Related story: AnnArbor.com unveils winners of 2012 Deals of the Year awards at annual ceremony

When the Ann Arbor school board passed its budget in June, one program that didn’t make the cut was busing for middle school students who stayed past regular school hours for club meetings, sports or academic tutoring.

Seeing an opportunity to help, the Ann Arbor PTO Thrift Shop and the Ann Arbor Public Schools Educational Foundation pledged up to $43,000 each to restore the service.

“We think that these after-school activities are one of the things that makes Ann Arbor Public Schools excellent,” Educational Foundation board chairman Omari Rush said.

“Being able to support the middle school busing provided an opportunity for us to support student access to these programs and resources. It just makes complete and total sense.”

According to AAPS estimates, more than 1,500 students participate in after-school activities at the middle schools every year. In this year’s spring semester, 187 students used the bus service to get home after the activities were finished. Scarlett Middle School had the highest usage, with 55 students getting rides.

The two philanthropic organizations that already donate hundreds of thousands of dollars every year to the school district were able to fill those students' needs with the help of a $15,000 gift from the family of James A. Norton, Jr. and surpluses created by a new business model at the Thrift Shop.

For their collaboration, the Ann Arbor Public Schools Educational Foundation and Ann Arbor PTO Thrift Shop are AnnArbor.com’s 2012 Deals of the Year winner in the Nonprofit category.

Senior living community Glacier Hills and Eastern Michigan University’s innovative “Live Ypsi” program were also nominated in the category.

For the Thrift Shop, whose revenue for the 2010 was $773,471 according to non-profit database Guidestar.com, the gift comes as the store continues to profit from its transition away from a volunteer-based model. After receiving a reminder notice from the IRS in January 2010 that 501(c)3 non-profits could not distribute funds to benefit individuals, the shop was forced to re-examine its system where students and parents would volunteer in return for contributions to the child’s fundraising efforts.

“Our volunteer efforts dropped like a stone when people could no longer work for individual fundraising,” PTO Thrift Shop marketing director Ann Farnham said.

“So we started hiring people part time and the store got busier and became more profitable because you’re relying on employees rather than volunteers.”

As profits rapidly increased, the PTO started amassing a surplus. The first of what would become three annual $100,000 lump-sum gifts to the transportation fund was an attempt to reduce the surplus. The district did not use the full amounts of those gifts each year, making rollover funds available to help with the after-school busing program.

The AAPSEF, whose revenue for the 2010-11 fiscal year was $607,170 according to non-profit database Guidestar.com, uses donations from individuals and companies in the community to fund a variety of activities in the district every year, ranging from the Pioneer High School planetarium, to the fifth-grade instrumental music program, to microgrants for teachers with innovative classroom ideas.

“We were really happy to partner with the PTO on this bit of funding and we see it as a great example to the community of how folks can come together to keep our schools great,” Rush said.

“Our public schools are such a vital part of why people move here, why they do business here, and why people stay in this community. We were really happy to be able to be a part of this.”

Ben Freed covers business for AnnArbor.com. You can sign up here to receive Business Review updates every week. Reach out to Ben at 734-623-2528 or email him at benfreed@annarbor.com. Follow him on twitter @BFreedinA2