In this week’s episode, Livingtree CEO Gary Hensley discusses the current situation in K-12 schools when it comes to crowdfunding and the risks that teachers, donors, and the district all face when it’s not done right.
Hi everybody, welcome to this week’s edition of two minutes with Livingtree, my name is Gary Hensley and I’m excited to talk about an important topic which is crowdfunding. It is core to our mission here at Livingtree, but I’d just like to discuss: how did we get here, what is the current situation in K-12 schools when it comes to crowdfunding?
So, a brief history on it: if you go back 10 years ago, crowdfunding was not something that you may have heard, it was a relatively new concept and so therefore you maybe had a few teachers, a few schools, that had participated in something like that. Today, you have anywhere between 20 and 30 percent of your teachers and/or schools that have an online campaign on behalf of their school or district identifying themselves as a teacher or someone related to a school. And because of that scale, districts have had to reconcile with this. Parents don’t want to sell stuff anymore, they are giving stuff online, and you have ubiquitous access to this technology. And because of that, districts are now wrestling with some of the legal, financial, and reputational consequences that come along with that.
So that is our mission here at Livingtree on our Give product to help districts manage that. But the reason for that is when you don’t do it right, you put everybody at risk. It’s one of those scenarios where it really does benefit everyone to have some safeguards in place around this topic. You are giving to a public school which is a government entity, and that money has rules and regulations about how it needs to be received. So it can put teachers at risk for receipting that money on behalf of a school, it can put the donor at risk for assuming that it is a tax deductible donation when it could not be, and it puts the district at risk with some of the district concerns: around FERPA, does it expose student images, is it for an item that might be covered by an IEP for a student so that brings in IDEA regulations, does it comply with our district standards, is it the right message that we want to put out there about what our school district is about and what we are fundraising for?
So there is a whole set of layers about this problem and the first is awareness. That’s part of why we do this is just putting things out there about how schools are funded, what parents feel about fundraising, and the last leg of the stool which is how those risks are associated with crowdfunding. It’s a very powerful tool but it’s got to be used in the right way. We’d like to get your likes and comments, have you been involved in a crowdfunding campaign, and were you aware of some of those risks and liabilities?
Sarah Schwartz’s Education Week blog follows the recent Crowdfunding Research Report published by EdSurge, and outlines many reasons why a multitude of school districts like Metro Nashville Public Schools are banning the use of crowdfunding sites like DonorsChoose.org. With the recent boom in education crowdfunding, Schwartz finds that “leaders are starting to voice concerns” because “they have no way of knowing whether the instructional materials and technology flowing into their schools through individual teacher requests are aligned to district standards” and they worry that “the decentralized process will make it hard to monitor how money is distributed among schools.” Others echoed these concerns, stating that “such sites are problematic for school districts because of lack of adequate controls.”
However, even with these concerns, Schwartz indicates in her research “that banning crowdfunding isn’t the way to go.” Instead, she points out that many leaders aren’t giving up on the “potential benefits” of crowdfunding because of the additional funding, supplies and experiences it provides for students. As the EdSurge crowdfunding report points out, “instead of banning educators’ use of these platforms altogether, administrators should manage teachers’ projects and create a unifying policy for crowdfunding in the school district.”
Many recent publications are supportive of the latter idea, allowing crowdfunding with the right policies and platforms in place. A special report published in July of last year by the Ohio Auditor of State made a similar statement on its cover, that “with sound policies in place, school districts can ensure that online fundraising enhances student learning.” In this report, Auditor Dave Yost provides an informative overview of crowdfunding, surveys of Ohio school districts, specific liabilities of crowdfunding (including student confidentiality, financial controls and accounting, and reputational risks), and best practices for districts.
A few months after it’s publication, the California School Boards Association published guidance recommending that districts “be aware of all such campaigns conducted in the name of the district, a district school or a district employee.” The CSBA recommended that districts adopt policy to govern crowdfunding campaigns, and in it districts should “require prior approval,” list out the “criteria to be considered,” address “mechanisms for financial transparency,” and “identify the crowdfunding platforms that may be used.” Even the National School Board’s Association is currently in the process of revising their “best practices” around crowdfunding for K-12 school districts, and is another resource to watch for in the coming months.
