Administrator Magazine: Budget/Finance
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Creative fundraising ways for cash-trapped schools.

Budget Sinking? Create a Foundation.

There's money out there. Here's how to get your hands on it.

As budget cuts strain schools across the country, more districts are looking for ways to bring in the big bucks on their own. PTAs, PTOs, and booster clubs may make cash from car washes and catalog sales, but as an administrator, it's time to think on a grander scale. Wouldn't it be nice to have a million dollars for a technology initiative? How about half a mil for an arts program? This doesn't have to be wishful thinking. With drive, commitment, and hard work, you can set your fundraising goals for your district, and attain them.

Is Fundraising Worth It?
As bad as your budget cuts may be, the good news is that there is money out there, and donors are interested in supporting education. To prove it, look to the history of fundraising in public colleges and universities, says Stan Levenson, author of the book Big Time Fundraising for Today's Schools. For years, colleges and universities have faced budget shortfalls, and yet they have survived and thrived on fundraising efforts. "Universities know how to seek out individual giving, corporate and foundation grants, and government grants," says Levenson. "They raise billions of dollars each year. Public schools have to do the same."

Rather than invest in nickel-and-dime tactics to raise money, districts need to aim higher for their funding sources. Look to individual donors, who represent 84 percent of the money given away in the U.S., says Jim Collogan, executive director of the National School Foundation Association (NSFA). Although the economic crisis has put a strain on many, major donors seem to be stepping up. "Principle donors who have bought into an organization and understand its value will continue to support it, even—or especially—in tough times because they know they are needed," says Collogan.

For schools, this means not only going after wealthy individuals in the community, but wealthy alumni in particular. Fundraising consultants insist that administrators in even the poorest school districts, who perhaps can't tap current parents or community members for donations, do have access to moneyed alumni. Collogan recalls speaking to a room full of public school administrators recently in inner-city Detroit about fundraising. "I looked around the room and thought, ‘What can I do to help them?'" he says. "So I asked them if their schools had any prestigious alumni, and every single one of them did—athletes, artists, musicians. Detroit 30 and 40 years ago had all these phenomenal people that today's school administrators can and must reach out to," Collogan insists. "If your Main Street isn't booming now, look to your Main Street a few decades ago. That's where the wealth is."

Build a Bedrock for Giving
If all this money is out there, how do you get your hands on it? Start a foundation, says Levenson. "Foundations handle the administration of the major gifts, the distribution of funds, the overall coordination of the fundraising effort, and the in-service training to help staff, volunteers, and others learn how to raise big-time dollars," he says.
As entities separate from the district, foundations can focus solely on strategizing, long-term goals, and sophisticated efforts to bring in the most money possible for the district. Independent and volunteer-based foundations should be established as 501c3 nonprofits that allow people to receive tax write-offs for their contributions.

As a superintendent, you can get one started in your district. Use your enthusiasm and vision for the foundation to gather those with equal drive, passion for education, and business acumen to help you get it going. A superintendent must also ensure that the foundation's goals are tied to the district's strategic plan. This way, the foundation raises money for the district in the way that it needs; the goals of the foundation reflect the goals of the district.

After that, your role as superintendent in a foundation may depend on your state's regulations. If your state is highly regulated, continue to support, but step out of the way and let the foundation's board of directors do its job, says Collogan.

Jodi Bender Sweeney, a leader in the school foundation movement and cofounder of Foundation Excellence, adds that although most superintendents will sit on the foundation's board ex officio, there is no one better than a superintendent to go on a call to a donor.

The Benefits of a Foundation
Foundations not only raise money, they act as a public relations vehicle for the district, says Jane Gallucci, Sweeney's partner at Foundation Excellence and former president of the National School Boards Association. Foundations work to create ties with the business community and bring it into your schools. "The business community comes in, sees what's going on, sees what the needs are, and then goes back out and becomes a cheerleader for you in the rest of the community," she says.

"It's a wonderful legacy for a superintendent to leave with a district," Gallucci continues. "It gives me goose bumps to think about what all these dollars can do for a district, what kind of gift it is for students."

Nuts and Bolts
Now that you're jazzed about creating a foundation, remember it's more than simply organizing a golf outing and then counting the incoming cash. To build a successful foundation, you must follow certain steps. "Leadership is key to getting started," says Gallucci. "You must have an education champion in your district who will help bring together community members who are equally passionate about the project."

The next stages involve hammering out the foundation's strategic plan: the purpose of the foundation, what the initial funding goals are, and how it will be represented in your community. There is also legal work to manage, including filing with the IRS and developing articles of incorporation and by-laws, and a board of directors to seat. No district has to approach this process without help, however. Consultants, such as Gallucci and Sweeney at Foundation Excellence, help districts through this process. The NSFA also offers feasibility studies to districts interested in beginning the process. These studies help districts know what they need to start a foundation.

What's the Money Good for?
"The goal of a foundation is to provide funding for enhancements for a district," says Sweeney. But this year, some districts are facing such extreme budget cuts that their communities are tempted to raise money to save teaching positions or to provide for other core necessities in the classroom. Whether through a foundation or another organization, fundraising experts warn against using "soft money" for teachers' salaries in particular.

"Soft money is money that is not guaranteed year in and year out," says Levenson. "This kind of money should be used for hardware that lasts several years and supplementary materials and equipment." Hard money, on the other hand, is money that the district can rely on year after year. Levenson suggests establishing an endowment to cover the salary of special interest teachers in music, art, or P.E. The interest paid on endowments becomes hard money and can be counted on year after year. Colleges have relied on endowments for certain positions for years.

But, adds Collogan, for seriously cash-strapped districts that are simply trying to bring in whatever money they can, "if they get the money one year to pay for a full-time teacher, then they get it. If they don't, they don't. They make do the best they can."

Private Money for Public Schools
For the past hundred years, public schools have relied on government agencies and local property taxes to fund expenses, but these sources are struggling to keep up with a school district's growing financial demands as it prepares students for a global economy. Private money is needed, and it is out there. Rather than put an additional burden on school administration and the community at large with endless car washes, says Levenson, establish a properly organized fundraising program that can bring in corporate, foundation, and government grants, as well as gifts from individuals.

Collogan adds that although he fully believes a school's necessities must continue to be funded by public funds, "the donors are donating, and if they're donating, why not take their money?"

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