Crowdfunding Best Practices & Guide for School Districts

Crowdfunding has become a powerful tool for today’s classrooms and school programs, offering an efficient way to raise funds by reaching out to hundreds, if not thousands, of people online. Campaigns can be set up quickly and shared widely, making it a popular choice for schools looking to supplement their budgets.

However, with great opportunity comes significant risk. Crowdfunding can expose organizers, donors, schools, and districts to various liabilities, especially if there are no established policies or procedures in place. Over recent years, multiple publications from state and local school boards, education law firms, state auditors, and media outlets have highlighted these risks and provided guidance for managing crowdfunding efforts.

To help administrators make informed decisions about crowdfunding in their districts, we have consolidated best practices from four key publications:

1. “Crowdfunding in Public Schools: Mitigating Potential Liability through Effective Policies” by Erin Duryea Gilsbach, Esq., for the National School Board Association’s Council of School Attorneys (COSA).
2. “Crowdfunding Classrooms,” a Special Report by Dave Yost, Ohio Auditor of State.
3. “Online Fundraising Helps Schools, But Requires District Oversight,” published by the California School Boards Association.
4. “What School Districts Need to Know About Crowdfunding,” published by the Fisher Phillips Law Firm.

Key Recommendations for School Districts

Here’s what each publication suggests districts should do regarding crowdfunding:

1. Require Prior Administrative Approval of All Crowdfunding Campaigns

• Erin Duryea Gilsbach, Esq.: Individuals wishing to raise funds should obtain written approval, providing details such as the fundraising site, proposed listing, and the profile of the school personnel involved.
• Dave Yost: Mandate that all crowdfunding campaigns be reviewed and approved by a designated school administrator, with donations accepted only with school board approval.
• California School Boards Association: Require prior approval from the superintendent or another designated employee for any fundraising campaigns benefiting the district.
• Fisher Phillips Law Firm: Ensure draft proposals are reviewed before posting to verify compliance with federal and state laws and to protect the school’s public image.

2. Identify an Approved Crowdfunding Site List

• Erin Duryea Gilsbach, Esq.: Develop an approved list of crowdfunding sites that have safeguards against misuse of funds.
• Dave Yost: Designate specific crowdfunding services for teachers.
• California School Boards Association: Identify platforms based on their policies, fee structures, and direct donation mechanisms.
• Fisher Phillips Law Firm: Only approve sites that provide the necessary safeguards.

3. Require That Donations Are Distributed Through the District or School

• Erin Duryea Gilsbach, Esq.: Only permit crowdfunding on sites that send proceeds directly to the school, not individual employees.
• Dave Yost: Ensure donations are sent directly to the school to prevent diversion or misuse.
• California School Boards Association: Apply fiscal accountability measures to donations.
• Fisher Phillips Law Firm: Direct donations to the school, not individual representatives.

4. Establish That All Donations Are Property of the District

• Erin Duryea Gilsbach, Esq.: Make clear that all funds and materials are property of the school and remain so even if the teacher leaves.
• Dave Yost: Ensure donations are promptly entered into district inventories or bank accounts.
• California School Boards Association: State that funded resources will be owned by the district.
• Fisher Phillips Law Firm: Specify that donations remain with the school.

5. Establish Review & Approval Criteria

• Erin Duryea Gilsbach, Esq.: Review proposals to avoid legal liabilities and ensure a positive public image, restricting student images.
• Dave Yost: Ensure compliance with laws governing student information confidentiality and district education philosophy.
• California School Boards Association: Outline criteria for approving campaigns, ensuring alignment with district goals and laws.
• Fisher Phillips Law Firm: Deny permission where legal issues are present, consulting legal counsel if necessary.

Leveraging Destiny Fundraising Manager

Destiny Fundraising Manager helps districts support online fundraising by providing comprehensive oversight and financial control. The platform offers tools such as automated campaign approval processes, accounting code tracking, and detailed reporting of all fundraisers, ensuring compliance and transparency.

For administrators looking to navigate crowdfunding effectively, refer to our detailed guide, “How to Make Crowdfunding Work in Your School District (A Step-By-Step Guide),” which covers the processes followed by specific districts to address these issues successfully.

Additional Resources

For more information on crowdfunding, including access to the publications, policy examples, procedure examples, and presentations, visit our resources page to download them for free.

View Additional Crowdfunding Resources