The problem, as many will agree, is the funding gap in America’s Educational system. State and federal funding for public schools dipped sharply during the Recession that began in 2008. Although the numbers have recovered somewhat, many districts are still not being funded at the same level. Today, reports indicate that about 94% of America’s public school teachers are spending their own money on classroom supplies, with the average annual expenditure totaling $480. Some teachers on social media even reported spending thousands of their own dollars to fund projects they find crucial to their students’ education.
While crowdfunding may never completely fill the gap, it has become a saving grace for many teachers, boosters, and parent organizations who otherwise can’t secure funding from their school or district. It has also become a reflection of the changing culture in schools and parents: turning away from the traditional methods of fundraising that require large sums of time and effort with high overall costs, and toward the easier methods of online donations that have lower costs and more transparency.
At Livingtree, we consistently refer to Austin Independent School District, who was one of the two school districts featured in EdSurge’s full crowdfunding report, and Chandler Unified School District as examples of districts who have successfully overcome the challenges of crowdfunding. Leaders from both districts recently participated in a panel at SXSW EDU, and talked about the importance of realizing that fundraising has changed and is now a part of our reality. As Michelle Wallis, Executive Director of Innovation at Austin ISD stated, they chose to implement their current system and platform three years ago because they needed ways to safeguard everybody, including, teachers.
Austin embraced the reality that people want to, and expect to, give online and to have an easy experience doing so. Without a system in place, it becomes the “wild wild west.” Thus, they put together a set of guidelines and set up a system that the district endorsed, supported, and rolled out district-wide. Their system integrates with principal and district approval, so when a teacher posts a campaign, it is automatically sent to the principal and district for review. On the backside, their finances are linked with their bookkeeping system, and then it is all loaded into their donor database where they have tracking, reporting and receipting for every campaign.
Chandler Unified School District was in the same situation about a year and a half ago. As Chandler USD’s Chief Financial Officer Lana Berry stated in the SXSW EDU panel, “we found that we needed a crowdfunding platform because…this is the new method to raise the most amount of money with the best safeguards put in place,” however they “needed to standardize that and approve it.” Berry continued, that “we needed to have a system in place that we were proud of so that when people donated to a Chandler Unified District fundraiser, they knew exactly where their money was going.” So, they started by looking at their policies to make sure they had board policy to back what they were doing. They then looked at their procedures to determine what they allowed. Finally, they looked at what tools were currently being used, and found they had just about every tool out there – GoFundMe, SnapRaise, DonorsChoose. They knew how important it was to have the right processes and procedures in place to help guide their principals and their schools, so they went on a nation-wide search for a platform that would help with guidance, the approval process, account for the dollars that came back in, and that would meet all of the district’s needs.
After finding a platform that met their strict criteria, the district is now in control of their online fundraising and sending their online campaigns through the correct processes and procedures. As Berry says, “It’s important to take the first step and move to implement something because this area is going to continue to grow, it’s the new form of raising money. Parents love it and don’t like the old ways. There are still a lot of mechanisms in the old forms of fundraising, but more and more people are utilizing this new way of giving.”
An important practice to note when it comes to crowdfunding is that districts need an internal review/approval process for every online campaign because only those with a vested interest in the district can properly assess that a campaign meets all district policies, as well as state and federal laws. Even crowdfunding sites that claim to “vet” campaigns before they are launched won’t catch everything pertinent to a particular district, let alone all state and federal laws. DonorsChoose, for instance, has been cited to have campaigns that posed some potentially significant legal and reputational issues for the associated schools and districts, even after going through their screening process.
As Erin Duryea Gilsbach, the Director of Professional and Policy Development for King, Spry, Herman, Freund & Faul, LLC, wrote in an article for the NSBA Council of School Attourneys: “a review of some of the posts from educators on DonorsChoose.org revealed some significant legal issues within the teacher posts themselves, including potential FERPA violations and liability under the Individuals with Disabilities Education Act (IDEA).” She later explains that these posts “included a number of potential FERPA issues related to teacher posted photographs, which were combined with specific written information in the posts about the classes. These descriptions could also legally be considered to be potential IDEA violations, and/or violations of specific district policies. Other posts, while they did not pose any particular threat of liability, painted the schools and/or districts in a very negative light when asking for funds.” Further in the article, Gilsback describes a number of real examples that pose serious risks to the organizers and associated districts.
