O.C. Bankruptcy Brings Wealth of Community Gifts : Education: The $5 million in donated cash and supplies to schools, however, is far short of $74 million districts lost.

First, came boxes of scratch paper from a small office in Washington. Then pens, glue sticks, envelopes, math games, typewriters, and used computer equipment from homes and offices around the county began to pour into school districts in the weeks after Orange County declared bankruptcy.

Next came a cartload of brand new baseballs--1,200 in all.

For public school officials, who faced potentially drastic budget cuts as a result of the financial crisis, the odd laundry list of unsolicited donations included the best gift of all: Cash, which is still flowing in.

The silver lining in the worst bankruptcy ever to befall a U.S. municipality is that the fiscal calamity galvanized parents, community groups and businesses as never before. Drawn into service by doomsaying headlines and broadcasts, volunteers weighed in with their time, their labor, their scratch paper and their money.

County schools became viewed as the innocent victims of a reckless investment strategy. Residents were outraged with government, but charitable with the schools.

“The bankruptcy is the catalyst that woke people up to the fact that we have neglected our public schools,” said Elizabeth Thomas, executive director of Orange County Public Schools Fund, a new fund-raising group representing 15 school districts.

Boxes of scratch paper from as far away as Washington began flooding the FHP International Inc. office in Fountain Valley after the health-maintenance organization issued an urgent call for aid to its employees across the nation.

In turn, the company this spring shipped hundreds of boxes jammed with paper to the Brea Olinda and Capistrano Unified school districts, which, like so many, had begun to make major cuts in their classroom supply budgets.

“I had to tell them to stop sending paper in June,” said Kim Iandiorio , the company’s community outreach coordinator. “The response was overwhelming. I still have some in my office.”

At Philip J. Reilly Elementary in Mission Viejo, the Toshiba Co. kicked in with a state-of-the-art copier. At Lakeside Middle School in Irvine, parents donated science supplies and about $700 in cash. At Ensign Intermediate School in Newport Beach, more than 100 teachers and parents arrived at the school at 4:10 a.m. on a cool March morning to help set up a rummage sale that netted $7,700.

Similarly spurred by the bankruptcy, small businesses donated everything from children’s math games to paper, envelopes, Post-It notes, crayons and pencils. Big business contributed cash in unusually high sums--$50,000 and more--to save computer labs or field trips, once scheduled for elimination.

The generosity touched virtually every district and every school in the county.

“It’s been happening in little ways,” said Supt. James A. Fleming of the Capistrano Unified School District, which lost $7.4 million as a result of the county pool. “There’s not a school in our district that hasn’t benefited from the largess of an individual or a company that came forward and said, ‘We know you’re in trouble because of bankruptcy. How can we help?’ ”

But county education officials lament that the noble deeds fall far short of repairing the gaping holes torn in school budgets. Officials estimate the monetary collapse reduced school budgets by a combined $74 million countywide. Unfortunately, officials say, contributions of all kinds amount to less than $5 million, at best.

“As generous as everyone has been--and it’s been just great--the donations still really have been just a drop in the bucket,” said a county education official, who asked to remain anonymous.

Some school supporters realized their efforts would not single-handedly alleviate the daunting budget woes. But, they say, there’s more driving their cause than just supplementing school budgets. Blood ties, perhaps, played the most important role in recruiting volunteers who toiled to keep their children’s schools from sliding backward.

For instance, a coalition of Asian American groups raised more than $56,000 for hard-hit Irvine schools in the weeks following the county bankruptcy. Chinese American, Japanese American and Korean American groups composed mostly of parents collected the amount by staging benefit concerts and dispatching “foot soldiers” to Irvine neighborhoods to solicit help for the district.

“That’s really not a substantial amount of money,” said Gloria Dahlberg, whose group, “Bravi 9 Inc.,” helped spearhead the fund-raising drive. “But we felt that we needed to carry the banner to get everyone involved, even if it was only token support.”

Added Dahlberg, who has seen two children graduate from Irvine schools and has another who is a junior at University High: “It was the proper thing to do because we are all parents. We all have kids in the Irvine district. If we don’t help, who will?”

The group’s donations were funneled mostly toward purchases of equipment for computer and media labs and basic classroom supplies for the district that lost $8 million. Fearful that sporting goods budgets might be cut as well, Jehy and Sherri Lah of Irvine bought the district 1,200 baseballs, at a cost of about $5,000.

