Fundraising grows up; forget cute bake sales. Smart school districts are creating programs to raise big money to fund teachers and buildings.

Using private funds is nothing new to most school districts. Bake sales and student carwashes have been funding activities for decades. Your district may already have a deal with a sporting goods company to subsidize its sports programs.

But lately this picture is drastically being redrawn. The bottle redemption drives are being overrun by "serious" fundraising, and districts are using this new money to pay for items as varied and necessary as new teachers and new schools.

Consider these three recent examples: One New York City elementary school raised $700,000 to pay for a new library; Detroit is weighing a $200 million offer from a Michigan philanthropist to establish 15 new charter schools; and a Silicon Valley school district has raised $300,000 over two years, primarily to save the jobs of librarians, music teachers and computer lab aides.

This large-scale fundraising, once the exclusive domain of elite private schools and colleges, is becoming more popular throughout the country. According to the National Education Association, public schools from California to New Jersey are using hundreds of thousands of dollars more in private donations to ward off cuts to staff and facilities. Almost half of the parents in a 2004 survey by the National PTA and QSP Reader's Digest said their school was raising money for items usually covered in their district budget.

CREATING NON-PROFITS

"The money that school districts would like to put into their systems is getting harder and harder to come by," explains the National School Boards Association's Ann Suydam. "Many people within these communities are saying, 'If we can't get the public money that we need, then we're going to raise the money ourselves.'"

In great part, these districts are doing so by establishing 501(c) (3) non-profit foundations, which can concentrate on the business of finding private money. These foundations also can attract high-powered members to their boards, and their tax-free status increases their ability to raise funds.

"You're not going to raise the dollars you need by selling cookies or candy bars. You have to go after the big bucks," says Les Adelson, the superintendent of the Moreland School District, which covers San Jose and Cupertino, Calif. This district's all-volunteer foundation has raised nearly $300,000 in two years, saving many staff positions from cuts.

There are close to 5,000 school foundations across the country. And working successfully with them is becoming part of the job description for school leaders, says Howie Schaffer, a spokesman for the Public Education Network, which represents 90 public school foundations.

"This is an important new component and competency," Schaffer says. "It's a job that district administrators have to focus on. If they don't, it's at their peril."

It's no surprise California is at the forefront of the foundation movement--which started decades ago with the constraints of Proposition 13 and has accelerated during the past three years because of the state's budget crisis. Susan Sweeney heads the California Consortium of Education Foundations, a support group for more than 500 members. She says that their missions go far beyond saving jobs and are as diversified as the needs of their school systems.

"There's no magic bullet or cookie-cutter answer," Sweeney says, noting that while one school foundation in California has focused on funding a dental van, another serving a community of itinerant workers has financed an extended afterschool program.

The ways of raising money are just as diverse, but many foundations are taking their cue from the tried and true practices of private institutions. The Falls Church Education Foundation, born a year ago in an upper-middle class district in the Virginia suburbs of Washington, D.C., is seeking large private donations to build a $10 million endowment in the next five years. The endowment will fund programs the school system cannot afford, including support for the sciences, international exchange programs, and leadership and sabbatical programs for teachers, with an eye towards improving teacher retention.

ALUMNI SUCCESS

In New York City, the P.S. 6 Alumni Foundation recently appealed directly to the graduates of this upper East Side elementary school for almost $750,000. "The principal definitely wanted a new library built and I said, "I'll raise the money,'" recalls Susan Shaffer Solovay, a P.S. 6 parent.

Solovay single-handedly located records and addresses of past graduates, entered thousands of names on her computer, and sent out mailings. She populated the foundation board with well-heeled alumni and organized a glitzy fundraising benefit as well, although she says that most contributions arrived in small amounts.

"A lot of people would say, 'You're a silk stocking district school,' but every public school has caring alumni," she says. "I got letters from so many people who had fond memories. I touched a chord, and people sent me checks for $10, $25 or $75."

The benefits of educational foundations add up to more than dollars and cents, though. NSBA's Suydam sees considerable value in the volunteers that most foundations draw. "They do the leg work of going out into the community, working to get on the Garden Club agenda, or visiting Sunday school groups," she says. "In some foundations where there isn't enough staff, volunteers could even do office work."