The point is that even sites that are seemingly more protective can still miss major liabilities or even specific policies from within your district, thus making it imperative (regardless of whether you have a manual process or an automated process built-in to your chosen platform) that your district have some sort of internal review process of all online campaigns. At the end of the day, you have a mix of educators, parent organizations, boosters, teams and clubs who are launching campaigns in the best interest of their students but aren’t always aware of the legal liabilities or the political activities of the school district, which is why districts must safeguard everyone. This type of internal review process ensures that every publicly posted campaign is in the best interest of the district, is in compliance with policies and laws, and is in line with what a district is doing politically.
So, while some districts may go with their first instinct and take the easy route of banning crowdfunding sites, it’s important to realize that this option forgoes the many benefits that crowdfunding has to offer for school districts. With the right platform, school districts can support, and even encourage members to raise funds for additional materials and experiences that they can provide their students. In order to do this, districts must take the first step to be aware of their current crowdfunding situation, and look into their current policies, procedures, and guidelines, as well as what campaigns are out there with a school or the district’s name on it.
It’s also important to be extremely selective of the crowdfunding platform that your district decides to support and endorse. Consider adopting a platform that has everything you need to truly oversee the crowdfunding process in your district – with an automated multi-level campaign approval process, tracking of donations, centralized fund routing, donor management, detailed reporting, and built-in tools for all of your parent organizations, boosters, clubs, teams, and teachers. These features are many of the reasons why Austin ISD, Chandler USD, and districts from all around the country are choosing to partner with Livingtree.
To hear Michelle Wallis of Austin ISD and Lana Berry of Chandler USD talk more about their journeys of successfully overcoming crowdfunding, you can watch their recent 30-minute session at SXSW EDU here:
If you need assistance locating crowdfunding campaigns from within your district, contact Livingtree Sales at email@example.com, and we’ll help provide a detailed report of all campaigns, as well as amounts raised and revenue lost.
For additional resources, Chandler USD and Austin ISD have shared their procedures and guidelines, which can be accessed at learn.livingtree.com/givetogether.
To request more information about how Livingtree Give can help your school district support online fundraising without the complexities, click below:
Online fundraising is a growing area in K-12, and crowdfunding has exploded onto the scene over the last decade. While many students, families, teachers, and schools have embraced this new type of fundraising, school districts are facing unintended liabilities from these types of campaigns. EdSurge collected research on crowdfunding in K-12 over the last year, and just recently published a report of their findings. Among the seven crowdfunding platforms that EdSurge compared, Livingtree Give was effectively highlighted as a platform to:
– “Ensure that money raised through crowdfunding goes directly to the school or district, but that administrators can allow teachers to spend the money wherever they’d like in a secure and trackable way”
– “Maximize district oversight by providing administrators with full reports for campaigns in the district and ensuring that all campaigns have been approved before they’re published”
In the full downloadable report, Austin Independent School District was featured as one of the two “Districts Paving the Way.”
This section of the report uses Austin ISD (pictured below) as an example of a district that has developed strategies to support crowdfunding and boost teachers’ efforts. The district provides Livingtree Give accounts to teachers, boosters and parent organizations across their district. Once campaigns are approved, they feature these campaigns in their Livingtree Give public portal, which donors can access through the district’s website.
Under the Integrations section of the report, EdSurge mentions Livingtree’s integration on Austin ISD’s website which links donors directly to their Give portal. The integration option is offered to all of Livingtree’s customers as part of the district plan.
The report also profiled the Livingtree Give platform, where Chandler Unified School District in Arizona was featured as a “highlighted project.” After going on a nation-wide search to find a crowdfunding platform that met all of their district’s needs, Chandler started their first year with Livingtree Give this fall and had garnered more than $50,000 in donations as of December 2018.
Livingtree is pleased to be recognized among the top crowdfunding platforms, and as one that truly helps districts manage the complexities and eliminate the liabilities of crowdfunding. To learn more about how the Livingtree Give platform can help your district, visit learn.livingtree.com/give.
To further understand the process of crowdfunding in K-12 schools, the liabilities that districts are facing, and how to develop policies and procedures around it, visit the EdSurge Report page and download their full report.
Crowdfunding has exploded in K-12 education. The number of campaign requests, as well as the number of donations towards these campaigns have significantly increased over the years. Data from one popular crowdfunding site for teachers showed that during the 2017-2018 school year, over 254,000 campaigns were funded, resulting in over $152 million in funds raised for K-12 classrooms, projects, and experiences.
