The Gates Foundation Funds Facebook Apps for Studentsby Sarah Kessler, mashable.com
February 9th 2011
The Bill & Melinda Gates Foundation has contributed $2 million in funding to a Facebook application with the hope that it will help improve postsecondary education graduation rates in the U.S. This is the first time the Foundation has made a direct equity investment in a for-profit company as part of its charitable mission.
Inigral’s Schools App creates a closed community of students within Facebook’s platform. Retro Venture Partners and Founders Fund also contributed to what totaled to a $4 million round of Series B funding.
About 11 schools use customized versions of the app, which Inigral’s CEO and founder Michael Staton describes as “a cross between Yammer and Twitter.” Essentially, each student gets access to two real-time streams. One provides updates from everyone at the school. The other contains updates that only pertain to topics the student has indicated she or he is interested in. Students can join groups and interact without friending other participants.
“The key is the way that we’re designed is to help people who don’t know each other get to know each other,” Staton says. “Whereas Facebook is designed to have people who already know each other stay in touch with each other.”
Schools App fills the void that Facebook left when it removed the requirement to sign up with a school e-mail address, its education networks and courses features in order to pursue a larger market. The app, which launched in 2009, turns the Facebook platform into a school community again — a function that turns out to be quite important.
Engagement with peers and school activities is widely regarded as one of the most important factors in whether a student graduates. When the ACT surveyed about 1,000 academic officers in 2004 to gauge what led students to stay enrolled in postsecondary schools, it found first-year programs that encourage peer-to-peer interaction to be among the three greatest contributors to retention.
Schools pay between $10,000 and $50,000, depending on the number of students, to use the app each year. It’s an interest in student acquisition as well as retention that drives this purchase. When deciding between the schools they’ve been accepted to, students are more likely to go to a school where they’ve already started making friends online (at least the that’s how the theory goes).
One school that invites its admitted students to join the school’s app, The University of Texas at Tyler, has started using participation in the app as a predictor of student enrollment. Before the app, whether a student had attended a campus tour was the best predictor. Students who had made a trip to campus were three times more likely to enroll than students who did not.
The school found, however, that students were five times more likely to enroll if they had used the application.
The Schools App offers an appealing value proposition for schools, a likely payout for investors, and an intriguing experiment for organizations, like the Gates Foundation, that are focused on improving graduation rates. That all three of these parties are happy with the same product seems like a small miracle (even Facebook is a fan) — but the true test will be whether the payoffs are as equally distributed as the anticipation.
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