How Does Virginia Budget Early-Childhood-Education Money Wind Up in a Park in Detroit?

by James C. Sherlock – updated Oct 15

I’d like to report an organized crime. It’s just not illegal in Virginia.

The political Left, fully in control of Virginia government, sends taxpayer money to leftist non-profits, who take their cuts and then send it on to local government entities and yet more nonprofits.

It is unethical, but that does not matter to Virginia’s elected Democrats.

But they have set themselves up for a fall. They may not know enough about nonprofit reporting laws to understand it opens the tax money transfers up to public examination.

Federally required independent accountants of nonprofits won’t play along. When non-profits touch the money, they have to report it to the IRS on their annual Form 990’s, where we mere taxpayers can see it.

In this case we will trace early childhood education money from the Virginia budget to a park in Detroit.

Virginia Department of Education.  The Virginia Department of Education has a very large staff in the Division of Early Childhood Care and Education, including several grants managers.  (The Office of Child Care Health and Safety is newly transferred into VDOE from another Virginia agency).

Yet apparently VDOE was thought by the budget writers unsuited to manage all of Virginia’s early childhood education money.

I note that Dr. Lane, the Superintendent of Public Instruction, is appearing before the House Appropriations Committee on Monday, Oct. 18.  Perhaps he will comment on this.

Virginia Early Childhood Foundation (VECF). Enter the nonprofit Virginia Early Childhood Foundation (VECF). VECF “builds capacity for promoting young children’s school readiness.”

You will see in Virginia’s budget under “Direct Aid to Public Education
that VECF is getting over six million dollars a year from Virginia taxpayers. Education Secretary Qarni is on the board.  The Chairman of the board is a professional lobbyist.

You can also see on the VECF Form 990 when the state starting granting that money. Look at the difference in Total revenue, gains, and other support per audited financial statements between 2018 ($5,799,671) and 2019 ($12,233,018). The difference is $6.43 million, almost exactly the current state contribution.

You will further find on the same Form how the money was spent. VECF President Kathryn Glazer makes almost $200,000 a year. If you wonder whether she is a Democrat, see her op-ed in the RTD.

VECF Consulting Expenses.  VECF paid over $600,000 to three “Early Childhood Consulting” firms.

If the twenty-member staff and 17 Directors of VECF do not know enough about early childhood education to get by without three expensive consultants in one year, they should re-evaluate their organization.

One was Communitas Consulting in Charlottesville.

“Communitas Consulting specializes in developing the custom solutions and committed partnerships that help leaders at nonprofits, foundations, and government organizations implement and achieve their vision of success.”

Not for long. It folded after taking $252,000 from VECF in 2019.

The other two were SRI International and School Readiness Consulting.   Those two firms were also VDOE contractors in 2018-19.

Redistribution from VECF to local governments. Look at Schedule I towards the bottom of the form 990 and you will see how VECF redistributes some of that money. Some to school systems. So VECF serves as a cutout for state money going to local school districts. It gets to pick which ones get the money, and it takes its cut.

Redistribution from VECF to yet more nonprofits. Other amounts went from VECF to more nonprofits like Act for Alexandria, which received $360,000 in 2019. Act for Alexandria, too, had expenses to cover.

We go to Act for Alexandria’s 2020 Form 990 and we see it paid its CEO Heather Peeler $175,000 in 2019.

Act for Alexandria does some very good things, but this is not one of them.  I urge them to refuse money from the state or from any other source that takes money from the state.  It is a nasty business, and Act should not participate.

Redistribution from Act for Alexandria to another nonprofit — in Detroit. We also see in that Schedule I that Act for Alexandria’s biggest donation, $116,000 was to Recovery Park in Detroit. Recovery Park controls 60 acres on Detroit’s lower east side that are being used for urban farming.

Not sure why a Detroit nonprofit in the urban farming business winds up with Virginia Early Childhood Education money, but this is how.

Bottom line.  Quite a scheme. Much smoother than Tinker to Evers to Chance.

Lots of six-figure executives and expensive staff all along the pipeline. No visible value added, just costs.

This constitutes a major scandal, even in Virginia.

