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March 25, 2015

S.C. Investigates School-Choice Nonprofit Over Grantees

South Carolina’s tax agency is investigating an organization that awards tuition grants for special-needs children to attend private school and refuses to disclose the names of recipient families, according to the Columbia, S.C., daily The State. The Department of Revenue is looking into complaints that Palmetto Kids Scholarship Program has offered grants to parents in exchange for donations, which would violate a two-year-old state policy that awards tax credits for such gifts.

The Mount Pleasant, S.C., charity denies the quid pro quo claims, saying it encourages but does not require parents who qualify for aid to donate. It has asked a state court to intervene to protect the privacy of grant recipients. Olga Lisinska, Palmetto Kids’ operations director, said less than 3 percent of donors had children who were awarded a tuition grant.

Palmetto Kids has raised $12 million, and its contributors have reaped the lion’s share of tax breaks under the state school-choice program, which offers up to $8 million a year in credits for gifts to groups that help disabled kids attend private schools. South Carolina lawmakers are debating whether to expand the program to cover low-income families and more than triple the amount available for credits.