The new principal, Jim Baxter, is given a year to work on planning and preparation prior to the opening of the school. He spends most of that time selecting faculty and organizing programs, but he also has to deal with a constant stream of vendors proposing “opportunities” and “partnerships.” Like most leaders in the public sector, Jim is confronted daily with people far more skilled at selling than he is at buying. Not everyone who visits Jim is selling something, however. Many want to “give” the school a product or service under the auspices of community patronage. A local dentist, for example, wants to give every student a toothbrush with his name on it. Similarly, a pediatrician wants to distribute guidelines for good hygiene along with information about his practice. Retail merchants have book covers and mouse pads featuring the names and logos of their sponsors; fast food restaurants want to give away gadgets and coupons; and a host of businesses—video stores, record shops, shoe outlets—are proffering a plethora of “gifts” for the students, simply in order to gain a market advantage.
A computer company makes a particularly intriguing offer. Each teacher will receive a computer and a lab will be established for students if Jim agrees to endorse the company. Such an endorsement would require Jim to encourage parents and students to purchase their computers from this particular store if they want to be compatible with the software and technology students will be using at school.
Legal and Policy Considerations
Increasingly, schools struggle to retain funding for education. Even as government education budgets shrink, school demands continue to grow, thanks in part to increased accountability. As a result, schools have had to find creative ways to fund their goals. One method of raising additional money or acquiring needed supplies for students is through some form of commercialism. The degree of commercialism varies and may include exclusive contracts, vending relationships, fund raising, naming rights, direct and indirect advertising, sponsorships, endorsements, or leasing school property. Although such opportunities provide much needed cash for schools, they also raise a host of serious legal and policy concerns. According to one survey based on media references, commercialism in schools has been on the rise from 1990 through 2000, with a slight decline, overall, in 2001 (Molnar, 2002).
Generally, the legal issues associated with this emerging area fall under contract law and procurement law. Of the two, procurement laws more frequently address commercialism in schools, but by and large, decisions related to this issue have been left to the discretion of school boards. As commercialism in schools becomes more prevalent, however, responses from the public and, hence, legislators are expected. In some states, legislation already addresses commercialism by permitting it, regulating it, or prohibiting some forms of it and allowing others.
Commercialism in schools can provide great advantages for students, staff, parents, and the public, as well as financial relief for government funding sources. The trade off for the extra funding and/or supplies and equipment, however, is students' exposure to advertising, either directly or indirectly, while under compulsory attendance. Corporate America “pays” schools to gain access to students—a profitable market. Although a corporation's goal may be genuinely altruistic, it is always capitalistic as well—namely, to get students and their parents to buy and use certain products and services, and/or to build brand loyalty for future consumers. For example, in the now famous Channel One instance, schools received technology equipment in exchange for student exposure to two minutes of commercials.
State Law
Taking a step beyond the general coverage of contract and procurement laws, some states do specifically regulate commercialism in schools, at least in part. According to a recent Government Accounting Office (2000) report, “state laws and regulations governing commercial activities in public schools are not comprehensive and that, in most states, local school officials are responsible for making decisions about commercial activities in public schools.” Nonetheless, some state laws do specifically prohibit, restrict, or permit some or all forms of commercialism in schools. The following are examples of such laws and regulations:
- N.Y. State Regents Rules § 23.2 prohibits certain promotional activity in schools. “Boards of education or their agents shall not enter into written or oral contracts . . . for which the consideration . . . consists of a promise to permit commercial promotional activity on school premises. . . .”
- Wisconsin Code § 118.12(1) allows any person to “sell or promote the sale of goods or services” on school property except as prohibited, restricted, or provided for in school board guidelines.
- New Mexico Code § 22-28-1. “The right to sell advertising space on school buses shall be within the sole discretion of the local school board. . . .”
- Wisconsin Code § 118.12(4). “If a local school board grants exclusive rights to a soft drink vendor, then “the contract may not prohibit the sale of milk in any school and, to the maximum extent possible, the school board shall ensure that milk is available to pupils in each school covered by the [exclusive] contract.”
