Schools Hope To Cash In On Online Sales

Schools may get a sense this holiday season of whether a new fund-raising approach will roll in big bucks or a mere pittance.

Thousands of schools signed up this year with Internet companies that allow people who shop online to direct a small rebate to the school of their choice.

A parent, for example, can buy a sweater from Lands’ End Inc., a book from Amazon.com, or a computer from Dell Computer Corp. through one of the fund-raising companies. The retailer then sends a rebate to the company, which keeps some of the money and passes along the rest to the school the parent’s child attends.

“It doesn’t cost the school anything. It doesn’t cost the parent anything. The merchants love it because they’re giving back to education,” said Rea Callender, a former teacher and the chief executive officer of Schoolpop Inc. in Menlo Park, Calif., one of the largest online fund-raising companies.

Officials at participating schools say they welcome a chance to raise money simply by encouraging school supporters to do what they would do anyway—buy stuff.

“It’s a no-brainer. We don’t have to do anything,” said Belkis Santos, the director of the school partners’ program for the 430,000-student Chicago school system, which last month joined Schoolpop. “We’re just saying, if you’re a teacher, or parent, or student and are shopping, use Schoolpop.”

Some critics warn, though, that any public schools that get involved with the strategy are standing on ethical quicksand.

Alex Molnar, an education professor at the University of Wisconsin-Milwaukee and director of the Center for the Analysis of Commercialism in Education, said the fund-raising companies and retailers are the main beneficiaries; they’re using taxpayer-funded institutions for free advertising of their goods and services, he said.

“Schools should be concerned about spending one second of time promoting the goods and services of a special interest,” Mr. Molnar said. “Schools should be indifferent to where people shop. It’s not appropriate to put pressure on people to shop at a certain place.”

Expanding E-Commerce

Despite such arguments, schools have been rushing to take advantage of the rebates this past summer and fall.

Florida Commissioner of Education Tom Gallagher announced last month—just in time for the Christmas shopping season—the creation of a statewide “virtual mall” that is intended to benefit all of Florida’s county educational foundations, which raise money for the state’s countywide districts. The Florida Education Foundation, an organization that supports statewide programs, contracted with IMBC Inc., a Tampa-based technology-consulting firm, to create the mall. The firm plans to take the model on the road soon, marketing it to state education departments elsewhere.

Schoolpop has had 11,000 schools join its program since it started operating a site in March. It’s been endorsed by three Texas education groups, including the Texas Association of School Administrators. In addition, the foundations of the National School Boards Association, the National Association of Secondary School Principals, and the National Association of State Boards of Education are all accepting rebates from purchases made on Schoolpop by customers who don’t designate a particular school as a beneficiary.

YourSchoolShop.com in Seattle is credited with being the first online shopping site for school fund raising. Created in August 1998, the site has increased its number of participating schools from 30 to 600 since then.

Other malls for schools that came online over the past year include shopforschool.com in Edina, Minn., which has 1,400 schools signed up, and for-schools.com, which has 100 schools or school organizations participating. A+ America Ltd., a company in Littleton, Mass., that has administered rebates to schools off line for six years, launched an online mall—Technology4Kids.com—in May that translates rebates into new technology for schools. Unlike the other sites, it doesn’t give out cash.

Since the strategy wasn’t widely available last year, school leaders are looking to this year’s holiday season as a measure of what kind of expectations they should have for it.

“Everything I’m reading and seeing on television news seems to point to this year being the breakthrough year for e-commerce and online shopping,” said Michael Lawrence, a teacher of Web-page design and English at Costa Mesa (Calif.) High School, which has an arrangement with YourSchoolShop.com. “I’m thinking this will transfer over to our fund-raiser.”

“We’re hoping with the holiday season, people are going to be buying,” agreed Tim Molak, the headmaster of Woodside Priory School, a Roman Catholic school with 250 students in Portola Valley, Calif., that signed up with Schoolpop.

Americans are expected to make $4 billion worth of purchases online between Thanksgiving and Christmas this year, up from the $1.7 billion in last year’s pre-Christmas shopping spree, according to Forrester Research Inc., a media- and technology-research firm in Cambridge, Mass.

The fund-raising companies are preparing by stepping up recruitment of their partner retailers and flooding schools with promotions. Schoolpop mailed out 4.5 million holiday flyers to schools to urge their supporters to shop through its site. Shopforschools.com put 1.5 million holiday catalogs in the hands of its participating schools.

Rebates Reduced

Some school officials who have participated in the programs for a while have been disappointed in the returns, however.

YourSchoolShop.com reports its top-earning school made $1,200 in one quarter. The other companies say their top schools have made $500 at most since their sites were launched. Far more typical is just $25 in a quarter.

“The reality is, it doesn’t make as much money as you think. You have to spend a ton of money to make a lot,” said Duree Mandell, a volunteer fund-raiser for the parents’ association at St. Joseph’s School, a Catholic school with 522 pre-K to 8th grade students in Atherton, Calif.

St. Joseph’s, which signed up with Schoolpop last May, received a check for $121 for $6,000 in purchases made from July through the end of September—or an average rebate of a little more than 2 percent.

Ms. Mandell was unhappy that some of the rebates initially advertised by Schoolpop were reduced by retailers by the time St. Joseph’s supporters made their purchases. The rebate for eToys, for example, which she had estimated would be a popular store among parents, was listed by Schoolpop as 20 percent last spring, but her school received only 4.7 percent on eToys purchases in its recent check.

“I’m finding it disappointing. I think they need to lock these vendors in,” she said.

Schoolpop, so far, has not asked retailers to lock in their rebates for any set amount of time. By contrast, Gary Blackford, the CEO of ShopforSchool, said his company asked retailers to commit to their rebates for a year after signing an agreement to sell through shopforschool.com. But only 30 percent of them have done so. He said ShopforSchool drops companies from its World Wide Web site that cut their rebates significantly.

“I think there is going to be some disappointment as we go on,” Mr. Blackford acknowledged. “Merchants come out with a certain percentage and then whittle it down once they get the customers.”

Ms. Mandell said that makes it difficult for schools to know how much they’ll receive from the arrangements.

“I can’t say, ‘If you buy Julia Child’s recipe book from Amazon.com, we will get a specific percentage,’ ” she said. “All I can say is, ‘Go to Schoolpop when you shop online, and we will get something.’ ”

Questions of Equity

Another concern among some school leaders is that if the online-shopping fund-raising concept does catch on, it will exacerbate financial inequities between schools.

Florida has addressed that issue by ensuring that money generated from online shopping will be distributed equally among its county educational foundations based on the student populations of the districts they serve, said Terry Boehm, the president of Hillsborough County’s foundation and the spokesman for the Florida “mall.”

In Chicago, rebates from shoppers who designate the district as a beneficiary rather than a particular school will go to the district’s foundation, which, in turn will direct the money to the poorest schools.

One potential problem—that the fund-raising companies might partner with retailers that are inappropriate for education—has not yet materialized, administrators say.

“We’ve checked out the companies they deal with,” Ms. Santos, the Chicago schools official, said of Schoolpop. “They’re all reputable companies.”

Mr. Blackford of ShopforSchool noted that his company intentionally did not include the lingerie retailer Victoria’s Secret, as well as Abercrombie & Fitch Co., a youth-oriented apparel company that includes partial nudity on its Web site, in an effort to keep its Web site “G-rated.”

The Florida Education Foundation has retained in its contract with IBMC the right to have the final word on the content of the virtual mall, including the identity of the merchants.

“We have the right to pull any company off the site that’s not appropriate,” Mr. Boehm said.