This type of online crowdfunding has opened enormous opportunities for K-12 school districts to raise funds for projects, equipment and supplies. Crowdfunding is ultimately helping close the education funding gap and support the needs of schools and students. Its efficiency and effectiveness have been proven not only through the generous donation amounts, but also through the speed and ease compared to traditional methods like burrito or donut sales.
Despite the many benefits of online crowdfunding, school districts need to be aware of the associated risks and liabilities. Every single campaign that is posted poses serious liabilities for a school district, depending on how the campaign is pitched, what names are used, what the campaign is raising funds for, and what type of student information (photos, names, etc.) is displayed. Every donation made to the campaign also comes with financial liabilities for a school district, including where that money is routed, who controls or oversees those funds, who owns the funds, how inventory is accounted for, and how the school district manages to report those funds.
The lack of proper built-in oversight, tracking and reporting on crowdfunding sites – even education-specific sites, present significant legal and reputational risks for school districts across the country. Every school district should have oversight for any online fundraiser conducted in the name of the district, a district school or a district employee.
At Livingtree, it’s our goal to help school districts understand the risks of crowdfunding, and better manage the process within their district to ultimately raise more money. Due to the recent publications from state auditors and school board associations on crowdfunding, Livingtree decided to take a deeper dive and report what is happening right now. To provide a better picture of the current risks school districts are facing this year, we took the latest data from the earlier mentioned crowdfunding website to develop this Mid-Year Education Crowdfunding Report.
According to the crowdfunding website, over 145,000 projects have been fully funded so far in the 2018-2019 school year. At that pace, we expect to see around 290,000 fully funded campaigns by the end of this school year, an increase of 36,000 campaigns from the previous year. In addition, this year’s completed campaigns have raised over $77 million of donations for teachers and school projects. Based on that number, we’d expect to end the school year with around $154 million of donations, an increase of $2 million over last year. Since this data is only taken from one popular crowdfunding site, it’s likely that the overall crowdfunding totals are much greater.
To further understand this issue, Livingtree compiled all of the campaign data from the crowdfunding site for the 2018-2019 school year and composed lists to help identify which states currently have the highest risk when it comes to education crowdfunding. Below, we’ll examine the states with the Highest Average Amount Raised per District, the Highest Average Number of Campaigns Posted per District, and the Highest Average Number of High Risk Campaigns Posted per District.
Note: the data is organized to represent states in amounts per district to give the most accurate representation of every state. Hawaii and the District of Columbia are not represented in the data.
|State||Avg Amount Raised Per District||Total Amount Raised (Statewide)|
Florida made number one on the list for the highest amount of money raised from the crowdfunding site, averaging out at over $57,000 per school district. The next three states all averaged over $40,000 in funding per school district.
Regardless as to whether these donations reach schools in the form of funding or project items, a district must be able to ensure that every dollar is tracked and properly routed, and oversee the process to maintain accurate inventory and donation reporting. State-wide totals are also included in this report for reference.
|State||Avg Number of Campaigns Per District||Total Number of Campaigns (Statewide)|
Florida again tops the list at number one for the highest average number of campaigns posted from the crowdfunding site, at 107.2 campaigns per school district so far this year. The higher the number of campaigns being posted, the higher the risks and liabilities for school districts without fundraising controls in place. And without the ability for school districts to review and approve campaigns before they go live, it’s almost impossible to be sure that the campaign meets all of school district’s requirements.
|State||Avg Number of High Risk Campaigns Per District||Total Number of High Risk Campaigns (Statewide)|
Nevada leads the way for the highest average number of high-risk campaigns posted from the crowdfunding site, at 7.7 high risk campaigns posted per district so far this year. At Livingtree, we identify high risk campaigns as those classified on the crowdfunding website as either “Special Needs” or “ESL.” The classification of high risk is due to the fact that “Special Needs” campaigns have a high possibility of violating a student’s IEP, which a district would be legally required to fund through IDEA. There are also special services that ESL students qualify for that can’t be funded outside of the school district. These are all in addition to the existing risks that go along with crowdfunding, making them much higher risk campaigns. So far this school year, “ESL” and “Special Needs” are ranked as the 7th and 8th most popular project categories.
Again, it’s important to note that these statistics were generated from a single crowdfunding site, and that this is only a piece of the “crowdfunding picture.” We’d expect that total crowdfunding numbers are much larger, however it is difficult to collect data from every single site out there.
