Crowdfunding: Simple Solutions to Big Liability

Type: Article
Topics: Finance & Budgets, School Administrator Magazine, Technology & AI

December 01, 2017

Legal Brief

CROWDFUNDING IS A frequently discussed topic in my administrator training sessions on legal issues in school technology. I typically ask school administrators: How many crowdfunding projects are out there on the internet right now, actively raising money in the name of your school or district? What’s the purpose of these projects?

Then I share with them a selective list of the most common crowdfunding websites and give them a few minutes to investigate on their smartphones. More often than not, they are surprised at what they discover.

If you don’t know how your teachers are using crowdfunding today, you should.

Spotting Issues

One elementary school principal found a project posted by a teacher in his building who was asking for basic supplies, such as facial tissues and Clorox wipes, claiming that her classroom needed them to maintain sanitary practices. The principal was horrified. “This makes it sound as if we don’t supply our classrooms with simple necessary hygiene-related items!” he said.

A superintendent found a post where a special education teacher stated, in the project description, that the requested materials were necessary for her to implement the individual education plans of the students in her class. The superintendent pointed out, correctly, that the post may be tantamount to admission of a violation of the IDEA.

Some crowdfunding posts asked for large quantities of sugary snacks to be used as rewards to students, contrary to their schools’ wellness policies and federal regulations. One teacher’s solicitation disclosed that all of her students had special education classifications of emotional disturbance. Her profile photo, which was readily viewable on her crowd-funding post, showed the students in her class. This combination of information violated privacy rules under both FERPA and IDEA.

There is no hiding from the problem. Nearly all of the crowdfunding posts included detailed information about the school for which the items were sought, with many even providing a link to the school’s website.

A Policy Solution

Fortunately, with effective leadership and proactive policies, the costly liability issues posed by unchecked crowdfunding can be eliminated, leaving a wonderfully creative revenue source.

School administrators can proactively address crowdfunding by developing procedures to:

 Regulate use of district intellectual property and fundraising on behalf of the district.
Restrict who can use the district’s intellectual property (such as the school’s name, logo, mascot, etc.) for fundraising purposes, as well as who can raise funds on behalf of the district. These restrictions should apply to all individuals and organizations seeking to raise funds on behalf of the district, including employees, booster clubs and PTAs.

 Require administrative approval of all postings before they are published.
Require advance approval of the following: the exact text of the proposed post; the crowdfunding site(s) to be used; any images that will be visible on or around the post; the dates of the posting period; the items/amount of funds being requested; and a copy of the personal profile of the requester as it is listed on the site.

 Prohibit posting of student images.
The use of student images should be prohibited, and all photos should be carefully reviewed to ensure that no personally identifiable student information is revealed in photos (student information visible on the computer monitor, a student file on a teacher’s desk, etc.).

 Limit crowdfunding to approved sites.
Consider approving only sites that have education-friendly, fraud-prevention safeguards in place, such as those that require materials and funds raised go directly to the school for which the funds were raised and not to the individual who raised them.

 Require that crowdfunded items remain with the school.
Mandate that all funds or materials raised on behalf of the school through crowdfunding remain with the school.

ERIN GILSBACH is an attorney and director of professional education and policy development at King, Spry, Herman, Freund & Faul in Bethlehem, Pa. 
Twitter: @ErinGilsbach


Erin D. Gilsbach

Attorney and Director of Professional Education and Policy Development

King, Spry, Herman, Freund & Faul (Bethlehem, Pa.)