweetpea,
Truer words were never spoken.
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The same could be said of Teach for America, TNTP, et al. which Rhee probably used as her models.
ALEC is the best example of a lobbying organization that is misclassified as a tax exempt non-profit. Common Cause filed a complaint about them with the IRS, but last I read that’s still pending: http://www.commoncause.org/site/apps/nlnet/content2.aspx?c=dkLNK1MQIwG&b=4773613&ct=11813857
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Thanks for your question. It help
reveal the purposely vague
aspects of the tax law as it applies to non-profits. This is for Diane: please
review the front page article on the
Rocketship school starting in Milwaukere in the fall. What ate your thoughts? I am a retired Wi teacher.
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I’m replying to myself. Never try to leave a comment when you are in a hurry. My spelling
is not indicative of my teaching skills nor training!
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Excellent post. Michelle Rhee rightly claims the title of Quenn of the Pseudo-Reformers.
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Nasty, mean, repressive Queen of the Pseufo-Reformers.
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All of the smartest lawyers I’ve ever met were big firm tax lawyers. It’s a certain kind of smart — like chess intelligence. But they’ve got it. Unfortunately for them, they spend most of their time being yelled at by the people who don’t want to hear why there are tax complications with whatever deal they want to finalize.
So I’m not ashamed to say that I also don’t understand tax law. But I do know that non-profits can lobby.
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As I understand it, there’s a difference between lobbying and partisan political advocacy in the eyes of the IRS, with the latter supposed to be taboo, and StudentsFirst engaging in both.
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You buy the law you want in this country. That is why there is the mess there is. Or you have to be very good at what you do and have luck. We are involved in a case right now in which CORE-CA is the only organization of any kind that will touch this employee civil rights case. The Amicus Brief is off tomorrow. Just like that and on time. This is the only way to win against the big power. If you want to know what is behind any organization of any kind just go to their website and look at their funders. Then go compare that list to the original ALEC and include now list and almost all line up. If you do not do what master says what happens? That is all there is too it.
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Why? Because they can. It makes them seem oh so altruistic!!! (all the while raking in the millions of mullah.)
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Just one quick note: The writer of the piece at C&L, Karoli, is a woman. You may want to fix the pronoun that begins your second paragraph.
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