Over the years, the spotlight on the education funding gap has grown. This gap has increasingly become a problem for many K-12 school districts, with recent statistics showing an uptick in teacher spending on school supplies.

Many schools and districts are finding that traditional fundraising can no longer cover some of the greater costs needed. As a result, an increasing number of K-12 members are now requesting funds through crowdfunding sites, thanks to the mass growth in technology. These sites provide 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 online fundraising campaign that is posted has potentially serious liabilities for a school district and can result in several legal and financial violations.

Due to these liabilities, some districts opt to ban crowdfunding altogether. However, this option forgoes the many benefits that crowdfunding offers school districts and creates a new task of having to police the numerous 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 resolved, schools should absolutely fundraise online, but it should be done appropriately. That’s why it’s crucial that district leaders be aware of the liabilities associated with crowdfunding and use this information to evaluate crowdfunding platforms for their district.

Bonus info: Get the School District Crowdfunding Considerations Guide for a real example of the risks that school districts face and the seven areas that administrators need to consider.

Below, we’ve put together the five liabilities of crowdfunding that every K-12 district should know:

1. Fundraising on the School or District’s Behalf Most crowdfunding sites 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. Depending on how the campaign is pitched, it can reflect poorly on the district, and the results can cause PR nightmares.
2. Sharing Student Information Everyone loves to see pictures and know the students directly impacted by their contribution. However, this can be a largely overlooked FERPA violation. Sharing student images or names without consent can create significant 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, raising legal and financial accountability issues. In most cases, this also violates district and state policies that affirm the District Treasurer is supposed to manage the funds.
4. Ownership Once completed, who owns those funds or products produced through that campaign? Was the campaign personal or on behalf of the district? Is the property owned by a teacher, a school, or the district? Some teachers will say everything they raise is for the school, while others may claim differently if policies are not in place to clarify this issue.
5. Existing/Incompliant Resources It’s common 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 for which the curriculum isn’t available.

These are all problems that school districts are solving with Destiny Fundraising Manager. Destiny Fundraising Manager provides district oversight to every fundraiser while assuring donors that every single campaign has been vetted and approved through the district’s built-in and customizable approval process. District administrators 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.