Is SchoolPulse a Non-Profit?

March 8, 2008

A bunch of people have asked whether SchoolPulse is a not-for-profit company, and the answer is no. Designing, building, and enhancing a community website, promoting our service to new users, and providing high quality customer support all cost real money. We expect to spend well over a million dollars in 2008 and we need to generate income to cover those costs. I suspect this question is driven by two perceptions:

1. Organizations in the K-12 education world tend to be not-for-profit.

This is certainly true for educational institutions, PTOs, education funds, and other charities. The absence of a profit motive may make it easier to trust and support them (it also paves the way for tax deductible donations), but the drawback of non-profits is that they have a hard time obtaining funding. Their operating costs are funded by tax dollars (in the case of schools), contributions, and grants (in the case of 501(c)(3) charities), whereas companies like ours are risky propositions (far more fail than succeed) and require significant up front investment to get off the ground. Investors expect a return on their investments, and that’s why SchoolPulse is a for-profit company.

2. Many think advertising detracts from the quality of their user experience.

Traditional media advertising is intrusive and often unrelated to whatever we are watching, reading, or listening to, but the internet is changing that. Think about the different web sites that you find valuable — the vast majority of them are free to users because they are supported by advertisers. The wonderful thing about the internet is that it gives users control over the advertising they consume and it allows advertisers to connect with people who are genuinely interested in what they are pitching. Take Google as an example that everyone reading this blog knows well. When we are searching for a product or service, the ads that appear above and beside the search results are highly relevant to what we are searching for.

I hope people can understand that our intentions are good. We are social entrepreneurs trying to create something to simplify lives and build community, and we need investment capital (now) and advertising revenue (later) to fund our growth. The alternative would be to charge our users to use the site, and history suggests that’s a recipe for failure.

I can promise you that when we introduce advertising later this year, it will be highly relevant to your community, it will not be targeted at children, and it will be done as tastefully as possible. If you have a better idea, please let us know!