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40 responses to “How Does Virginia Budget Early-Childhood-Education Money Wind Up in a Park in Detroit?”

  1. DJRippert Avatar

    Typical liberal crony capitalism and rent seeking. From Hunter Biden to Hillary’s brother and Terry McAuliffe with GreenTech … taxpayer money is an open trough for liberals to dip into.

  2. Those CEO salaries are fairly standard. I know they’re a lot of money (more than I made running a nonprofit) but they’re not out of line. Seems like the way you wrote them here makes them seem nefarious.

    As for the Detroit thing – that is completely bizarre. I’m unsure there’s a good explanation for it, but did anyone ask Act for Alexandria about it? Seems like a worthwhile exercise before throwing out accusations…

    1. James C. Sherlock Avatar
      James C. Sherlock

      The salaries are not nefarious, but they are part of the cost of laundering government money through a nonprofit.

      And no accusations.

      Just documented facts that the nonprofits themselves, under the watchful eyes of their independent accountants, reported to the IRS.

      The Detroit thing, as you deem it, is Act of Alexandria’s to explain. Not mine.

      You did not mention the consultants. Are none of the VECF staff early childhood education experts?

      All-in-all, nice try, though.

      1. There’s no “nice try” here – I’m not commenting to “get one over on you” or something. Just pointing out a few things. I think it’s weird that any govt gives money to non-profits in general, but I also understand that’s the way things work and there’s overhead associated (whether it’s internal to govt or external in non-profit mgmt). Also, grant funding usually specifies the amount of overhead that’s allowed.

        And I agree that Act should explain the Detroit thing. But I’m guessing that they don’t read this blog and if you’re looking to provide information to readers (which is why I read this blog regularly) then you’d do a small bit of due diligence and ask yourself. Otherwise, you’re just throwing out random facts with a background of scary music. If I wanted that, I’d watch Maddow or Carlson…

        1. Just searching around on Act’s website shows that they’re a DAF. So some donor created a fund with them and put in a boat load of money. Then that money went to Detroit per that donor’s direction.

          Maybe it was this guy, Mango Mike, who is from Detroit and is a big philanthropist living in Alexandria…

          1. James C. Sherlock Avatar
            James C. Sherlock

            Reasonable guess, but there is no record of that in Act’s Form 990’s. Or in the article you linked. In 2018, Act gave no money to Recovery Park. I have requested the CEO of Act to comment. If I hear from her, I will print it.

          2. energyNOW_Fan Avatar

            Seems strange for such an organization to also serve as a DAF (Donor Advised Fund). Most people use Fidelity or Vanguard for that.

        2. James McCarthy Avatar
          James McCarthy

          It’s not Act’s responsibility to explain where it’s reasoning is not requested. The facts thrown around here may be neutral but the conclusions, i.e. inferences, are largely political or ideological.

      2. James McCarthy Avatar
        James McCarthy

        Assumedly,you afforded Alexandria the opportunity to respond by direct contact. That might generate an explanation for the facts from which you draw conclusions and attribute to political motivations. “Laundering?” That’s at best an inference not a fact.

        1. And it’s a shame that this is a piece with such glaring holes in it. This space deserves better. I think @Jabacon:disqus’s point about how we throw money at problems and nothing gets solved is a worthwhile one. Also, @James C. Sherlock’s overall point is worth considering – including the Secretary being on the board (not that being on a non-profit board is somehow corrupting…).

        2. James C. Sherlock Avatar
          James C. Sherlock

          I await replies from both VECF and Act for Alexandria

  3. Brilliant exegesis, Jim.

    If one wonders how Americans can so much money to combat poverty and racism and yield so little in return, it helps to understand that most of these programs function as patronage machines for middle- and professional-class liberals and leftists. Only modest amounts make it to the poor. Talk about trickle-down economics!

    It’s one thing when private foundations and philanthropists piss away their money, quite another when the Commonwealth of Virginia does so. I agree, this is a scandal.

    1. James C. Sherlock Avatar
      James C. Sherlock

      Perhaps someone can ask Atif Qarni his thoughts. He is both on the board of VCEF and the Secretary of Education.