Because of these statistics and the associated risks, some districts take the easy route by setting policies that ban crowdfunding. However, this option forgoes the many benefits that crowdfunding has to offer for school districts, and creates a new task of having to police the large number of crowdfunding sites to ensure district members aren’t using them.
The other option is to evaluate online fundraising management options and adopt one that provides an automated district approval process for all campaigns, tracks all donations, routes funds through a district account, gives the district access to their donor information, provides aggregated reporting for every campaign, and has built in tools to make fundraising easy for any PTA/PTO, booster, club, team, or district member.
Once a management platform is selected, procedures and guidelines can be written to accompany the school district’s fundraising policies (no, you don’t actually have to re-write policies!). These should clearly outline rules for only using the district’s chosen fundraising management platform, campaign approval criteria, required campaign content, and ownership of the funds raised.
Once this is all in place, start fundraising! With your district overseeing the entire fundraising process and having official procedures to guide the process, fundraising becomes manageable and easy.
If you are curious about your school district’s risk potential on the crowdfunding site we used, check out the free tool created by Livingtree to evaluate your district’s risk potential, dollars collected, and number of campaigns posted so far this school year: https://learn.livingtree.com/risk-analysis
Is your school district ready to start evaluating fundraising management solutions? Then download our free Crowdfunding Considerations Guide for K-12 School Districts and know the 7 important areas to evaluate when looking at fundraising sites: https://try.livingtree.com/crowdfunding-considerations-blog/
Data Sourced from:
Over the years, there has been a growing spotlight on the education funding gap. The gap has become more of a problem for many K-12 school districts with recent statistics showing an increase in teacher spending on school supplies.
Many schools and districts are finding that traditional fundraising can no longer cover some of the greater costs that are needed, and as a result of the mass growth in technology, an increasing number of K-12 members are now requesting funds through crowdfunding sites. These sites are providing valuable opportunities for K-12 staff, organizations, and teams to raise funds for additional resources and experiences, while addressing the needs of our schools and students.
However, these Crowdfunding sites were not built specifically for school districts and lack the necessary oversight and control. Every single online fundraising campaign that is posted poses serious liabilities for a school district, and can result in a number of legal and financial violations.
As a result of the liabilities, some districts take the easy route by setting policies that ban crowdfunding. However, this option forgoes the many benefits that crowdfunding has to offer for school districts, and creates a new task of having to police the large number of crowdfunding sites to ensure district members aren’t using them. It can also imply a lack of trust in their educators. Until the educational funding gap is solved, schools should absolutely fundraise online, however it should be done in an appropriate way. That’s why it’s important that district leaders be aware of the liabilities associated with crowdfunding, and use the information to evaluate crowdfunding platforms for their district.
Below, we’ve put together the 5 Liabilities of Crowdfunding that every K-12 District should know:
1. Fundraising on the School or District’s Behalf: Most Crowdfunding sites will allow anyone within the district to launch fundraising campaigns. This means they can use the name, logo, or images of the school or district without any form of consent. Based on how the campaign is pitched, the campaign can reflect poorly on the district, and the results of the campaign can cause PR nightmares.
2. Sharing Student Information: Everyone loves to see pictures and know the students that are being directly impacted by their contribution, however this can be a largely overlooked FERPA violation. Sharing student images or names without consent can create huge liabilities for a district.
3. Routing Funds through Personal Accounts: Many Crowdfunding sites transfer the lump sums directly to the person who posted the campaign, which raises legal and financial accountability issues. In most cases, this is also a violation of district and state policies that affirm that the District Treasurer is supposed to be in charge of the funds.
4. Ownership: Once completed, who actually owns those funds or products that are produced through that campaign? Was the campaign personal or on behalf of the district? Is that the property of a teacher, a school, or the district? Some teachers will tell you that everything they raise is for the school, while others will tell you differently if policies are not in place to outline this problem.
5. Existing/Incompliant Resources: It’s actually a common occurrence for staff to raise money for items that either already exist elsewhere, or already have funding. It’s also not uncommon for staff to raise money for technology that isn’t approved or that the curriculum isn’t available for.
Livingtree Give takes the same concept of online fundraising, but uses features built specifically for school districts to do so in a coordinated fashion in order to eliminate these liabilities. Give provides district oversight to every fundraiser, while also assuring donors that every single campaign has been vetted and approved through the district’s built in and customizable approval process. District admin can now track every single dollar, route funds through a single district account, easily disperse funds to the appropriate accounts, and generate reports – all in real time.