Is ILoveSchools.com a Scam? Read through this article and decide for yourself.
Website Iloveschools.com operates to connect teachers and schools with people interested in donating to schools in need. The Iloveschools.com site is not what it at first appears to be.
First, we look at what site functionality allows:
For the Schools
School can register and be verified as an actual school. The site assigns the school a gold star meaning the found the school on a list of schools. White star schools have not been verified yet. Any kind of school can register in the USA essentially.
For the Teachers
Teachers may create wish lists (called WishLists on the site) of items they can use and save the lists to the Iloveschools.com website. To create a wish list they browse the catalog of products (150,000 products covering everything a school can use and likely a whole lot more) and build a wish list of items they would like to have donated, or more precisely, money donated to fund.
For the Donors
Donors can browse these lists and make monetary donations toward the wish lists. The donors can also make in kind donations of physical items indirectly and directly to listed schools.
For cash donations, donors get an emailed tax receipt.
What is the Business Model and Is ILoveSchools.com Really a Non-Profit?
This is all a great idea, but let's also look at the business model behind Iloveschools.com First, start with the site FAQs:
What percentage of a donation goes back to the school?
100% of the value, minus a 3% charge card fee, goes directly to the classroom, less a 3% charge card fee. That means 97% of the financial value of a donation is reaching the classroom."
97% is HUGE! How can iLoveSchools.com afford to operate?
When WishLists are funded we permit donors to offer an additional 10% toward our administrative operations. We also receive a variable percentage on the items that are funded through new item WishLists.
Are donations made through iLoveSchools.com tax deductible?
Yes. I Love Schools, Inc. is a 501(c)(3) nonprofit charity incorporated in the state of California. When you donate to iLoveSchools.com you will receive a gift receipt via email that can be used for your tax records."
The site is reasonably upfront with their business model in the FAQs but not completely upfront so let's unpack this a little more.
There are 3 sources of revenue for the Iloveschools.com charity side of the business:
- Direct donations toward operating expenses
- 3% cut toward credit card fees
- unspecified and variable revenue share on products purchased through the website by teachers off their wish lists
From these 3 revenue streams the charity funds its operating costs which logically include staff, credit card fees, and office operating expenses.
But There is More
When one reads the How We Do It page there is a lovely story about how a for profit company called School Supply Drive LLC was created to support the owner financially and work on a favorable basis with ILoveSchools. The How We Do It page says that that School Supply Drive LLC makes money selling products to other people (and maybe it did at one point), but when you click through to the company's website you learn that:
"SchoolSupplyDrive.com is a reseller of contemporary, quality pre-school, K-12 and after-school equipment, materials and supplies. We currently offer our entire catalog of over 150k products exclusively to teachers registered on the non-profit iLoveSchools.com. We then return a significant portion of our gross profits so they can be used for their administrative and overhead costs or to give to needy teachers."
A Closed Catalog
If I had assembled a 150,000 item online catalog of school supplies that I needed to keep going to support my charity, and I had a large market of educators browsing my catalog anyway building Wishlists, I would definitely want to be able to sell products from my catalog to the public and those teachers. I'd advertise my lovely online shopping site all over my high-profile charity site so teachers, business people and donors could be buying stuff from my catalog all the time.
Instead, the catalog is closed to the public, and only accessible to teachers selecting products they hope other people will donate to. So unless you are a teacher and you create a wish list you can't see the catalog of 150K products meaning the donors have no way of understanding if the prices of goods their donations go against is a fair competitive price or not. Since Iloveschools/SchoolSupplyDrive is ignoring the chance to sell lots of stuff for cash to all the people that come through the site, there may be something wrong here. While the cash donated goes to buy school supplies, all the purchasing happens through the management's for profit business at unknown markups.
Elsewhere on the ILoveSchools website we can find that donated dollars can only be used to shop on this captive website. The teacher doing the shopping is really spending donated money, not out of pocket money, with no ability to shop around for the best deal. Further, at the point they are shopping they are not really shopping, just building a wish list of stuff. Prices are not really a concern and everything is theoretical at selection time.
We also learn elsewhere on the site that unless a wish list is fully funded after an unspecified period, the money donated against it is placed back on the dashboard for the donor to reallocate. I suspect that many donors do not bother to reallocate funds to another wish list, meaning unallocated cash tends to pile up unspent over time.
Is Iloveschools.com a Scam?
I don't know the website owners and am only doing this analysis on the information they post online. Clearly I Love Schools.com ultimately places valuable resources in the hands of schools that can use help (and pretty much every school can use some help). The cause is noble, but the system behind the site is not completely clear to the donors. I Love Schools is a For Profit business wrapping itself in a Charity robe to create sales that profit the owners.
What is the Best Way to Support Schools?
Schools are not hard to find - you already know where the nearest schools are and you are already connected to schools you attended and schools your kids/grandkids.neighbors etc attend. You do not need a website to verify the existence of the schools you know about.
But say you live in a rich area and prefer to help an inner city school instead. There are public and faith-based school districts that are easily identified online and no school is going to turn down a cash or product donation delivered to their door. They can also give you a tax-deductible receipt.
So a much better way to place real money into the hands of teachers who will use it to benefit worthy students is to make a direct donation to the school of your choice. Let the school shop wherever they like in the free market, not on a captive web catalog with unknown values. Let the school's seek out discounts and sales on supplies to make that donated dollar go further. You will be thanked by the teachers and, if you prefer, get to connect directly with the people you are helping instead of having a for-profit/not-for-profit website retaining a big cut between you and the recipients of your gift.