      1. James McCarthy Avatar
        James McCarthy

        ‘Twould be honest and brilliant journalism were the author to, at least, have indicated a call was placed to Alexandria for explanation. The conclusion to a forensic inquiry is generally drawn. Innuendo does not substitute. O/wise, the inquiry resembles the 2020 steal.

        1. James C. Sherlock Avatar
          James C. Sherlock

          Can you spell “fungible”.

      2. James Wyatt Whitehead Avatar
        James Wyatt Whitehead

        Too bad Thomas Nast isn’t around for this one. He loved the topic of patronage and which wheels were getting the grease.

  4. Thanks for reporting the bright side of this James, I was deciding between

    1) high powered rifle/tall building or packing up and moving to FL (don’t worry government spies, I have no intention of the former but if the Dems win in VA you can count on the latter)

  5. Dick Hall-Sizemore Avatar
    Dick Hall-Sizemore

    For anyone wanting details on how this money is to be spent, the Appropriation Act spells it out. The money was not provided to VECF carte blanc for it to spend anyway it wanted. Here are the details. In FY 2022, the total was $2,750,000. In FY 2023, the appropriation increases to $6,250,000.

    In both years, $250,000 is provided to cover administrative expenses of VECF. Likewise, in both years, there is $1,000,000 provided for scholarships to improve the skills of early childhood workers, with some parameters on who is eligible for those scholarships.

    The bulk of the money ($1.5 million in the first year and $6.25 million in the second) is to be used to establish pilot public-private pre-kindergarten services for at least 500 at-risk 3- and 4-year olds. The Act provides considerable detail on the requirements of such programs. (For details on these appropriations, see Item 144, para. S. of the current Appropriation Act.)

    In summary, the appropriation is to be used to further early childhood education in Virginia under specific conditions, not to merely support favored “woke” organizations. Furthermore, the grant will be subject to audit by DOE to ensure that the money was used as intended.

    1. James C. Sherlock Avatar
      James C. Sherlock

      Dick, a couple of questions.
      1. Why did not the money go to the VDOE directly as opposed to the nonprofit for distribution to ultimate recipients?
      2. Why does the government of Virginia feel the need “to cover administrative expenses of VECF” with a quarter of a million dollars?

      1. Dick Hall-Sizemore Avatar
        Dick Hall-Sizemore

        I am not sure why the money was provided to a nonprofit rather than DOE. The justification is probably that it is more efficient because the nonprofit can be more flexible in running a pilot program. The point is that doing this is not uncommon. Both parties do it. It is not some “woke” liberal plot to reward other liberals.

  6. Super Brain Avatar
    Super Brain

    I did not see any breakdown of contributors on Schedule B. It would be helpful to see the organizations audit which would include a breakdown of any state or Federal direct and pass through grants. Any program non compliance would be in the report.

    1. James C. Sherlock Avatar
      James C. Sherlock

      You won’t. Nonprofits are not required to list their contributors. It is a phantom part not only of our political system but, given its size, of our economy.

      1. Super Brain Avatar
        Super Brain

        The audit report will show The schedule off Federal Financial assistance as well as material. On compliance with any government grant.

  7. Dick Hall-Sizemore Avatar
    Dick Hall-Sizemore

    By the way, the 2019 Appropriation Act, the one enacted the last year the Republicans were in the majority, had $2.75 million each year for VECF. The Democrats continued that policy and added $4.5 million in the second year of the biennium to annualize the pilot program for pre-k services for at-risk 3-and 4-year olds. So much for the narrative that Democrats are trying to line the pockets of their cronies.

    1. James C. Sherlock Avatar
      James C. Sherlock

      That assumes that, if you are correct, I think that Republicans were right to launder money through a nonprofit to do governmental work.

      I do not.

      “Nonprofits” cover some of the biggest tax scams in this republic. The additional feature that some of them serve as conduits for public money is a scandal not nearly well enough examined.

      1. Dick Hall-Sizemore Avatar
        Dick Hall-Sizemore

        That is a different issue than the one you originally laid out in your post.

        1. James C. Sherlock Avatar
          James C. Sherlock

          Perhaps I did not make that point clearly enough because I have internalized it.

