Board & College Leadership Staff Talking Points

Relative to the Seattle Weekly Article

It’s unfortunate the Foundation was portrayed in such a negative light in this article. This Foundation has a very dedicated volunteer board that is working extremely hard to ensure the AFS credit counseling program supports the Foundation goal, which is to help students at North.

The NSCC Foundation created American Financial Services in 1999 to generate scholarship funds for students and to provide general college support. AFS was also to be an educational outreach organization to help people secure stable financial futures. At the time when AFS was established, all credit-counseling programs were required to have non-profit status.

As the credit counseling industry grew, the IRS began to re-assess whether credit-counseling organizations should remain non-profit entities. No final determinations have been made across the industry. In the meantime, the Foundation remains committed to generating scholarship and grant funds, in part by providing oversight of the AFS operation.

  • All funds raised by the foundation through general contributions and events have been directed to the charitable purposes intended by the donor.
  • No donor funds have been used to support AFS activities.
  • Aside from its tax ID#, AFS is a separate operation from the foundation.
  • AFS has separate employees, officers, locations, and bank accounts.
  • Income from AFS activities and income from traditional foundation activities are kept separate.
  • The article persistently refers to the North Seattle CC Foundation as the credit agency; the credit agency is, in fact, American Financial Services, a separately operated division of the foundation.
  • AFS is governed by an oversight board, that is a subcommittee of and reports to the foundation board.
  • Three years ago, the foundation applied for independent tax-exempt status for AFS to further separate the two organizations. The IRS has neither denied nor approved this application, but is aware that AFS has implemented major changes in its operations.
  • The Weekly article portrays a skewed picture of the percentage of dollars the foundation has allocated to scholarships and compares scholarships as a percentage of gross revenues, without first deducting expenses. High expenses of debt management are due to mandatory bank processing and reporting to consumers and creditors. AFS currently outsources these bank processing and report functions to 3rd party contractors like Amerix, that have developed complex and proprietary software and technology systems.

The article fails to point out actions that the foundation board has taken which include:

  • Reorganizing the committee that oversees AFS to provide more direct control and accountability of the division’s activities to the board.
  • Initiating (some more than two years ago) actions to transition AFS to “in-house” operations, thereby reducing outsourcing and contractual obligation to Amerix.
  • After more than a year of contract negotiations, AFS terminated its financial contracts with Amerix and is pursuing alternate arrangements.

It is our hope to work with the IRS in resolving the issues within the industry so that we may continue to provide ongoing support to the college.

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