Auditor’s Report Urges School Districts to Adopt Policies to Govern Use of Online Fundraising
Columbus – Across Ohio, hundreds of teachers are using crowdfunding – online fundraising – to generate donations to provide materials to enhance the educational experience of their students. A new report and survey from Auditor of State Dave Yost found that many school districts do not have policies to guide teachers and administrators on how to use crowdfunding properly. The report provides best practices for districts considering these policies.
Every school year, teachers dig into their own pockets to buy educational supplies to enhance the teaching they do in their classrooms. By one estimate, teachers spend an average of $600 a year of their own money to buy things that school districts and parents don’t or can’t provide for students. This ranges from basics such as notebooks and pencils to specialized furniture designed to help special-needs students focus on learning.
It is a credit to Ohio’s teachers that they are willing to make a significant financial sacrifice for their students. But these sacrifices can do only so much. Consequently, teachers have turned to crowdfunding websites to seek donations of money and educational materials, and local school officials have asked Auditor Yost’s office for guidance to keep teachers and administrators from inadvertently making a misstep.
“With an increase in donor-directed charitable donations, there’s no question more Ohioans will use these online giving tools in the future to invest in areas that are important to them,” Auditor Yost said. “Because children are our greatest resource, I expect we’ll see increasing requests for donations to education-related issues, and schools need policies to avoid any issues.”
Auditor Yost added: “While crowdfunding can be an important source of funds and materials to enhance learning, it also comes with some risks. Adopting a crowdfunding policy can help school district administrators and teachers avoid these risks. Many school districts have policies in place, but our survey found that many do not.”
About a fifth – 123 – of Ohio’s school districts responded to the Auditor’s crowdfunding survey. Of these, fewer than half – 50 school districts – have a crowdfunding policy in place, while the majority did not. If this proportion applies to the rest of Ohio’s 600-plus school districts, it would mean that hundreds of districts lack these policies.
Dozens of online crowdfunding sites exist, a number of them specifically designed to help teachers. One well-known site called DonorsChoose says that it has helped with 600,000 classroom projects that have raised $621 million from almost 3 million individual and corporate donors. Other familiar crowdfunding sites include AdoptAClassroom, ClassWish, EdBacker, GoFundMe, Indiegogo, Kickstarter, PledgeCents, and YouCaring.
The risks of crowdfunding include compromising student confidentiality, diversion of donations for private use, inviting federal or state scrutiny of educational programs and bad publicity for the school district if a crowdfunding campaign is mishandled.
The report outlines these dangers, suggests ways to mitigate them and urges school districts to work with legal counsel to craft policies to ensure that districts, teachers, students and donors all are well-served.
“These guidelines for crowdfunding will be of great value to me as I support teachers and employees who pursue supplemental funding for our students,” said Dan Wilson, treasurer of both the Mentor Village schools and Kirtland Local schools in Northeast Ohio. “Using these guidelines will ensure compliance with federal and state regulations as well as assuring the donations will support the intended students.”
Wilson was one of the financial officers in Ohio who asked Auditor Yost for guidance.
“As a member of the Auditor of State Regional Advisory Council, I appreciate Mr. Yost's willingness to consider and follow up on input from local governments,” Wilson said.
Auditor Yost’s report said crowdfunding policies should:
• Require that all crowdfunding campaigns be reviewed and approved by a designated school administrator.
• Direct the designated administrator to ensure that the proposed crowdfunding campaign does not violate any federal or state law, including those governing the confidentiality of student information.
• Ensure that the campaign seeks donations that comport with the district’s education philosophy, needs and technical infrastructure.
• Designate which crowdfunding services can be used by teachers. These should be services that send donations directly to the school to ensure that they are not diverted or misused.
• Require that district officials determine if participation with a given crowdfunding site obligates the school district to assume any responsibility to file government-required reports of charitable activities.
• Require that donations be used for the stated purpose.
• Mandate that no donations be accepted without school board approval.
• Establish that all crowdfunding donations are the property of the school district, to be entered promptly into the district property inventory or deposited in district bank accounts so that they are subject to normal financial oversight and auditing.
A full copy of this report is available online.
The Auditor of State’s office, one of five independently elected statewide offices in Ohio, is responsible for auditing more than 5,900 state and local government agencies. Under the direction of Auditor Dave Yost, the office also provides financial services to local governments, investigates and prevents fraud in public agencies and promotes transparency in government.