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Filling a void for cash-strapped districts

Nora Caley //January 1, 2013//

Filling a void for cash-strapped districts

Nora Caley //January 1, 2013//

Public schools are struggling with budget cuts, and corporations are looking for new ways to market their brands. Golden-based Education Funding Partners is working to bring the two together.

“Companies spend $150 billion a year on advertising,” says Mickey Freeman, president and CEO of the two-year-old EFP. “There has got to be a way to redirect some percentage of that in an ethical and moral way into public education.”

Advertising as a means of fundraising for schools is not a new concept. Local companies have long paid to display banners at sports venues and run small ads in the back pages of theater programs. Freeman says EFP’s efforts are on a much bigger, and more strategic, scale. “Don’t think about us as a signage company,” he says. “We give marketers the opportunity to invest district-wide.”

EFP is a B Corporation, or socially responsible enterprise, that serves as a matchmaker between Fortune 500 companies that want to buy sponsorships and school districts looking for supplemental funding. The advertising can include corporate logos on school websites or on the Friday folders that students bring home, as well as signage. The school district receives 80 percent of the revenue generated by the advertising deals, and EFP earns 20 percent.

Some school districts already have corporate sponsorship policies, with rules on everything from types of advertisers to stadium naming rights. Schools generally do not want ads that promote smoking, or that discriminate against any group. Some do not want ads in the classrooms, so the marketing materials appear in parking lots and cafeterias.

One of EFP’s first clients is SPARK, the education foundation for Prince William County Public Schools in Virginia. Sharon Henry, supervisor, community and business engagement executive director for SPARK, says the 93-school district did a pilot with EFP and the drugstore chain CVS last year. CVS promoted its flu shots on flyers, the foundation’s website, and on banners at stadiums. The schools earned $30,000 from the six-week effort. SPARK, an acronym for Supporting Partnerships and Resources for Kids, is currently looking at other proposals with EFP.

“The reason we did it is our donation dollars are drying up,” Henry says. “We had businesses that used to donate every year, and then they stopped during the recession. This is a good way to counterbalance that.” Now, instead of asking companies for philanthropic dollars, SPARK can talk to companies about marketing dollars and returns on investment.

Scott Layne, assistant superintendent of school support services at the Irving Independent School District in Texas, says the district signed a contract with EFP earlier this year, after the Texas state legislature cut $12 million in school funding. “We cut 150 positions, and we had to cut programs in order to deal with the state funding cuts,” Layne says.

Cutting programs was not enough, and the school district had to find ways to generate revenue to offset the shortfall. That’s where EFP came in, Layne says. The first corporate sponsor to come onboard was the office supply giant Staples. The retailer is the primary sponsor for the back-to-school program, which kicks off with a Saturday event for parents and kids to come in and get free school supplies. They still have to buy other school supplies, so Staples gives them a $10 coupon that is attached to the school supplies list.

Layne says the Staples sponsorship netted the district about $8,600 for June through September. The goal is to earn up to $300,000, but there are no guarantees in the agreement. The revenue is important, he says, but what is really helpful is EFP’s expertise. “Many school districts have tried to do their own marketing and sponsorships in the past and some do quite well, but some sponsorships are incredibly time-consuming, and we just don’t have the staff to do that, or the expertise,” he says.

Not everyone is happy about corporate sponsorships in schools. The Washington, D.C.-based consumer group Public Citizen has a project called Commercial Alert, which aims to keep advertising out of the school systems. The group, whose tagline is, “Protecting communities from commercialism,” hopes to keep marketing messages in their “proper sphere,” or out of schools.

“We understand it looks really appealing because of the financial details, but we say what are the risks?” says Elizabeth Ben-Ishai, Ph.D., campaign coordinator for Commercial Alert.

Ben-Ishai says one school district – which is not a client of EFP – accepted electronic blackboards for use in classrooms, in exchange for featuring a corporate logo on the boards. “So all the time the students are looking at the board, they are looking at a fast-food logo,” she says. She adds that the revenue is always very low compared to the amount that schools really need to make up for budget shortfalls. “If you wouldn’t do this in better times, why do it now?”

Commercial Alert sends letters to school districts that announce plans to accept corporate advertising, and asks them to rethink the policy. The responses vary. “Sometimes they say they appreciate the additional information,” she says. “There are some school districts that are deciding not to do it.”

Freeman, not surprisingly, disagrees. “Districts are way past asking do they want to go into this world,” he says. “Districts want the help. They just want the right partner.”

Freeman earned an MBA from Harvard Business School in 1993. He was president of Outward Bound, held marketing positions at Sprint and other companies, and was president of Schoolpop Inc., a company that sells items online to raise money for schools.

EFP was a finalist in the Harvard Business School’s Alumni New Venture Contest this year. Freeman says EFP is currently talking to 150 school districts, and has 25 signed agreements so far. In September EFP announced it had facilitated an agreement between Mishawaka, Ind.-based Better World Books, a for-profit company that collects and sells pre-owned books, and Anne Arundel County Public Schools in Maryland. The school district will receive funding from sales of books that are put in book collection boxes placed on school grounds.

Separately, EFP has also signed Klein Independent School District in Texas and Carroll County Public Schools in Georgia.

“More are coming on every week,” Freeman says. None are in Colorado, but the company is working on it. According to EFP’s website, the goal is to bring $100 million of sustainable, annual unrestricted cash to major public school districts by 2015.