School districts should adopt uniform crowdfunding policies, auditor says

Many Ohio teachers reach into their own pockets to buy an average of $600 in school supplies a year. To help alleviate those expenses, some have turned to collecting donations online through crowdfunding websites.

While that fundraising option has many benefits, such as engaging the community and allowing contributors to pay for school supplies at no cost to the district, there also are many risks. According to a report released Wednesday by state Auditor Dave Yost, more than half of Ohio school districts do not have specific policies on crowdfunding.

Dozens of online crowdfunding sites exist, some specific to teachers and classroom needs. One site — DonorsChoose — has raised $621 million for 600,000 classroom projects. There are currently more than 900 initiatives for Ohio classrooms on that site alone.

“The citizens can take it upon themselves to crowdfund for a specific cause the institution may not have the money for and get the resources,” Yost said. “But like a lot of things, the benefit of the thing is also the danger of the thing.”

In the report, Yost recommended that school boards create policy regulating crowdfunding by teachers and others in the district to avoid potential legal issues.

The Family Educational Rights and Privacy Act (FERPA) and Individuals with Disabilities Education Act (IDEA) bar disclosure of personal information about students younger than 18 without parental consent. If those regulations are not followed, districts risk the loss of federal funding. Some districts allow the use of student photos in crowdfunding efforts, and more than half said their policies don’t address the issue.

Yost also warns about financial liability. Some donation sites will send specific products to the school with the money raised or give the funds directly to the district. Others give the lump sum to teachers, which raises many legal questions and potential violations of the Ohio Revised Code, because the district treasurer is required to be in charge of all school funds. If money being requested by a public entity isn’t accounted for, the treasurer would be held legally accountable.

The auditor recommends that school administrators review and approve all crowdfunding policies, designate which sites can be used, require the money be used for its stated purpose and mandate that donations will not be accepted without school board approval.

Originally published by The Columbus Dispatch on July 11, 2018.

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