Recently, we had the opportunity to chat about crowdfunding best practices with David DeSchryver, Senior Vice President and Co-Director of Research at Whiteboard Advisors. David holds a J.D. from the George Washington Law School and has significant experience advising districts on the legal ramifications of crowdfunding in public schools. He’s also spoken on the topic at conferences for the Association of School Business Officials (ASBO) International and been published in their monthly journal, School Business Affairs.
How should school districts define “crowdfunding?”
The first step in developing an effective crowdfunding policy is to define the term. Crowdfunding needs to be addressed separately from your district’s current fundraising or grant policy because it’s a unique practice benefiting your students, teachers, and schools. It’s a different form of fundraising and a different kind of grant. Crowdfunding is also a school-based practice, and so it needs its own definition to incorporate its own guardrails and clarify the roles of teachers, principals, and district administrators. You can avoid confusion with non-school based crowdfunding by establishing clear school-based rules and objectives to ensure purposeful use of the service.
What types of crowdfunding platforms help districts? Can others hurt them?
There are a lot of crowdfunding platforms available, some focused on the general public, and a few focused on serving schools. To make sure your district is only using platforms that help the district and don’t expose you to additional liability, you should require these key best practices:
- Prohibit cash. All donations are made in the form of materials and resources. Prohibit cash payments so you don’t get on the wrong side of cash management rules for your district or state.
- Property of the school. Materials received become property of the school and district to support your students, and that policy is reinforced by the crowdfunding service.
- Protect privacy. The platform must have built-in safeguards to protect the privacy of your students. Be sure it is FERPA compliant and poses no threat to your students.
- Tracking and reporting. The crowdfunding service must offer clear and granular tracking and reporting on the projects created and materials donated to your district.
- Reputation guard. To ensure that it is reputable and transparent on its fee structure, the platform should be a charity with at least a 3-star rating on Charity Navigator.
When these conditions are met, the risk of using a crowdfunding platform goes down. You’re mitigating the liability, and the opportunities presented by crowdfunding for your schools goes up. You can better tap into teacher energy and safely generate new resources for your schools and students.
If my district wants to create a new crowdfunding policy or procedure, what kind is most effective?
Your district’s policy or procedure needs to protect you against potential unintended consequences of crowdfunding while also guiding the actions of your teachers, principals, and administrators. Everyone needs to understand their roles and responsibilities. You can likely cover those bases with a procedure that:
- clarifies which district staff are eligible to create crowdfunding projects
- mandates that teachers only use district-approved crowdfunding platforms and list them
- requires prior district approval if teachers want to use any site not on your vetted, pre-approved list of platforms
- offers teachers at least one district-approved crowdfunding platform to use
- specifies that approved platforms must continually meet all best practices mentioned above regarding material management, school ownership, cost transparency, accountability, FERPA compliance, and student safety
The right type of policy or procedure will help you avoid unexpected violations of cash management rules and make sure the benefits of crowdfunding adhere to your district’s internal controls. Implementing the right procedure is a process, not a destination, so there needs to be ongoing review to make sure the platforms your teachers use meet best practices.
Wouldn’t it be safer for districts to just disallow all teacher-led crowdfunding?
A good policy or procedure protects your district from harmful activities, mitigates risk, and fosters teacher creativity. Crowdfunding prohibitions are reactionary. School officials enact them in the absence of distinct school practices that define school-based crowdfunding differently than those that serve the general consumer. You want to create something that specifically helps your schools, and prohibitions do not accomplish that. Do the work to clarify the rules and create guardrails against liability so that students and staff can benefit from generous donations.
Incomplete guidelines also invite unwanted situations and liabilities. I recommend districts leverage the work that’s already been done by taking model policies and building on that intellectual work to create guidelines that best serve their district’s goals and clarify what platforms and services can and can’t be used.
Should a district require teachers to get administrator approval for each new project they create?
There’s a big difference between multi-stage district approval procedures and necessary monitoring provisions. You don’t want to create extra work for your administrative team, principals, or your teachers. I recommend looking at crowdfunding platforms that have technology on the backend that can do these things for you. A high quality, approved crowdfunding platform should trigger role-based communication (emails to principals and administrators), automate inventory reporting, monitor teacher usage, and keep everyone synchronized across the district. The best systems allow teachers and administrators to operate without unnecessary layers of review and approval because the platform should be trusted to keep everyone informed.
Making sure your teachers can create new projects in a timely manner allows them to tap into their creativity. This upfront work is just being mindful of the design that allows for quick thinking at the classroom level. Administrators are great at setting the guardrails, grant parameters, and determining the direction to point teachers and schools, but the creative stuff happens at the classroom level. You should enable teachers to get excited about the use of crowdfunding in a way that propels the mission of the school and district. Be thoughtful about how your procedures are designed and use a platform’s built-in backend technology to accelerate and automate the administrative oversight that is required.
Where can I see examples of other districts’ successful crowdfunding policies?
AASA has provided a great crowdfunding best practice and model policy toolkit. You’ll find a treasure trove of materials, resources, and policy examples to learn how to create a policy or procedure that balances mitigating risk and tapping into the energy of teachers.When we do that well, districts can benefit from these new funding streams and opportunities.Some good examples of districts with great policies that get that done:
- The School District of Philadelphia was an early leader in crowdfunding and created a policy in 2016 to support teachers and set procedural guardrails.
- Hamilton County Schools in Tennessee created a blanket approval process for pre-vetted platforms like DonorsChoose. This relates back to the facilitation of an efficient program. Using the hallmarks of a great school-based crowdfunding platform that they could pre-vet, the district allows teachers to move more quickly and build projects that accelerate the mission of the district and learning in the classroom.
- Richmond Public Schools created a firm policy and published guidelines that help teachers use pre-approved crowdfunding platforms with ease. They found the right balance between ensuring proper oversight and monitoring while enabling teachers at the classroom level to support their students, engage the community, and take advantage of timely donation opportunities.
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