Classmunity was honored to present on Common Fundraising Risks & Strategies to Address Them at WASBO 2019. Our own Willow Macy was joined by Jason Tadlock, Superintendent of the Elkhorn Area School District and James Macy of the von Briesen law firm. Below we recap some of the key points covered in the presentation.

School fundraisers are becoming increasingly important in this era of reduced federal and state funding. While fundraising is a valuable tool that allows parents and community members to support your district’s students, it can open your district to a variety of fundraising risks. It is important to have policies that assess each fundraiser for potential risk and proactively mitigate them.

Is it a School Fundraiser?

At the onset of a fundraiser it is important to determine if it is a school or non-school fundraiser. A school fundraiser is one run by a teacher, parent, coach, club support organization; whereas non-school fundraisers tend to be run by independent foundations. The district is ultimately responsible for any school fundraiser, and the business office should be aware of and involved with all such fundraisers.  The first step should be to ensure the fundraiser has been vetted. Whether it is product, donation, or event based, you should ensure that the fundraiser is safe, supervised, and aligns with your district’s values. Your district should also ensure the fundraiser organizers have a financial accounting process that is consistent with district policy. If the fundraiser is handling cash, fundraising personnel should be trained in security policies related to tracking cash (e.g. paper receipts, Classmunity virtual lockbox) and safe storage (e.g. safe, lockbox).

In the case of non-school fundraisers districts have less direct control. However, if something goes wrong it can still reflect negatively on your district. It is prudent to encourage the individuals running non-school fundraisers to follow district fundraising policy and for your district to monitor fundraiser progress.

Involving the Business Office

The business office should keep tabs on the personnel running fundraisers. This is important to head off problematic personnel issues, such as fundraiser money being deposited into a private, non-district bank account; lax cash handling policies leading to missing cash; and cash going missing overnight from an un-secured location in a teacher or coach’s office. All responsible personnel should be given a handbook of fundraising process requirements which should explain policies to prevent these and other issues. In turn, the personnel should sign off acknowledging that they have received and will abide by the policy  in the handbook.

Legal Risks

Legal pitfalls are another area of fundraiser risk for districts.  Some common areas where fundraisers may cause districts to run afoul of the law include:

 

  • Title IX Issues: Although Title IX doesn’t require you to spend dollar for dollar on boys and girls sports, you are required to ensure equal benefits as a whole. An example when this could cause a problem is if a district has separate boys and girls booster clubs that raise substantially unequal amounts of money. If this results in inferior facilities for girls sport, you may need to step in as a district and equalize the situation.
  • Constitutional Issues: Any time you sell tangible items with customizable messages (e.g. personalized bricks to be incorporated in a donor wall), you must be aware that the messages are not immune to the Freedom of Speech and the Separation of Church and State. To prevent obscene or otherwise inappropriate messages, you can choose to limit messages to a name and a date. Alternatively, you may prohibit messages that do not align with your District’s mission.
  • Negligence Issues: Districts act in Loco Parentis (in place of the parents) when students are in their care. Lack of proper supervision is one of the most common causes of negligence claims against school districts. All fundraisers should be assessed for safety concerns and appropriate safeguards enacted.
  • Intellectual Property Issues: Multimedia and other products may be protected by copyright or other laws, and this can sometimes impact fundraisers. For example, if school spirit wear incorporates the likeness of popular television or movie characters you may be infringing a copyright or trademark. Likewise, a club selling admission tickets to a movie night may also run afoul of the law.

 

These are just some of the risks associated with school fundraising. It is important to work with your district’s legal counsel to identify your district’s unique risks and appropriate strategies to mitigate them.  If you are interested in more information, we have developed a worksheet to help evaluate vulnerabilities. Email contact@classmunity.com to request a free copy!

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