"What's really significant is not just the money, but the building of a community and a relationship," says Moreland's Adelson.

That relationship raises community awareness of the public schools and provides an excellent opportunity for good public relations, adds Linda Lecht, president of the Miami-based Education Fund. "It's not like the school system blowing its own horn," Lecht explains. "It's an independent group saying, 'This is a good cause.'"

HELP FOR POORER DISTRICT

Despite the positive impacts of the foundation movement, it also has raised concerns about richer districts getting richer and less affluent districts being left behind. That's where The Public Education Network is striving to make a difference. Its 90 member foundations all represent low-income districts, most of them with 60 percent or higher rates of students receiving free or reduced lunches.

PEN raises millions directly from donors such as the Ford and Gates foundations and then re-grants that money to its members. A recent, large grant from the DeWitt Wallace-Reader's Digest Fund paid for 34 PEN members to improve libraries and media centers within their schools.

But PEN also teaches district foundations how to fish for their own funding. PEN spokesman Schaffer points to cases of a local auto body shop funding vocational training and local law firms endowing chairs for teachers.

"We want to shine a spotlight on places raising money and on best practices," he says. "We want to say, 'You can do this too.'"

The spotlight is shining especially brightly on long-standing programs in Lincoln, Neb., and Miami. Since 1989, the Foundation for Lincoln Public Schools has raised $13 million, much of it to finance a wide array of mini-grants for teachers.

Currently the foundation is overseeing 450 such projects, driven by an innovative Web site that lets prospective donors find and fund approved proposals by teachers. The computer matching service--called "Fund-A-Need"--lets these donors search by academic discipline, grade level and dollar amounts

"We're the eBay of fundraising," says Executive Director Barbara Bartle.

Also revolutionary is her emphasis on planned estate giving, another approach long favored by universities and private schools. The foundation has recorded individual bequests as high as $195,000.

The Education Fund in Miami, meanwhile, has made its own inroads to corporate funders, including AT&T and Citibank. The Ed Fund worked with the latter company to distribute free computers to needy students and their families in a program that started with 100 laptops and grew to more than 5,000 as other local businesses pitched in.

Now 20 years old, the Ed Fund has expanded its staff of 15, along with an additional 30 AmeriCorps volunteers, and now raises $3 million a year for Miami's schools.

HEADING OFF POTENTIAL PROBLEMS

Still, the prospect of private contributions to public education does not come without complications, and the proposed $200 million gift from the Robert Thompson Foundation to Detroit is the largest case in point. The offer would require the 15 new charter schools it funds to graduate 90 percent of their students and send them on to college. But it has languished amid concerns about equity for the rest of Detroit's schools, questions over who would control the new schools, and protests by Detroit's teachers' union.

Turf battles can cause problems on a smaller scale, as well. "Every school has its PTA," says Moreland Superintendent Adelson. "The challenge is having another fundraising organization in your school. You don't want rivalry between two groups fighting over the same dollars."

In Miami, the Ed Fund worked with the PTA to produce a parent resource guide for the district's 300 schools, although the foundation raised more than $200,000 to pay for it and reached out to the local media to publicize it.

First-year Executive Director Donna Englander has maintained a cooperative and communicative relationship between the Falls Church Education Foundation and the school district's other fundraising arms. "Our athletic boosters wanted us to sell naming rights for our athletic fields," Englander recalls. "Our attitude was, 'Let them continue finding donors.'"

Equally important is making sure the district's educational foundation and school board stay on the same wavelength. "Before I got hired, one of our schools was going to lose a teacher, and parents raised $50,000," says Adelson. "We can't have individual schools saying we want smaller class sizes than others." So the Moreland School District is publishing guidelines on what personnel outside groups can fund.

Although she's just starting out, new Falls Church Superintendent Lois Berlin also is watching out for potential conflicts. "There are lots of ideas that get bandied around by the foundation board," she says, "but we have to be sure that the grants match where we are going--not, 'Look, the foundation got this money. Let's create the academic program to match.'"

"And there needs to be a clear process for distributing funds so it doesn't become partisan," Berlin adds.

