Entrepreneurs are turning to crowdfunding to help ease the pinch in school budgets.
Online platforms are already used to boost fledgling culinary or music careers, to help pay for medical expenses or support new ideas for TV shows. So it’s not a surprise that entrepreneurs have turned to crowdfunding to innovate in the education sector.
The latest entrant into this market is the Houston-based startup, PledgeCents, which came out of beta last month. “We have friends that came out of college and went straight into Teach for America,” says Ricky Johnson, who co-founded the startup with his grade-school friend Andyshea Saberioon. “We’ve seen through their experiences the struggles and large needs teachers have.”
PledgeCents currently has only a handful of active projects, such as a request for a $600 projector so that teachers can provide more visual instruction for special-needs 7th-graders. A project to grow a community demonstration garden at an elementary school attracted nearly 30 donors—including Johnson and Saberioon—to raise $2,600.
If the fundraising is successful, PledgeCents takes a 5 percent cut. Following the Indiegogo model, it’s not an all-or-nothing deal—but if a project is unable to meet its original fundraising goal, PledgeCents takes a larger 8 percent stake. (The difference in fees is intended to encourage fundraisers to set a realistic goal.)
|Crowdfunding Sites for Education|
So far, Johnson and Saberioon have bootstrapped the startup, investing about $75,000. They plan to seek outside funding next spring following the next iteration of their website.
In the meantime, the founders are traveling to education conferences trying to get the word out to educators. At each stop, they bring along their PledgeCents bracelets, available in a variety of colors and each featuring a penny at the center. They sell for $1.99 or $2.99 each and, founders say, are a fun way for donors to show solidarity with the teachers and students they are supporting.
Using the power of crowdfunding to round up grassroots support for teachers and students in cash-strapped times certainly seems better than answering your door to find school kids selling overpriced wrapping paper, greeting cards, or chocolate bars. (Or dodging their parents who bring the brochures to work.)
The online platform is also a way to reach beyond a teacher’s or a school’s immediate community. Donors can choose to fund projects in their backyards or across the country, or search by topic, say, projects that involve girls and technology or inner-city classrooms.
But PledgeCents has entered a crowded market. Crowdfunding platforms in general raised $2.7 billion in 2012, up from $1.5 billion the year before, according to Crowdsourcing.org’s 2013 industry report. It forecasts an 81 percent increase in fundraising this year, to $5.1 billion.
CrowdFundEDU, which was founded in 2012, also allows recipients to receive contributions even if the fundraising goal isn’t met. CrowdFundEDU charges a 5 percent fee if the goal is reached and 9 percent if not. Another site, Funding4Learning, specifically helps students raise money for their studies.
Perhaps the oldest educational crowdfunding site is DonorsChoose, which was founded by a Bronx public school teacher in 2000 and has to date raised $190 million in a total of 374,007 projects across the country.
DonorsChoose operates like an Amazon.com for educational needs. Donors don’t simply make monetary pledges but chip in to pay for specific items such as a laptop or English-as-a-Second-Language textbook. “Someone who gives $100,000 will know, without a shadow of a doubt, exactly what will be purchased,” says Melanie Duppins, DonorsChoose’s senior director of policy and learning.
No matter the competition, Johnson says teachers’ needs are so great that PledgeCents will find a place in the education crowdfunding market. He and Saberioon, who are both in their mid-20s, were inspired to become social entrepreneurs because of their parents, who run their own businesses, and by their own experiences in school.
“When I was in grad school, I was coaching basketball at our high school,” he says. “And we needed money just to buy basketball jerseys, or getting the team somewhere for tournaments.”
As sequestration becomes the modus operandi for Washington, many schools are seeking new sources to supplement dwindling budgets. Crowdsourcing startups like PledgeCents could help, one penny at a time.
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