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Schools dabble in dot.com fund raising
Saturday, September 16, 2000 By Eleanor Chute, Post-Gazette Education Writer
After raising about $60 last year through online fund raising, Central Catholic High School isn't quite ready to replace its profitable magazine sales with any high-tech alternatives.
But the school this year is giving online fund raising another try with another company in hopes of doing better than last year.
Parents of schoolchildren probably are spending part of this weekend dealing with magazine, wrapping paper and candy sales. They'll debate ad infinitum whether students -- especially in public schools -- should even be involved in such ventures. But what they'll agree on is that these annual fall fund-raisers are a royal pain. Door-to-door fund raising can be dangerous, time-consuming, energy-inefficient.
And the dot.com industry knows it. In less than two years, more than a dozen online fund-raising services have cropped up, offering schools what they say is an easy way to earn cash. The concept is simple: They give rebates on purchases made on the Internet.
The companies are competing for a share of the nation's 116,900 public and private elementary and secondary schools and for a piece of the multibillion-dollar online shopping market.
Tim Sullivan, publisher of PTOtoday, a publication for parent-teacher organizations, is waiting to see if the online fund-raisers result in significant amounts of money.
"I think this Christmas season is going to be a key one for a lot of the companies that are doing it," he said.
Schoolpop.com of Menlo Park, Calif., says its participating schools earned a total of $950,000 for a six-month period from October 1999 to March 2000. In Pennsylvania in that period, 398 schools participated, earning $26,150.
Schoolpop.com counts 106 schools in Allegheny County among its 22,000 participants.
Schoolpop.com figures it has 16,000 participating schools. SchoolCash.com lists nearly 8,500 schools, PTAs and other organizations, such as band boosters.
However, Schoolpop.com officials say some schools have earned as much as $5,000 in three months.
At SchoolCash.com, headquartered in Boston, program coordinator Jackie McCall said the typical school earns $400 to $600 a quarter.
It takes a lot of shopping to build up the cash. With a 5 percent commission, for example, school supporters would have to make $100,000 in purchases for their school to receive $5,000.
Here's how online fund-raisers usually work:
The services set up online "shopping malls" with 100 or 200 or more online stores, many of them well-known names such as Amazon, J.C. Penney, Avon, Eddie Bauer and Office Max.
Visitors to the Internet malls can register that they want their sales rebates to be credited to a particular listed school, parent-teacher group or other organization. They must access a store through the fund-raising site; otherwise, the school won't get credit.
Depending on the store, a percentage of the sale is credited to the group, generally about 5 percent or less. This percentage represents part of the commission that stores pay to the online fund-raiser; the rest goes to the online fund-raising company.
While many of the sites use some of the same stores, the percentages vary from site to site. Some keep a higher portion of the commission; some negotiate better deals; and specials on the sites vary. The sites usually list the percentage the school receives for each store.
Some services automatically issue quarterly checks to schools while others require additional steps, such as e-mailing receipts.
At Central Catholic, Brother Charles Mrozinski, director of development, said his school last year used Schoolpop.com but didn't push it heavily. This year, Central Catholic is trying Shopforschool.com -- another one of the larger players -- because it has a local representative to help promote the program.
The representative, who is a Central Catholic graduate, promoted the program at parents' night last week, and plans to attend some other school events.
"We don't know if this program works. We're willing to give it a try," Mrozinski said.
Sullivan, of PTOtoday, said even though some returns have been low, "There isn't much risk involved in trying them out. The risk is even less if you use one of the more substantial companies. Do your homework first and give it a good shot."
June Million, spokeswoman for the National Association of Elementary School Administrators, said that only 8 percent of elementary principals answering a spring survey said their schools received funds from Internet retailers, the smallest percentage on the list.
That compares with 88 percent who used book fairs and 74 percent who collected box tops and food labels.
Each online fund-raiser argues it fills a special niche in the marketplace, whether it's because of customer service, number of stores, special deals or other services.
SchoolCash.com, a for-profit business that lists about 280 merchants, has ties to the National Parent-Teacher Association. The national PTA already had a relationship with FamilyEducation Networks, which purchased SchoolCash.com. For several years, FamilyEducation had offered free e-mail and free Web site development to all PTAs. Now it promotes SchoolCash.com to its members.
Barbara Carney, national PTA director of development, said one reason the PTA likes the program is that it doesn't involve children doing door-to-door selling, something that is against PTA policy.
"It also was a way of allowing local PTAs to raise funds by purchasing items they actually use as opposed to items they have typically and traditionally used for fund-raisers, such as wrapping paper, popcorn, nuts and candy," she said.
"I think as more people become comfortable with online shopping, they will see there's every reason to make your PTA the beneficiary of your online shopping, especially when it costs you nothing to do so."
One of the smaller outfits, operated by a husband-and-wife team in San Diego, is for-schools.com; it has about 200 schools and about 200 school organizations.
Each participating group gets its own Web page, which is used to access about 80 stores and record rebates. Joel Davis said 75 percent of the commissions received by his Web site goes back to schools.
He said most of his clients earn $20 to $70 a quarter, with the best about $300 a quarter.
"I think it's real important people really have reasonable expectations," he said.
Even with the small returns, he said it was worth the effort. "It's nice when we get a letter that says, 'Our orchestra was able to bring in a day of tutors. It wasn't a lot of money, but it was an activity we couldn't do [otherwise].'"
Kathi Kaplan, vice president of marketing for Schoolpop.com, said its quarterly checks range from $25 to $6,000. She said the most successful schools had someone who drives the program and repeatedly gets the word out to the school and community. Schools in which many families have Internet access at home also do better. She likens it to the increasing popularity of recycling.
"When recycling first came out, it was kind of a pain in the neck. Now you feel bad if you don't recycle," she said. "If you already shop online, why wouldn't you register a school and shop through school.pop? It's the same kind of emotional plea. Your shopping can benefit somebody's school."
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