Education Executive's Update

Legal Issues To Consider Before Your Next Fundraiser

In the current era of school budget constriction, co-curricular activities are seeing financial resources allocated from the district dissipate. A time-honored event to assist co-curricular groups in acquiring the funds to carry out its mission is a fundraiser. Fundraisers often conjure the vision of students conducting bake sales at the local grocery store, spaghetti dinners before a basketball game, car washes at the local gas station and many others.

For most individuals, fundraisers seem like innocuous activities that help these groups raise needed financial resources to support their mission — new uniforms, equipment, field trips, etc. Yet, the potential for legal violations is tremendous, and in actuality, school administrators need to have knowledge of the law couching these activities and the foresight to predict conflict and plan accordingly. While most actions by public educators completed within the scope of their job indemnifies them from personal liability, the time spent on these issues and financial resources expended to make whole individuals who have been harmed can be weighty, which causes these resources to be utilized in ways not best suited for student growth. Some of the more prominent fundraising methods are discussed here with a brief legal analysis provided.

NEGLIGENCE

Avoiding negligent behavior on the part of the school may be one the most arduous tasks needing the most forethought and guidance for staff members. Negligence is defined by the following characteristics: (a) the failure to exercise the standard of care that the doer, as a reasonable person, should have exercised in the circumstances, (b) undue indifference toward the consequences of one’s act, or (c) including the notions of duty, breach of that duty (unreasonable conduct), and resultant damage.

Educators are held to the standard of a reasonable and prudent parent. Teachers acting in loco parentis have a general duty to instruct, reasonably supervise and protect children from known or reasonably foreseeable dangers while the children are under the teacher’s care .1 Obligations of an educator include: (a) providing adequate supervision, (b) providing proper instructions, (c) providing properly maintained buildings, grounds, and equipment, and (d) providing warning regarding known or reasonably foreseeable hazards.2 An allegation of failure to provide adequate supervision for students is the most common negligence claim.

In order to minimize the potential for legal action due to negligence, there are several factors that should be taken into account as leaders seek to monitor fundraisers:

  • An obligation to provide warnings regarding know or reasonably foreseeable hazards;
  • Provide proper instructions to reduce the risk of injury;
  • Ensure that instructions are reviewed more than once;
  • Incorporate the age, capacity and past behavior of students when addressing foreseeability;
  • Establish procedures that are consistent with board policy and require all fundraising groups, clubs, or teams to comply.2

CONSTITUTIONAL VIOLATIONS

There are fundraising activities, conducted by public schools, which may encroach on constitutional protections. Public schools conduct fundraisers, which encourage the consumer to place personal messages on tangible items, such as a brick, tile, wood panel or paper.4 Displaying messages on these types of items in a public school increases the tension between protecting a person’s right of expression under the Free Exercise Clause and the public school’s obligation to prohibit religious expression violating the Establishment Clause found in the First Amendment. Discerning whether speech violates the Free Exercise Clause or remains within the influence of the Establishment Clause can be confounding for school administrators. Jurisprudence offers little relief:

Unfortunately, because Supreme Court decisions concerning the appropriate balance between the free speech and the establishment clause are fact-specific and the court has yet to address a case involving personal messages displayed on school premises, legal principles must be extrapolated and applied from case law that is available.4

Therefore, it is prudent for public school administrators to be cognizant that fundraising activities, which invite the community to place messages on public school property, may not be guided by precise canons mitigating liability. First Amendment speech rights could be chilled if private individuals are prohibited from including these messages. Several factors, such as the forum for the speech, maintaining viewpoint neutrality, and what the actual message declares must be recognized by school administrators to avoid conflict.

The following list provides suggestions for mitigating the potential for constitutional violations when dealing with free speech and fundraisers:

  • Eliminate all personal messages. Limit message content to a name and date;
  • Prohibit all religious messages along with profane and offensive ones;
  • Prohibit disruptive messages. Permit religious messages but then prohibit or restrict them if they disrupt the educational function of the school.4

TITLE IX – DISPARATE BENEFITS

Title IX of the Education Amendments of 1972 ensures that gender equity is mandated for all public schools that receive federal funding. Public schools are prohibited from discriminating, excluding or denying benefits because of gender differences. To help remediate these deficiencies booster clubs, alumni, and in some cases, corporate sponsors, that may or may not be sanctioned by the school, contribute money to athletic program budgets. Fundraising activities conducted by school groups and non-school organizations, like booster clubs create a situation whereby different levels of fundraising success (or lack of success) justify a disparate claim.