"It's a delicate balance when you have an outside group doing the strategic planning," admits Lincoln's Barbara Bartle. "Communication between both sides is really critical."

HOW TO START

Those affiliated with successful school foundations have plenty of other advice to offer, starting with a warning to keep them independent from the district office, even though the superintendent frequently sits on the foundation board.

"You can plant the seeds," says Adelson, "but you have to have a grassroots organization because as a superintendent it's hard to go to your parents and say we need you to give us money,"

"You're also getting the resources that you might not get with an in-house development team," says Miami's Linda Lecht. "Sometimes the things that we're doing are things that the schools don't know they want to do yet."

"A foundation is a good barometer of what's going on," adds the California Consortium's Susan Sweeney. "Sometimes schools put blinders on and don't want to hear about certain needs. The foundation can be the articulator of that need."

Even with a strong board, a good foundation needs to define its projects for prospective donors, says P.S. 6's Solovay, who works with private sector investors in her day job on Wall Street. "They really want to know what the specific project is and to see it happen," she insists. "People don't want to put money into what they perceive as a black hole."

Sweeney offers an additional caveat to any district considering a foundation. "It's not a quick fix," she says. "It takes time and energy. It takes the administration, the school board and the community to make the investment, but they can reap amazing benefits over time."

Private fundraising also can't fix everything, adds PEN's Shaffer, who estimates that even in the best of times, private donations may come to five cents on every dollar. "This is not going to replace public spending on public education."

But these fundraisers worry that their efforts could result in little net gain if public funding shrinks as a result. "Our biggest concern is that if [we] raise the money for our endowment, does this mean that the city council doesn't have to fund schools at the same level," asks Fall Church's Englander.

Still, foundation leaders and the superintendents who support them say private money is here to stay in public education. "Whenever you have people who come together to raise money for schools to benefit the students, it's really a no-brainer," says Falls Church Superintendent Berlin. As far as Moreland Superintendent Adelson can see, he'll be depending on private contributions.

"Until California is willing to change the way it funds education, we're going to need private funds," he says. "My job is to make everything work in our district, and our foundation has been absolutely critical to making it work."

FUNDRAISING COAST TO COAST

SEATTLE, WASH.

While not fundraising specifically, two Seattle public schools have been charging parents $2,000 a year to send their child to full-day kindergarten classes.

PALO ALTO, CALIF.

Equity is a big issue when rich schools outpace poor schools in the same district. Palo Alto (Calif.) USD is one of a growing number of districts creating rules to avoid problems. Money raised is given to the district and redistributed evenly to all schools.

IDAHO

Many foundations are donating money to districts for specific projects; Albertson Foundation in Idaho is no exception. The group promised $35 million over five years to help the state build a student information and reporting system to help keep up with NCLB's demands.

MANCHESTER, VT.

To avoid sending the bulk of its local tax money to the state, this town decided to attach a discretionary "bill" that assesses every property owner extra to pay for local schools. Problems have ensued as about 400 of the town's 2,700 residents have refused to kick in their share.

ATLANTA, GA.

The Bill & Melinda Gates Foundation has given away more than $2.2 billion to education since 2000. Recently, it gave $2 million to the University System of Georgia Foundation to create six early colleges for students underserved in high schools.

THE EBAY OF FUNDRAISING

The Foundation of Lincoln (Neb.) Public Schools runs a matchmaking service between teacher requests and interested school donors. On the page shown above, potential donors can search for various projects that need funding by grade level, dollar amount or discipline area.

A VARIETY OF WAYS TO GIVE

* ESTATE PLANNING The foundation allows people to set up their wills to give part or all of their assets to the non-profit. While the Lincoln group has someone that interested people can talk to, it does suggest all changes to estate plans should be approved by an attorney or financial advisor.

* DONATING STOCKS For people who want save tax money while donating, the foundation has created a way for individuals to give the foundation stocks they have held long-term. Individuals get a deduction of stocks at fair market value and don't have to pay tax on the capital gains.

* CREATING SCHOLARSHIPS The non-profit administers more than 100 post-secondary and undergraduate scholarship opportunities for Lincoln students.

Ron Schachter is a freelance writer based in Newton, Mass.