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Can my school district use online fundraising sites?

Online fundraising sites have become a popular way for schools to raise money for various objectives over the last decade. They have provided parents and well-wishers with an opportunity to chip in and improve school facilities, infrastructure, and more. Online fundraisers have made it easier than before for community members to give and pool resources.

Fundraising is a fantastic way to raise additional money to sponsor students in need and finance other important school projects like upgrading technology, playgrounds, lunchrooms, and extracurricular programs that benefit students. Millions of dollars have been raised through online fundraising sites and have greatly helped schools, teachers, and students.

Any fundraising campaign conducted through these online platforms must adhere to district policies and procedures. Online fundraising has its own set of challenges that school districts have had to deal with. As a result, school districts have devised policies and procedures to ensure seamless coordination between the creators of the fundraiser, schools, and district administrators to safeguard everyone involved.

If you are a school or system leader looking to know more about online fundraising and whether your school district can use online fundraising sites, you are in the right place. Below is everything you need to know about online crowdfunding.

Online Fundraising Has Multiple Benefits

Setting up an online fundraiser is pretty straightforward. Any teacher can initiate a campaign with a few mouse clicks and start receiving resources from donors around the world. As previously mentioned, funds raised through crowdfunding can go a long way towards helping the school with much-needed classroom supplies, sponsor educational field trips, pay for enrichment programs, and much more.

Some online crowdfunding platforms raise funds and then transfer them directly to the teacher/school. Others prefer sending the funds to a specific donor who delivers the products/goods to the school once they have been fully paid. This ensures the funds raised are used for the intended cause.

At its best, crowdfunding can and has raised huge amounts of money within a very short time. At times, community members are overwhelmed with the volume of fundraiser requests and simply want to make a one-time donation. Online fundraising makes it easy for them to make their contributions. It is a perfect way to get money into the hands of those who need it most, or the most important projects for a school. But while this sounds fantastic, the process is a bit more complicated for those involved, especially the school.

Online Fundraising: The Challenges Involved

Without proper regulation, crowdfunding can be problematic for schools. Depending on the ultimate goal for the fundraiser, schools can run into problems related to the Family Educational Rights and Privacy Act (FERPA) violations and potential charges under the Individuals with Disabilities Act (IDEA). For instance, if a teacher wants to fundraise for laptops for their non-verbal students and proceeds to include their pictures and other details on the page, it could potentially fall under FERPA violations. Parading students to fundraise for devices to aid their communication skills (or lack thereof) can be translated as a serious IDEA issue and a potential liability for the school.

There is also the issue of accountability. Crowdfunding deals with money and other valuable items, and measures must be put in place to ensure the money/valuables are used for their intended purpose. Public schools must adhere to recordkeeping compliance laws which means money raised through online fundraisers must be properly recorded and deposited.


Giving the funds directly to a teacher increases the possibility of the teacher not using all the money for its intended purpose, thereby creating a liability for the school. This is where our LeanStream platform comes in handy in terms of tracking, accounting, donor information, and reporting to ensure a positive outcome for the school/school district.

Additionally, crowdfunding proposals may inadvertently spoil a school’s or school system’s reputation. Imagine a proposal suggesting that the school district does not provide significant funding and support to aid the students’ learning needs. Many would doubt the school’s capacity to provide a quality learning experience. Therefore, you should consider the verbiage used to communicate and market your fundraiser’s goals.

How Your School District Can Use Online Fundraising Sites

The first and most obvious point is to have all the fundraising campaigns approved before starting. This ensures the fundraising proposals don’t end up spoiling the school district’s reputation and result in liabilities.

Funds raised through an online fundraising campaign should always go to a centralized location such as the central office or school bookkeeper rather than an individual teacher. Teachers receiving money from fundraising campaigns could run into ethical issues since public employees are barred from using their position for financial gains. Additionally, valuables bought using such funds must be the district’s property and inventoried as such. School districts should also adhere to the laid-out procedures for the distribution of money obtained from fundraising campaigns.

Another thing to consider is the money taken by the fundraising site. A good number of sites automatically take a percentage of the funds raised beyond simple credit card processing fees.   Others “sneak” in fees and make it a burden for donors to “turn off” or refuse to pay the fee. Some crowdfunding sites repeatedly hound donors to make a “tip” to support fundraising efforts. These “tipped” funds go to the fundraising company and not to the school. It is equally important to research the rules that the crowdfunding site has regarding fund disbursement. Some sites require school staff to set up a fundraising goal amount and withhold the funds if the goal is not attained. At LeanStream, outside of the credit card processing fee, all donated funds go straight from the person paying to the school district.

Unless it is absolutely necessary, school staff should limit the use of students’ names and/or photos of identified students to avoid violating FERPA regulations. School districts should also vet all the available sites and only approve those that guarantee outcomes deemed appropriate by the school district.

You also want to consider classroom-school equity. The last thing you want is to run into problems with parents/community members who donated for a particular classroom/school only for money to be diverted to another school or classroom. This is another reason why no money must be directed to an individual teacher.

Finally, is the technology offered by the site compatible with the school district’s current technology plan?


As a school district, it is important to stay up to date with emerging legal issues surrounding online fundraising and best practices because crowdfunding is not only extremely beneficial to schools, it is also going to continue rising in popularity.

For more information on the fundraising solutions offered by LeanStream, visit https://www.leanstreamrp.com/pages/solutions.