State government efforts to set up foundations to encourage businesses to pledge financial support to state schools won’t fix a system in need of root and branch reform, according to the CEO of a not-for-profit organisation that helps people and businesses donate cash.

The Business Working with Education Foundation announced this week by the Victorian government, and the Public Education Foundation established by the NSW government in March last year, can receive tax deductible donations from businesses that want to support public schools.

But businesses and individuals making donations direct to public schools don’t get the discount.

There's more to Crikey than you think.

Get more and save 50%.

Subscribe now

“The motivation [for the foundations] is spot on but it doesn’t deal with the big elephant in the room. It doesn’t deal with the fundamental issue of deductibility, which is a federal tax law issue,” said Sarah Davies, CEO of the Melbourne Community Foundation.

Davies described the restriction on tax deductible donations to public schools as “ridiculous” and “archaic”.

Unlike independent schools, which are able to generate millions of dollars from tax-deductible donations, public schools are not considered ‘charitable organisations’ under federal tax laws.

“The reason state primary and secondary schools are not considered ‘charitable organisations’ is that they are predominantly government-funded. But at the tertiary level, with universities … you can give tax deductible donations, even though they’re largely publicly funded and are public institutions,” she said. “I don’t think there’s a coherent logic there.”

Furthermore, while foundations for public schools provide a way for businesses to make tax-deductible donations to public schools, these foundations do not address the restriction on donations from individuals.

“Corporations [that donate to these foundations] can claim a deduction for charitable giving against their business expenses but that’s very different to a person claiming a tax deduction for a gift. These are different areas of tax,” Davies said. “So while I think … it’s fabulous to build better partnerships between business and public schools … what is really needed is a reassessment of federal tax laws.”

According to Davies, corporate and business support of the public education system in the UK has been “incredibly successful” but “not without controversy”.

“Questions arise around policy, control and influence, but … that doesn’t mean we shouldn’t pursue it. We just need to be thoughtful about it,” she said.  “We need to ask how do we protect the broad public interest and public access to quality education and opportunity but at the same time encourage greater participation and support from a broad set of community players. The point is to incentivise giving to help build the community asset that is our public education system.”

President of the South Australian Association of School Parents Clubs, Jenice Zerna, said the association would want to know how increased funding from business would impact government funding for public education: “Is that going to stop funding coming to the schools from government? What sort of influence are businesses going to want and is that going to affect the curriculum and learning? That would be our concern.”

Jenni Neary, chair of the Public Education Foundation of NSW, which granted its first scholarships to public school students this year, said the Foundation was reluctant to get into a debate over whether the Foundation was substituting government funds.

“It’s not substituting funds, it’s adding money … Because it’s specifically not for the things government fund, it doesn’t impact government spending. The system itself funds buildings, teachers, facilities and so on, but not individual students, which is what our job is,” Neary said.

Like Victoria’s Business Working with Education Foundation, the NSW foundation is prohibited under national tax laws from spending funds on capital works — a restriction that, according to The Age, highlights “more than anything” the inequity between public and private school funding.

Both foundations have been established to help redress the inequity in corporate donations to public schools, but just how much impact these organisations will make is unclear. Neary admits that the sums of money the Foundation deals with — currently in the tens of thousands — are relatively small and must stretch much further than the millions raised by private schools.

“We’re covering the whole state system so obviously it’s not comparable to the kind of money raised by private schools, but over time these foundations grow,” she said. No such foundations exist for public schools in other Australian jurisdictions.

John Hassed, Deputy Chief Executive of Tertiary, Corporate and Portfolio Services in the Northern Territory Department of Education and Training, told Crikey that “positive relationships between businesses and school councils are encouraged”, but there are no formal structures to assist businesses to make donations to public schools. “It is a matter between the particular business and the school,” he said.

The story is much the same in Tasmania, Queensland, South Australia and Western Australia.

Robert Fry, president of the Western Australian Council of State School Organisations said businesses in the mining sector give “generously” to public schools in the Pilbara region, but private schools “would do exceptionally better than public schools in terms of support from business”.

He said he didn’t think states should actively pursue corporate support of public education: “Working with business is positive and benefits the schools and the kids but … at the end of the day it’s up to government to provide an education system.”

There's more to Crikey than you think.

It’s more than a newsletter. It’s where readers expect more – fearless journalism from a truly independent perspective. We don’t pander to anyone’s party biases. We question everything, explore the uncomfortable and dig deeper.

And now you get more from your membership than ever before.

Peter Fray
Peter Fray
Editor-in-chief of Crikey
Get more and save 50%