When I was a kid, fundraising meant selling wrapping paper we rarely used and chocolate we shouldn’t have been eating. But thanks to a handful of new startups, old-school bake sales and magazine drives are giving way to digital crowdfunding campaigns, mobile e-commerce efforts and money-making market research partnerships.
With the growth of crowdfunding platforms like Kickstarter and Indiegogo, services like Fundly, Razoo and Dibbee have made it easier for schools (and other nonprofits) to solicit donations from their communities online. But other startups are pitching schools with even more interesting fundraising models that take a page from the books of consumer e-commerce companies.
Boosterville, for example, a startup launching this week as many kids head back to school, provides parents and school supporters with a “mobile wallet” that allows them to give a percentage of the proceeds from their purchases (from participating local and national merchants) to their schools. Launched by Pam Cooper, an Indianapolis former PTO president, and her husband Tom, the former CTO of search engine ChaCha, the goal is to allow parents to buy the things they already need while supporting their schools and community.
E-commerce services court schools
“As things like Groupon (s GRPN) and other shopping [startups] started coming online, we started thinking of ways to apply that consumer technology and wrap it up in a different bundle for schools,” said Pam Cooper.
Through a mobile-optimized website (the company says mobile apps are on their way), parents can connect a bank account to a Boosterville account in support of their school. Then, at the point of purchase, they can pull out their phones to pay for items through the site. Two percent of the purchase price goes to the school, while one percent goes back to Boosterville. Even though businesses lose out on a portion of the sale, Boosterville claims that by being a part of the Boosterville network they could attract more business from those who want to shop responsibly and support their schools.
A San Francisco startup called Schoola also blends fundraising and local commerce with a Groupon-like approach that offers parents limited-run deals from local businesses. Through its site, which has attracted 12,000 schools since launching last fall, businesses can offer cheaper goods to parents and then donate about a third of the proceeds to the school. Instead of employing an army of salespeople, it relies on parents to recruit businesses who want a new, philanthropic way to reach customers. A more recent service from the company, Schoola Stitch, gives parents a way to sell used children’s clothing online to make money for their schools.
“This helps them raise funds in a responsible way that doesn’t require [parents] to simply write a check,” said Schoola founder and CEO Stacey Boyd, a former teacher and principal.
Trading shopping data for school support
Yet another company launched in the Bay Area last year, Shoparoo, turns parents’ shopping excursions into cash for schools in a different way. Through the startup’s mobile apps, parents can take pictures of their grocery store receipts to earn points that the company converts into money for that person’s school. Brands, like Dove and Breyer’s, pay for the (anonymized) shopping data, which in aggregate can provide insights into consumer behavior and preferences, according to Shoparoo. In a given year, it estimates that a parent could raise $10 to $15 for her child’s school.
Given widespread budget cuts — 80 percent of U.S. schools have experienced some kind of cut since 2008, Schoola’s Boyd said — schools are in an especially vulnerable financial position. Still, even as schools increasingly need more money, the general economic pressures faced by families, and growing disenchantment with traditional fundraising efforts, are making it tougher for schools to raise money through the tried-and-true candy drives and catalogue-type sales.
According to the Association of Fund-Raising Distributors & Suppliers, which includes the third-party vendors that enable traditional school fundraisers, schools raised about $1.4 billion in 2012. And that’s down from about $1.7 billion in 2005. For new startups, digital fundraising services not only give schools a better way to raise money, they provide a way to tap into what Boosterville estimates to be a $5 billion market (when you consider the total sales, not just the schools’ take).
Getting new apps and services to be a part of parents’ daily routines could be tricky — especially when there are so many other shopping apps competing for their time. And ongoing fundraising efforts, rather than shorter drives, could make it more difficult for schools to keep up the momentum to reach short-term goals. But given growing interest in buy-local movements and shopping responsibly — not to mention more parents for whom using digital tools is second nature — these efforts are likely just the beginning of a new era of fundraising for schools.