In 1969, Scott Stodola and Kendall Frazier founded the Bellingham Cooperative School. The School was housed in a variety of locations, including Fairhaven College and the golf course club house at what is now Fred Meyers. After years of struggling with rents and landlords, my neighbor, John Frazier, offered the land he lived on to the school. The School, long known as "A Country School in the City", took over the contract for $52,800.00 in 1981, providing a stable base of operations for the school ever since.

Figure 1 is an “onion chart” showing the relationship of BCS Inc., a federally chartered 501 C-3 non-profit corporation, to our community and the land which houses the School. The School provides programs into the community and the community returns money to the School in the form of student tuitions and parent contributions. These monies in turn support the School, pay for the land and sustain BCS Inc. and their federally chartered purpose – to provide educational services. This is a pretty straightforward, sensible structure, putting a non-profit charter in place of their former landlords and sheltering the School’s location from uncertainties of the market. But it didn’t work out that way.

In 1996, the BCS Inc. founders decided to move on. They sold the School to Heidi Alford. She has run it since, providing the services for which BCS Inc. was originally chartered. However, BCS Inc. maintained their chartered status and retained ownership of the land, leasing it to the School.

The School attempted to form a federally chartered non-profit in 1998, but ran into complications with the IRS when it became apparent that two organizations of the same name were attempting to provide the same services at the same location. The School, therefore, settled on state non-profit status, foregoing the tax advantage a federal charter offers contributors.

Figure 2 shows this relationship of the community to BCS Inc. with the School under new management. Here, BCS Inc. holds the land and collects the rent but the School fulfills the federally chartered purpose in the community. The School still receives community money for services they provide, but transfers much of it to the BCS Inc. non-profit shell. This money continues to pay for the land and sustains BCS Inc.’s federal charter. Structurally, it is much as if BCS Inc. had contracted with the School to provide their services – with one important difference. The School pays them for the privilege, draining their ability to expand programs or supply materials. To date, the School has delivered over three times the land’s original price to BCS Inc.

In 2004, family members of the founders appeared in the neighborhood, discussing the prospect of developing the property to provide retirement funds for the original founders. Eventually they realized that their plan might run afoul of rules for assets of federally chartered non-profits. A new plan was hatched. Another non-profit could buy the property from BCS Inc. for its own purposes at a dramatically appreciated value. BCS Inc. revised its charter and changed its name to Taecan. Taecan recently listed the property on the market for $800,000.00 and the Kulshan Land Trust immediately entered into a purchase and sales agreement to buy the land for permanent, affordable housing.

Figure 3 shows the intended relationship, a far more complex, sprawling scheme that transfers the land into Kulshan ownership for use in housing programs they deliver to the community. In this structure, the community provides funds to Kulshan, as well the School – if the School can survive the new rents and continue to operate as “A country School in the Parking Lot” amidst 14 to 18 residential units. Kulshan transfers substantial community non-profit funding into Taecan. However, to date, there is no evidence that Taecan or BCS Inc. has offered or offers program services to the community at any level commensurate with the funds received. An exhaustive Internet search of the principals and board revealed only scant, outdated information on any actual services – other than those the School provides, independent of BCS Inc. or Taecan.

However, what surfaced was even more distressing. A son of one of BCS Inc.’s founders, Peter Frazier, has served as a trustee on the Kulshan Land Trust Board and worked as a consultant to the organization. Another founding member of Kulshan, also a former trustee, was the original mortgage holder for the property upon which the School continues to operate.

Whether Kulshan could perform on this project without massive subsidy is questionable. They are having to push their income limits to qualify applicants for homes in their new development at Matthei Place on 15th and Harris Ave. Several of these units remain unoccupied. The land cost per unit at the Schools property would start at nearly four times the Matthei Place cost – before any on or off-site improvements that may be required. Why this parcel, with its cost difficulties was chosen is unclear. A parcel three times the size may be available for the same cost only a few blocks away. Meanwhile a nearby parcel very similar in size and price to the school site has languished without offers since November.

In any case, the scenario has raised some important questions about the fate of non-profit contributions from the community. Are services of appropriate value being rendered? Are individuals taking unfair advantage of their federal charters? Are organizations colluding to strip non-profit funds out of community service for individual gain?

It certainly raises issues of what constitutes sustainability. If we cannot sustain an organization that has provided valuable educational services to the community for 40 years, then what is sustainability? What are our priorities if we allow such services to be chronically drained or eventually stripped and abandoned? How can we scrutinize our community’s limited non-profit funding to prevent such abuse? Nobody believes Kulshan’s assertion that they want to keep the school in place. It is unimaginable that the School could operate in the yards of so many immediate neighbors. Will the neighbors, like School volunteers, be subjected to background checks before moving in? Will residents agree in advance not to work night shifts or complain about playground noise?

The School’s yard has been paid for and maintained by students and their parents from the beginning. Is it appropriate to leave them saddled with debt or stranded with nothing to show for their years of community service? The School is now forced to exercise its first right of refusal at a “top of the market” price to maintain any hope of survival. Whether they and the community can meet this challenge remains to be seen.