At least 10 teachers took part in the "dystopian" event held on Saturday at the Sioux Falls Stampede junior ice hockey game at Denny Sanford Premier Centre.
In a video, now viral on social media, the teachers can be seen kneeling on mats and scrambling to get hold of as many dollar bills possible from a pile of cash in front of them, all within five minutes.
The participants grabbed the bills and stuffed them into their clothes and helmets.
The $5,000 cash was donated by a local lender CU Mortgage Direct, who gloated about the peculiar nature of charity.
"With everything that has gone on for the last couple of years with teachers and everything, we thought it was an awesome group thing to do for the teachers," Ryan Knudson, business development and marketing director at CU Mortgage Direct, told South Dakota-based newspaper Argus Leader.
"The teachers in this area, and any teacher, they deserve whatever the heck they get," he added.
Prior to the teachers getting ready for the event, organisers dropped three bags full of one-dollar bills and spread them on a big mat.
Alexandria Kuyper, a fifth-grade teacher at Discovery Elementary School, said that while she could ask for funds for classroom items, holiday decorations and other smaller items can incur extra costs. She managed to get $592 from the pile of cash.
Barry Longden, teacher at the Harrisburg High School teacher, told the newspaper that he was planning to use the money to purchase equipment for the school's e-sports club. Mr Longden grabbed the highest amount of $616.
"I've been throwing my name in the hat everywhere I can find so that way I can get opportunities to get money for the kids," he added.
Netizens on social media slammed the event and called it "dystopian", "humiliating" and "depressing". It was even compared with the popular Netflix fiction show Squid Game where participants are made to compete in eccentric games for money.
Rabbi and author Danya Ruttenberg wrote: "These professionals are doing this ridiculous thing in the hopes of being able to procure the basic supplies necessary in order to do their jobs correctly. Which is to educate children. For which they are paid poorly. Tax the rich. Tax them a lot".
Democrat candidate for Congress Eric Garcia suggested increasing the "education budget so teachers' struggles aren't used as a spectacle".
Teachers in South Dakota were paid an average salary of $49,220 during the 2019-2020 school year. The Sioux Falls school board voted in May to raise the base pay for new teachers from $37,000 to $41,000.
Poor funding has also forced them to seek donations for classroom supplies.
In August this year, education leaders in South Dakota said that every school district in the state was dealing with staffing shortages for the upcoming school year.
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