Dealing w/ Outside Interests in Your Projects?

Anthony Boyd asks: "Last weekend, I built a web site that is a poor-man's version of Classmates. Except that it is custom-built just for my high-school, with no ads or fees. I got a fine response from the people that knew about it, and was busy reconnecting with lost friends... until [last week], when my school's alumni association called and gave me an earful of comments such as, 'that's a rogue site' and 'it may not be legal!' Turns out, they hoped to build something similar, as a platform to entice donations. So, I'm stuck. Before I do anything, I'd like to ask Slashdot: have the projects you built for 'just for fun' been overrun by outside interests? If so, what did you do, and what would you have done differently?"