Schools Tap Into Online Fundraising to Expand Budgets

Karen Tyler, the principal of Erie Day School, didn’t quite know what to expect when her private K-12 school signed up to be a part of Erie Gives, a completely digital one-day fundraiser in which members of the community are encouraged to donate to any nonprofit in the Erie, Pa., area.

Ms. Tyler’s uncertainty turned to joy in a matter of hours when the day arrived last month. Thanks to a well-organized, Web-based fundraising effort that included Facebook posts and emails to parents, alumni, and previous donors, her school raised $52,500 in 12 hours.

The Erie Community Foundation provided the online fundraising platform and the broader public awareness campaign, but the school worked to identify and contact the donors. The school—which was not charged a fee to use the platform—then customized its pitches to donors.

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“We didn’t know what to expect, and we were delightfully surprised,” said Ms. Tyler.

As public and private schools look for new and more effective fundraising tactics to shore up stagnant budgets or pay for new initiatives, many have turned to online fundraising. Some, such as Erie Day School, take their own customized approaches, while others are turning to a roster of companies that provide online fundraising services.

School officials say the online approach requires much less time than traditional fundraising efforts and tends to generate as much money, giving them opportunities to blend both approaches. But critics question whether online fundraising could have the effect of widening equity divides between schools with the technological resources to take advantage of web-based fundraising and those that don’t.

Donors Browse

DonorsChoose, a nonprofit based in New York City, generated $80 million in donations for schools around the country over the past school year.

Cesar Bocanegra, the chief operating officer of DonorsChoose, attributed the success to increased interest in education philanthropy, word-of-mouth outreach, and the immediate results that sites like DonorsChoose can provide.

“Even in this economic downturn, when other nonprofits are struggling to survive, we’ve been growing every year,” said Mr. Bocanegra.

With DonorsChoose, teachers submit projects to the site, which are then posted in an online database. Potential donors can browse and donate to any project. When a project is fully funded, site administrators send the requested materials to the teacher. DonorsChoose generates its own revenue through optional donations tagged to each school transaction.

At Cesar A. Batalla School in Bridgeport, Conn., a public K-8 school where 99 percent of the 1,063 students qualify for free or reduced-price lunches, administrators turned to DonorsChoose to help pay for 246 school projects over the past five years. The school received $81,322 during that time, including $31,606 during the 2011-12 school year alone.

“It’s working out great,” Hector Sanchez, the principal of Cesar A. Batalla, said about the impact DonorsChoose has had on his school.

Other online-fundraising companies follow a similar model.

Adopt-A-Classroom is based on the same principle, but with the key difference that donated funds are earmarked for a classroom instead of a particular project. Teachers shop online for classroom supplies from a list of affiliated vendors once the funds are secured. The nonprofit company raised $2.6 million in 2011. Vendors typically donate an average of 13 percent of their sales to Adopt-A-Classroom, which is how the company earns money.

Digital Wish, based in Manchester Center, Vt., combines the approaches of DonorsChoose and Adopt-A-Classroom, letting donors pick a particular teacher or classroom, but the platform deals strictly with technology purchases. Digital Wish, also a nonprofit, has received more than $10 million in donations since 2009. The company relies on foundation grants and donations to operate.

Concerns About Equity

Some observers express concern, however, about whether crowd-sourced digital fundraising is taking the right approach.

Purchases of small products and other help around the edges can supply some of the extras that schools want to provide, but reliance on fundraising efforts to fix budget gaps can promote inequities, said Amanda Broun, a senior vice president of the Public Education Network, a Washington-based association of local education funds and individuals working to improve schools in low-income communities.

Ms. Broun also said system-level improvements should get preference, as the exclusive nature of the donations can be troubling. “If it turns out that [certain resources] are beneficial to childhood learning, it shouldn’t be just one community that gets them,” she said.

Despite those equity concerns, which arise with almost any kind of school fundraising, schools are seeking out more opportunities to engage in online fundraising.

Stacey Boyd, the founder of San Francisco-based Schoola, a for-profit online-fundraising company, said demand from schools could create more diversity in the market for such fundraising, giving schools more options.

Schoola uses a daily-deals-style model for raising money. With Schoola, a school’s PTA negotiates online deals and discounts with local merchants, and the merchants agree to donate between 15 percent and 50 percent of certain proceeds to the PTA. In return, the school advertises the deals or discounts that were agreed upon with those merchants in newsletters, emails, and websites. When parents, students, or educators eat at a restaurant, for instance, they let the restaurant know to donate a percentage of their bill to Schoola, which in turn funnels the money back to the PTA.

A Schoola fundraising even typically brings in between $3,000 and $8,000 for a school, Ms. Boyd said.

And while Schoola and other online-fundraising companies might not completely eliminate traditional fundraising options any time soon, educators and parents say new methods of fundraising can help reach community members who wouldn’t normally donate.

“Parents are generally tired of doing wrapping-paper fundraisers and cookie-dough fundraisers,” said Michelle Parker, the president of Second District PTA, a parent-teacher group for the 53,000-student San Francisco school district. Several San Francisco schools recently used Schoola to generate about $3,500 for parent-teacher groups in the city’s Noe Valley area.

New fundraising efforts can provide good ways to help schools in tight economic times, but a different view on where donations should go is necessary for the long-term sustainability of philanthropic efforts, said Hildy Gottlieb, a co-founder of Creating the Future, a Tucson, Ariz.-based nonprofit group working to improve communities. If fundraising efforts are going to thrive, she said, schools need to make sure the money is going to the right places.

“Right now, we’re funding a fix that we’re not even sure is working; … it’s like putting our fingers in the hole in the dam,” Ms. Gottlieb said.

But Ms. Boyd emphasized that online fundraising is gaining in popularity because just about all schools—like those in her company’s home state—are faced with tight or dwindling budgets.

“Simply waiting for the California legislature to solve the problem isn’t going to help programs that need funding right now,” she said.