          I first encountered it when starting my investigation of the infamous nonprofit Sentara Healthcare 15 years ago.

          The lax-to-no enforcement of state and federal tax codes have so normalized these scams that they have become part of the landscape.

          If politicians really wanted to raise government revenue without injuring working people they would start by repealing all laws defining nonprofits, not just exempting nonprofits from taxes.

          If they can’t pay property taxes, that means they are not beneficial enough to attract capital. If they are truly nonprofit, they won’t owe income taxes.

          I plan to take this on as a separate series.

          There are superb nonprofits like Memorial Sloan Kettering that are true charities.

          Then there are the scammers.

          Act of Alexandria is a true charity that is out of it’s lane handling state money. That is a nasty business with nasty players. Act needs to stop it.

          But your point is well taken.

  8. Dick Hall-Sizemore Avatar
    Dick Hall-Sizemore

    As I have already indicated, this post is very misleading. The author’s thesis is:

    “The political Left, fully in control of Virginia government, sends
    taxpayer money to leftist non-profits, who take their cuts and then send it on to local government entities and yet more nonprofits.

    It is unethical, but that does not matter to Virginia’s elected Democrats.”

    If one looks at the history of this funding provided to VECF, the picture becomes a lot different.

    The targeted funding for VECF first shows up in the 2016-2108 budget bill introduced by McAuliffe. VDOE did not request this funding. That tells me that the idea originated in the Governor’s policy office. McAuliffe’s policy office was very active in the development of the budget. It is not unusual for groups and individuals to lobby the Governor’s office for inclusion in the budget. And Governors tend to favor those groups that are friendly with his overall policies.

    The governor’s budget proposed $3.35 million the first year and $4.0 million the second year. When the proposal emerged from the House Appropriations Committee, the amounts had been reduced–$2.35 million the first year and $2.75 million the second. The House Appropriations Committee was chaired by Del. Chris Jones (R-Suffolk) and the HAC subcommittee on K-12 education was chaired by Del. Jimmie Massie (R-Henrico). Neither of these could be regarded as “woke” liberals. In summary, the House Republicans were aware of the proposal to provide funding to VECF; they touched it, thereby approving the substance, only reducing the amount. The revised proposal was included in the final Appropriation Act.

    The funding in varying amounts has been continued through the Northam administration and Republican and Democratic legislatures.

    There are legitimate questions that can be asked about this funding. But, a park in Detroit has nothing to do with it. That is a classic red herring. Nonprofit groups can be active in more than activity and have multiple sources of funding.

    One valid question is why should taxpayers be providing $250,000 annually for administrative expenses of VECF. The answer likely is that this money is needed to administer the scholarship program and the pre-K pilot program.

    A more important question, as far as I am concerned, deals with the pilot program for pre-K for at risk kids. I have learned to become skeptical of pilot programs. A true pilot program is just that–a pilot. If the methods it is testing provide successful, then the localities involved should adopt the program for itself. And VDOE should identify what was proved by the pilots as working and encourage other localities to use those methods. Similarly, a pilot can be beneficial by identifying what does not work. And VDOE can incorporate those lessons as well. Pilot programs should not become long running programs supported by outside funding.

    Therefore, the question that folks, including the GA, should be asking, is what lessons have we learned from the pilots after four years. Why was the 2023 funding for the pilot programs increased significantly by the 2021 General Assembly? At first, I assume annualization, but the funding started in FY 2017. So, obviously the pilots are being expanded.

    Have the pilots been successful? What lessons have been learned? Why was the funding for the pilots expanded? There is not much information publicly available regarding these questions. It does appear that the Northam administration did not request an increase in the VECF funding in his 2020-2022 budget submission. He did, however, request additional funding for VDOE’s pre-K programs. The GA chose to give VECF more funding for this program, rather than VDOE.

    Perhaps VECF is doing a fine job with this program, helping at-risk kids, and learning more about what works. I don’t know. This has never been my area of specialization. However, there is a general tendency for groups or activities to get included in the budget and, through inertia, continue to get funded year after year. Ideally, someone, the GA, DPB, or VDOE, would periodically assess those programs and end the funding if it were found to be no longer necessary or effective. But, many of those appropriations tucked into the budget become sacred cows. They are the favorite of some legislator whom no one wants to offend. Or they are concerned with a sensitive area and no one wants to rock the boat. After all, who can be against funding pre-K for at risk kids? Finally, the legislature is part-time, they have limited staff, DPB does not have staff devoted to evaluation. There is a limited amount of time and there are bigger fish to fry.

