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Ohio Auditor of State Releases Best Practices Guide for School Crowdfunding

With the increased popularity of crowdfunding sites such as GoFundMe, crowdrise, and DonorsChoose to raise money for school purchases, schools are faced with new legal challenges and issues. To combat these issues, the Auditor of the State of Ohio (“Auditor”) released a guide entitled, “Schools and Crowdfunding” to help schools avoid liability and audit violations when using such crowdfunding sites.

In the “Schools and Crowdfunding” guide, the Auditor suggests several “best practices” when forming policies regarding crowdfunding sites. These best practices include the following:

  • Require that all crowd-funding campaigns be reviewed and approved by a designated school administrator.
  • Direct the designated administrator to ensure that the proposed crowdfunding campaign does not violate any federal or state law including, but not limited to, those governing the confidentiality of student information, and that the campaign seeks donations that comport with the school board’s education philosophy, needs, and technical infrastructure.
  • Designate which crowdfunding services can be used by teachers. These should be services that send donations directly to the school board, not to the teacher, to ensure that the donations are not diverted or misused. The school board should also determine if participation with a given crowdfunding site obligates the school board to assume any responsibility to file government-required reports of charitable activities.
  • Require that donations be used for the stated purpose.
  • Mandate that no donations will be accepted without school board approval.
  • Establish that all crowdfunding donations are the property of the school board, to be entered promptly into the school board property inventory or deposited in school board bank accounts so that they are subject to normal financial oversight and auditing.

To read the “Schools and Crowdfunding” guide, click here.

Authors: Matthew John Markling and the McGown & Markling Team.

Note: This blog entry does not constitute – nor does it contain – legal advice. Legal jurisprudence is like the always changing Midwestern weather. As a result, this single blog entry cannot substitute for consultation with a McGown & Markling attorney. If legal advice is needed with respect to a specific factual situation, please feel free to contact a McGown & Markling attorney.

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