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Schools Turning To Sponsors to Add to Coffers

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Notes sent home from principals and student report cards may soon carry a new postscript: And now a word from our sponsors.

School officials in Florida, Illinois, Nebraska, and Utah have taken steps to welcome corporate sponsors and beef up their merchandising efforts in hopes of generating more cash for their schools. Promoters of the concept said last week that school boards' associations and school administrators' groups in nearly two dozen other states may soon follow suit.

The arrangements being set up through a California promotions and licensing company include products bearing school logos, wide-ranging corporate sponsorships, catalog marketing, and school-backed credit cards.

"What we hope to get out of this is a greater access to discretionary funding," said Darrell K. White, the associate executive director of the Utah School Boards Association. "We've watched with some envy what has happened with colleges and professional sports where they have picked up millions of dollars."

Under their agreements with School Properties Inc., a San Francisco company, the state associations are forming cooperatives that will function as independent foundations. By proxy, local school boards will grant the foundations the authority to market schools both as a group and individually.

In the process, School Properties, a company that has worked with state high school athletic associations to win corporate support for tournaments, is aiming to remake itself as the top professional fund-raiser for the nation's schools. (See Education Week, Feb. 7, 1990.)

"Corporate sponsors want to be good citizens and have positive name recognition with parents and, possibly, their future customers," said Wes Apker, the executive vice president of School Properties and a former executive director of the Association of California School Administrators. "And schools have incredible funding needs."

Those needs have increasingly impelled schools to look for creative ways to bring in extra money. And corporate sponsors have been eager to help them out--often in exchange for advertising or other exposure in classrooms and school activities. Such links have been sharply criticized as advancing the "commercialization" of public education.

Counting the Dollars

Officials in Florida would like to make $1 million annually from their School Properties contract, according to Wayne Blanton, the executive director of the Florida School Boards Association. Such an estimate is not unrealistic. The company has projected that within three years, states should reasonably expect to be making $1 per student--a rate that would deliver $2 million to Florida.

"With 14 million residents and 50 million visitors, the potential for returning some dollars back to the local schools is large," said Mr. Blanton. He added, however, that a $1 million windfall hardly seems significant in a state that spends $12 billion on public schools.

In Utah, corporate sponsorship previously was limited to a bank's backing of high school athletic tournaments, bringing in $150,000 annually. The money paid for a catastrophic-insurance policy for all of the state's schools. Under the new arrangement, Mr. White said, organizers of the licensing cooperative would like to see that number jump to $250,000 and eventually to $500,000.

Illinois organizers are beginning to alert local school officials about how the arrangement will work while familiarizing themselves with the marketing business. "This is a whole new area for us," one association executive said.

The proceeds, which will be handled by each state cooperative, "could be used to support all kinds of programs in local school districts," Mr. White said.

T-Shirts to Shoes

In states that have contracts with the company, School Properties will monitor the use of school logos, collecting royalties from T-shirt, coffee-mug, and other manufacturers who often use school names and emblems now without paying compensation. Further, it will market the logos to companies for even more items sold through catalogs.

The catalog operations will tap clothing manufacturers, record stores, sporting-goods companies, and others to feature their products in a special catalog. The companies would agree to offer slight rebates to state cooperatives when catalog merchandise is purchased.

School Properties will also arrange with corporations to sponsor academic, athletic, and extracurricular school events--usually at the state level--as well as offer companies the right to buy the endorsement of the cooperatives. Corporations could pay for the right to use the cooperatives' logos on their products, from soda cans to video games to shoe boxes.

In addition to the endorsement, the companies would be featured in association magazines and local school publications. In return, schools would receive a portion of the endorsement fee as well as a slight amount from each item sold.

Finally, School Properties will also issue credit cards with its own logo, with a small portion of the charges being funneled to the state cooperatives. Such "affinity" cards were first used for school fund-raising some years ago. (See Education Week, May 20, 1987.)

In the Footsteps of Colleges

Colleges earned an estimated $2.1 billion last year in licensing revenues, according to industry sources. The market has grown quickly over the past decade, according to Jack Waters, the director of licensing for the National Collegiate Athletic Association.

The Collegiate Licensing Company in Atlanta, for example, has contracts with 140 colleges and universities. Its staff enforces and monitors licensing arrangements, works with retailers, and enlists sponsors for promotions involving college-marked merchandise.

Licensing officials said that while they have not turned their attention to the K-12 market, it would likely generate revenues--though probably not on the same scale as college merchandising.

Selling the Schools

But new funding that comes from closer ties to retail products may not be worth the price, argued Robin Templeton, the campaign coordinator for Unplug, a youth organization that has fought against Channel One, the advertiser-supported television-news program provided free to schools by Whittle Communications.

The ventures of the licensing cooperatives being set up by School Properties "are a clear example of the doors being opened very wide to companies that have profit in mind rather than the needs of schools," Ms. Templeton said.

"What's for sale here are the state's schools," she said. "We very clearly understand the position schools are in with their backs against the wall, but once they get on this track, there is nowhere else to go but selling out every minute of the school day."

She and others worry that the funds distributed by the state cooperatives may serve only to widen the funding gap between wealthy and poor districts--a complaint many state officials said they plan to deal with as they decide how to route the royalty and promotional money.

Officials said they are also being careful to make sure schoolchildren do not become the peddlers of even more merchandise than many sell now to raise money for their schools.

Questions of Success

The biggest question may be how well the concept will work.

"There is some enthusiasm," Mr. White of Utah said. "And there are a lot of people saying, 'We'll see when the money starts coming in."'

Gary Lindsey, a restaurant owner in Vero Beach, Fla., who serves on the Indian River County school board, said many of his colleagues see the venture as promising.

He expects that the already popular Fighting Indians, Sharks, Hawks, Gators, and other local school logos will become more popular with more promotion.

Businesses, he said, are eager to be affiliated with helping the schools, and supportive residents are likely to prefer items that are visibly associated with the schools.

"I am quite comfortable with this," Mr. Lindsey said. "The only question now is how much money is it going to generate."

Such sentiments lead School Properties executives to see a wide-open market.

"What goes on in the name of fund-raising in American schools is an amazing list of activities, and we would like to become the one-stop source for fund-raising," said Mr. Apker. "This is a marvelous opportunity for the schools to win, our corporate clients to win, and for us to make some money."

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