“American sports is such a big part of the education system here,” said Sherri Lah, who immigrated from Korea and works as a language specialist at the district and has a 15-year-old son at Irvine’s Woodbridge High School. “When people found out what we donated, their eyes got real big and they said, ‘Wow. That’s a lot of baseballs.’ ”

Other less affluent school districts, however, did not have the same community wealth on which to draw.

The Santa Ana Unified School District, which took a $5-million hit, found the community desire to help was there, but nevertheless turned away scores of parents who stepped forward with offers of classroom supplies and even money.

“We told them we appreciated it, but we just couldn’t accept a lot of it,” said Santa Ana Unified spokeswoman Lucinda Hundley. “Some of them are in more dire economic straits than we are.”

Already trailing richer districts in academic performance, districts with lower-income students struggled harder after the bankruptcy to avoid more serious cuts. In most poorer districts, where both parents usually work, it was much more difficult to organize benefit programs, school officials said.

“It’s tougher for us than other districts with wealthy parents,” said a Santa Ana Unified administrator, who asked to remain anonymous. “But we are used to it.”

The financial crisis, however, forged a new countywide organization dedicated to strengthening schools financially. Founded in April, the Orange County Public Schools Fund consolidated 15 separate educational foundations, with the goal of creating a $50 million endowment fund over a seven-year period.

Interest income from the endowment fund would be dispersed to district foundations on a per-student basis for support of specific programs. Organizers hope to augment the fund by establishing a program now used in San Francisco that dedicates 25 to 50 cents per ticket sold at stadium events toward athletic programs at local schools.

But the key advantage of the unified fund, say organizers, is it will be easier to attract donations from large corporations, who have been reluctant to favor one district over another.

“Corporations would love to donate, but they didn’t know how to deal with 27 different school districts,” said Thomas, executive director of the new fund. “So the bottom line was they were unable to contribute in any significant way.”

But because of the bankruptcy, corporate attitudes may be changing. For example, Taco Bell Corp., headquartered in Irvine, handed out $50,000 to four school districts to save programs scheduled for cancellation.

“The bankruptcy was the driving force behind this,” said Jonathon Blum, a Taco Bell spokesman. “We are all concerned that the schools continue to offer a high quality education.”

Auto dealer Joe MacPherson, owner of one of the largest automotive groups in Orange County, also felt compelled to chip in after headlines earlier this year declared gloom and doom for local schools. Since Memorial Day, MacPherson has been donating $50 to county schools for each customer who buys or leases a new or used vehicle at one of his six dealerships in Irvine and Tustin.

“I got tired of all the negative press,” said MacPherson, 67, who had three children graduate from county schools and will soon have three grandchildren enrolling in them. “I’m a great believer that we need to rely on ourselves and not go to other people for help all the time.”

His “Help Our Schools” program, which ends today, already has raised $155,000 for more than 430 schools and the Orange County Public Schools Fund. The final tally will be among the highest single contributions to county schools ever made by a private company, according to county education officials.

“It’s just amazing,” said Thomas, whose foundation has received more than $28,000 from the car dealer, which may go toward hiring a part-time fund-raiser. “The MacPherson money is a real boost.”

Not all business overtures to assist the schools have proved as successful or as welcome. Schools officials report that the bankruptcy produced a veritable cottage industry of entrepreneurs eager to make a quick profit.

Fleming, superintendent of the Capistrano Unified School District, said he turned down a host of schemes that involved schools splitting proceeds from the sale of products such as vitamins.

“I resist the idea of using children for the idea of private enterprise selling,” said Fleming, who won’t allow students to carry home fliers advertising such products. “The extent to which it would actually help children in schools is questionable.”

However, Fleming added: “I told them, though, if they wish to do this on their own, I would be glad to accept any proceeds later.”

Fleming has yet to receive any takers.

Though it appears schools will ultimately emerge from the bankruptcy not much worse off than last year, school officials applaud the community for rallying to make the best of the situation.

One reason for the astonishing outpouring, suggested a county education official who saw donations of supplies and equipment double since the bankruptcy, is guilt.

“I think everybody feels responsible somehow” for the bankruptcy, said Lorraine Dageforde with the Orange County Department of Education. “We elected the supervisors that did it.”

Others maintain that whatever the reason for the gifts, it is crucial that fund-raising efforts continue.

“We have got to stop trying to hide the fact we don’t have the money,” said Thomas, the mother of second- and ninth-graders who attend the Irvine schools. “Sure, maybe we can squeeze enough money out this year. But what happens next year?”