BREAKING: New SDIRC Charity Spends $51,000 on Political Mail for a Temporary Tax Referendum From the Great Recession

An augural beginning of the new education fund for SDIRC.

The flyer sent to over 100,000 households in the county. The “operating needs millage” was put in place during the Great Recession to offset costs of during the housing crisis of 2008-2009 that saw property tax revenue plummet. The “temporary tax” is gaining a permanent foothold in the normal budgeting of the school district in spite of property tax revenue being restored and increasing every year.

The Sunshine Journal has learned that the newly formed Indian River Education Fund, Inc. (I.R.E.F.) spent over $51,000 this campaign cycle on a flyer mailing and electronic messaging campaign. The electioneering urged voters to “Vote Yes” on a ballot referendum to maintain the half point millage rate tax to fund “operating needs” of the school district. Entering its 16th year, this temporary millage tax was instituted in 2008 - 2009 when operating budgets plummeted because of the housing crisis. The two-sided mailer prominently displayed the School District’s logo on both sides. The passage of the referendum represents millions of dollars in annual funding.

The printing business who provided the services to I.R.E.F. was Ironside located in downtown on Route 60. According to their invoices the firm provided via public records, digital marketing which included 300,000 email blasts and associated creative services, as well as, 103,858 doubled side mailers were produced for the campaign. Ironside managed all of the creative and mailing services to reach citizens.

What did the marketing campaign produce? Voter approval was at 75% for the millage referendum. In 2020, it was actually higher at 76%. In a press release, Superintendent Dr. David K. Moore stated, "We are thrilled by the tremendous response from our voters. This level of support demonstrates the trust and confidence our community has in the quality of education we provide. It is a testament to the hard work and dedication of our teachers, staff, and leadership, who continue to deliver world-class educational experiences for our students."

The School District is not permitted to do any form of direct advocacy regarding ballot initiatives or electioneering. Florida Statute 106.113 reads,

“A local government or a person acting on behalf of local government may not expend or authorize the expenditure of, and a person or group may not accept, public funds for a political advertisement or any other communication sent to electors concerning an issue, referendum, or amendment, including any state question, that is subject to a vote of the electors.”

However, Direct Support Organizations (DSO), which is how the I.R.E.F. is classified, have more latitude. The funds used in the creation and mailing of the advertisement were privately donated to the DSO which exists on behalf of the school district. The I.R.E.F. replaced the previous Education Foundation which was a completely private entity. In 2020, the Ed Foundation also promoted the ballot initiative’s renewal. The I.R.E.F. executive director, Janet Knupp who has over 21 years of experience in non-profit start-ups, said, “I believe we are in full compliance. The rules are cumbersome, but there is clear precedent.”

The I.R.E.F. was formed on May 17, 2024 after a vote of the school board to create a non-profit DSO to raise money for educational programming. Since May, the board has had three meetings that took place on June 20, September 4 and November 13. The next meeting is December 10.

The Sunshine Journal had to file a public records request for minutes. Still pending approval by the board, September’s meeting minutes share, “Additionally, consensus was established to allocate $25,000 of existing funding to support communications regarding the upcoming referendum. It was agreed that any balance of funding need to support the referendum communications beyond this amount would be secured through individual donors.”

Also at the September board meeting of the I.R.E.F., the application to the IRS for 501(c)3 status was on the agenda. The explanation of the mission was drawn straight from the organization’s bylaws. According to the final draft of the application, the organization’s “purpose is to galvanize private support to drive and sustain the improvement of public schools in Indian River County.”

Some have raised concerns regarding federal regulations for non-profits. The IRS states in their rules, “A 501(c)3 organization may make a contribution to a ballot measure committee (committees supporting or opposing ballot initiatives or referenda), but it must include such contributions in its lobbying calculations for purposes of determining whether a substantial part of its activities consist of attempting to influence legislation.”

When it comes to campaigns, non-profit organizations cannot directly interfere and advocate on one candidate over another. Non-profits cannot do targeted issue advocacy during elections that would again, favor a candidate over another. The issue did not intervene in any public office campaign.

Non-profit organizations must demonstrate to the IRS that their messaging is something they always produce equally in non-election cycles as well as during elections. The IRS requires regular messaging consistently presented that represents the organization’s mission and purpose. Ms. Knupp remarked, “The Indian River Education Fund was newly organized in May. The timing of the cycle of things occurred that made this mailing one of our first expenditures.”

Ms. Knupp was referring to the vote on the tax rate which was due to expire in 2025 without further approval by voters. The temporary millage referendum, which is up for renewal every 4 years, was established as a result of the Great Recession when housing prices plummeted and scarce property tax revenues created budget shortfalls in school funding. It was suppose to be a stop-gap funding measure to end once the recession was over. However, like all temporary taxes, government learns to have a permanent dependency on them.

The millage referendum will be up again for renewal in 2028.