- Florida Code §§ 1001.43 (2a) and (5). The district school board may adopt policies for (1) “sales calls and demonstrations by agents, solicitors, sales persons and vendors on campus . . . and (2) advertising in schools for business/community partnerships . . . [and] public solicitations in schools, including the distribution and posting of promotional materials and literature.”
- California Code § 35182.5. The local school board may not “enter into a contract that grants exclusive advertising or grants the right to the exclusive sale of carbonated beverages . . . unless the [school board] has adopted a policy after a public hearing . . . to ensure that the district has internal controls in place to protect the integrity of the public funds and to ensure that the funds raised benefit public education, and that the contracts are entered into on a competitive basis pursuant to . . . Public Contract Code . . .” or a request for proposals.
The school purchase of goods and services is governed by state and, sometimes, local procurement laws. Depending on the type of commercialism and the value of the potential contract, procurement laws and local procedures may be invoked. It is very important to check state procurement laws and local policies and procedures before entering into any type of commercialism agreement or situation. A request for proposals or even a formal bidding process may be necessary.
Federal Law
Although no federal law regarding commercialism per se exists, national advocacy groups continue to lobby for such. For example, Commercial Alert, a nonprofit organization, is lobbying Congress to pass a “Parents Bill of Rights” that includes a prohibition against advertising in schools. (See http:\\www.Commercialalert.org
for more information.)
Practical Considerations
School boards and administrators face pressure both from those who oppose commercialism and those who want additional funds to meet educational goals. Recently, some school boards have responded to this pressure by taking a no commercialism stance. For example, the Seattle School Board decided to phase out Channel One broadcasts. The situation with Channel One was that schools were offered television sets for every classroom in exchange for a block of daily time that students would be permitted to watch “news” and commercials. The deal was a marketing success, with advertisers of everything from jeans to records paying top dollar to get their wares in front of teen buyers. Although many school districts took the deal, others were skeptical of selling to a captive audience assembled through compulsory attendance laws. The Seattle School Board also prohibits advertising on score boards and school buildings, but it does allow logos for identification (rather than advertising). Other boards swing in the opposite direction, advocating commercialism to the fullest extent to provide for cash-strapped schools. Regardless of one's ideological stance on the issue of commercialism, below is a list of suggestions:
- Keep student interests at the forefront. Students' attendance at school is compulsory. Should policymakers allow marketers access to this captive audience? Or, are the extra funds so necessary to achieve the school's goals that exposure to marketing is acceptable? Each school board and administrator must make these tough policy choices. Perhaps a certain level of commercialism is acceptable for the cafeteria, but unacceptable for computers or textbooks. The pros and cons of each potential “commercial” contract must be balanced against what is best for students. (In one instance, students were being encouraged to drink soda, even during class, in order to meet the vendor's quota requirements for the maximum pecuniary benefit to the schools.) Health issues, the role of commercialism in schools, and the financial and pedagogical effects of such commercialism must all be considered.
- Negotiate legal and practical obstacles with experience. Educators who engage in commercialism frequently express concerns about negotiating with experienced vendors. Administrators may be excellent educators and leaders, but are not usually experienced sellers or buyers as well. Knowing the ins and outs of the contracts and what exactly must be accomplished to receive the maximum financial or product gain is critical. Use knowledgeable and experienced people for negotiating these contracts.
- Check state law and local policy.
- Develop collective expectations (via staff, school board, community, corporate, and parent input) for school business partnerships. One principal suggests, “Get every corporate . . . partner to engage in a dialogue with students . . . tap [corporate] resources to drive and improve . . . curricula, and bring [the partner] full force into [the education] world at the same time [schools] venture into [the corporate world]” (Alexander & Riley, 2002).
Postscript
Jim has quickly discovered that in some instances, accepting a “gift” carries too high a price. If the computer company's proposal is consistent with school board policy, he can accept the computers being offered, but if the cost to students, parents, and the community is too great, then he will have to decline.
If no district policy exists that speaks to this request, Jim will need to ask if there are any state laws prohibiting sole source purchasing without extraordinary justification. Have other vendors in the community been given the same opportunity, and would any of them be willing to offer a better proposal? A final caution should rest with the community. Will parents feel comfortable being locked into purchasing from one company? Jim has found that he must be savvy about those who come bearing gifts, and he has realized that true giving does not include an expectation of reciprocation.