    That is the bigger issue, not some wild goose chase following the money that various nonprofits are involved with.

    1. Dick, would you accept a modified version of Jim’s thesis? The government sends
      taxpayer money to non-profits, which take their cuts and then send it on to local government entities and yet more nonprofits.

      1. Dick Hall-Sizemore Avatar
        Dick Hall-Sizemore

        Sure, that is a statement of fact that is evident throughout the Appropriation Act. I don’t accept his argument that money intended to improve early childhood education in Virginia was laundered and ended up funding a park in Detroit.

    2. Also, I think you raise good issues regarding (a) the size of administrative overhead, and (b) the longevity and lack of accountability for many “pilot” programs.

    3. James C. Sherlock Avatar
      James C. Sherlock

      The Virginia Department of Education has a very large staff in the Division of Early Childhood Care and Education, including several grants managers. (The Office of Child Care Health and Safety is newly transferred into VDOE from another Virginia agency).

      Yet apparently VDOE was thought by the budget writers in McAuliffe’s office unsuited to manage all of Virginia’s early childhood education money.

      You know personally that the final budget is subject to give-and-take between the Governor’s Office and the GA Budget negotiators.

      I note that Dr. Lane, the Superintendent of Public Instruction, is appearing before the House Appropriations Committee on Monday, Oct. 18.

      Perhaps he will comment on this.

    4. James C. Sherlock Avatar
      James C. Sherlock

      I don’t take back a thing I said about Democrats in the updated column.

      It has been part of the playbook of Democrats nationally, when in power, to fund the left with government money. It’s their bench. Many nonprofits are full of Democratic appointees in waiting.

      It is specious to suggest that conservatives do it to the same degree. Heritage Foundation does not get government funding. When the Tea Party tried to organize nonprofits, the Obama IRS stalled them and then took some to court. Dick, this is not a close call.

      1. Dick Hall-Sizemore Avatar
        Dick Hall-Sizemore

        The issue is not who does it the most. You contend in your post that liberal Democrats set up a special appropriation for a nonprofit organization and some of that money got laundered through another nonprofit organization and ended up funding a park in Detroit. I demonstrated that Republicans not only acquiesced in that funding, but approved it. Furthermore, the money was specifically intended for pre-K education with specific direction, in law (the Appropriation Act), about how it was to be spent. I also raised questions about the use of nonprofit organizations and pilot programs. You choose to ignore that and want to continue to focus on Democrats, even bring in two more red herrings: the Heritage Foundation and the Tea Party.

        1. James C. Sherlock Avatar
          James C. Sherlock

          I characterize that differently than you.

          Your research showed a Democratic governor put a big amount of money in his budget for his friends, and the Republican GA cut it roughly in half. They did not zero it out, probably as a trade for one of their own must haves. That is how budget negations work, and you are experienced in that field.

          1. Dick Hall-Sizemore Avatar
            Dick Hall-Sizemore

            That is not how it works once the budget gets into the legislature. The Republicans were in charge of both houses; they could have any “must have” they wanted. Once the budget bill is introduced, the governor has little leverage.

    5. James C. Sherlock Avatar
      James C. Sherlock

      Your questions about pilots are spot on. They are sponsored by people who are true believers, and will never give them up without a fight. The only chance of objective assessment will come from the government itself. And that is a very slim chance indeed. No bureaucrat ever advanced his career by telling his boss that her baby is ugly.

      The consultants like the ones I have mentioned in my article are not in business to tell the government that its new program is flawed, much less fatally flawed.

      That is one of the reasons that Milton Friedman in 1984 wrote that “there is nothing so permanent as a temporary government program”.

      He called the book ““Tyranny of the Status Quo.”

      1. Dick Hall-Sizemore Avatar
        Dick Hall-Sizemore

        It’s nice to know that I am in such distinguished company.

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