Title IX does not require boys and girls budgets to match dollar-for-dollar; however, the bottom line is that the benefits provided must be equal. An institution is not absolved of this responsibility when disparate benefits are created by successful or unsuccessful fundraisers. Educational institutions cannot use an economic justification for discrimination. In those instances where fundraisers may lead to disparate benefits, administrators should identify benefits of equivalent importance that may be provided to offset disparities.

School administrators should consider implementing some of the following points in order to avoid violating the spirit of Title IX legislation:

  • Establish one large booster club for all activities;
  • The principal, or his or her designee, should attend booster club meetings;
  • The principal, or his or her designee, trained in Title IX compliance, should monitor fundraising activities.

RAFFLES

Frequently, groups associated with school activities use some version of a raffle to raise funds. Using the concept of a 50/50 raffle may appear to be a fairly effortless method of raising revenue fairly quickly: tickets are sold, money is collected and a winner is drawn. However, 46 states and the District of Columbia have enacted legislation controlling raffles. Organizations sponsoring raffles may be required to file an application with the state. Some state raffle laws limit the number of raffles that a tax-exempt organizations can hold, while other states have laws about the value of prizes given away, the format of the tickets and other aspects of the raffle. Needless to say, it behooves any administrator that oversees raffle activities in his or her building to be very cognizant that state and/or local law probably governs this type of activity, and assuming it does not could be detrimental.

FOOD FUNDRAISERS

A typical activity used in a fundraiser is to sell food. Whether prepackaged food like candy bars, or prepared food such as spaghetti dinners, two factors need to be explored to ensure compliance with various guidelines. First, in the past several years, the federal government has mandated new rules for competitive foods and beverages known as “Smart Snacks.” The 2010 federal law established rules that took effect in July 2014 to cover bake sales and other food fundraisers held during the school day, as well as snacks sold in school vending machines, school stores and onsite cafes.3 The federal regulations provide states an exemption from the law if they so choose. Twenty-five states have, in fact, enacted exemptions to the Smart Snacks standards.

Secondly, groups who wish to prepare food on campus for fundraising activities have the potential of incurring state health code regulations that provide direction or prohibition for the use of school facilities to prepare food. Some states, through health code laws, restrict the use of a food establishment in or at a school to licensed personnel. States may require groups using these facilities to obtain a license to operate a food fundraiser in public schools, which may require trained personnel to be present while the activity is being conducted.

MOVIE NIGHTS

Groups organizing a movie night, whereby a movie is rented, downloaded or privately purchased, and the movie is shown at school for a fee, are fairly typical. Yet, using a video in this manner can raise copyright violations. Importantly, no educational value is inherent in this type of activity and is an infringement of copyright rights without the purchase of a license. For those not familiar with copyright law, it is possible that an infringement could occur without malicious intent. Sponsors, advisors and coaches might be inclined to approve such activities with the impetus being enhanced resources for students — an honorable goal. This assumption is erroneous, and if permitted to occur, the action could place the school in jeopardy of legal action. Purchasing a movie by a private individual does not constitute the purchase of a license. School administrators need to be aware of movie nights and ensure that appropriate measures have been taken to minimize copyright violations. When in doubt, always request permission.

Based upon this legal compendium of fundraising activities, it may seem as though supervising fundraising activities is a daunting task — it can be! Yet, these activities are invaluable and are extraordinary team-building activities. In order to minimize potential legal liability an administrator can:

  1. Develop policies that require all school sponsored fundraisers to be approved prior to implementation;
  2. Periodically hold meetings to train sponsors regarding legal pitfalls incurred by conducting fundraising activities;
  3. Continue to be vigilant regarding knowledge about fundraising activities. Do not ever assume that you know something. It is always worthwhile to seek legal counsel if you are unsure about the legality of certain activities.

REFERENCES

1 Dayton, J. (2012). Education law: Principles, policies, and practice. Bangor, ME: Wisdom Builders Press.

2 DeMitchell, T. A. (2007). Negligence: What principals need to know about avoiding liability. Lanham, MD: Rowman & Littlefield Education.

3 Healthy, Hunger-Free Kids Act, 42 U.S.C. § 1751 (2010).

4 Mawdsley, R. D. (2006). Solicitation of personal messages for display on public school premises: What are the first amendment considerations? West’s Education Law Reporter, 213, 909 – 934.

This article originally appeared in the May 2016 issue of School Planning & Management.

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