When a school wants to raise money for a new playground or to upgrade the computer lab, they often turn to a tried and true fundraising method – crowdfunding. Lots of school districts are hands off when it comes to the crowdfunding campaigns that run in their schools, but that approach comes with big risk.
Just one look at some headlines will tell you why your school district needs a school crowdfunding policy with specific guidelines and procedures. A well-defined policy will reduce the chances of mismanagement, fraud, and legal complications that ultimately impact a school district’s reputation.
Adding guardrails to school fundraising doesn’t have to be punitive or complicated. All it takes is creating and implementing a school crowdfunding policy that:
When done well, a policy for school crowdfunding encourages transparency and accountability that builds trust and credibility.
At worst, crowdfunding campaigns in schools run without clear guidelines or a defined policy open up the opportunity for ethical breaches and financial misappropriation. At best, they can result in a lack of communication around the use and flow of funds. Both scenarios are problems for school district leaders.
Legal risks also give school districts good reason to implement crowdfunding policies. When it comes to a failure to comply with tax laws and donor rights, districts can suffer the consequences of fines, legal complications, and reputation damage.
A crowdfunding policy helps ensure compliance with all relevant laws and regulations, and is the best way for a school district to protect itself.
While some states have comprehensive policies that school districts can easily adopt to govern parent-led crowdfunding, other states are just starting to dive into providing guidance. That leaves many district leaders in the position of having to craft their own policy. To be effective, a school district crowdfunding policy needs several key elements.
First, it should include the approval process for crowdfunding campaigns in schools. That means establishing a clear proposal submission process that outlines your criteria for eligibility, required documentation, designated approvers, and timelines.
Second, your school district crowdfunding policy must establish financial management protocols by defining how funds will be collected, tracked, and reported. In addition to specifying how funds will be allocated and used, it should also mandate a frequency for financial reporting from the fundraising group and a profit analysis at the conclusion of the campaign.
Finally, the crowdfunding policy for your school district should mandate use of an approved crowdfunding platform that makes the submission and approval process easy while providing transparency into and management of fundraising activity for district leaders.
Introducing a crowdfunding policy in your district and getting schools, teachers, and parent-led groups to adhere to it is all about timing and training. The start of a new school year provides a natural transition time for a new policy. Conducting mandatory training sessions to help people understand the policy is a good way to increase compliance.
Because crowdfunding has become such a popular way to raise money for schools, many leaders including those in Tennessee and North Carolina, have already implemented policies in their district. Using their experiences for guidance and understanding about what worked and what didn’t can be extremely helpful.
Ultimately, school districts with crowdfunding policies that have clear guidelines and procedures can mitigate the risks associated with crowdfunding campaigns such as fraud and mismanagement.
Beyond gaining transparency and reducing risk, a comprehensive policy ensures that funds raised are tracked and used properly while ensuring campaigns run smoothly for everyone involved.
