Scalable architecture

[eluser]txomin[/eluser]
Surely, the title is only correct in reflecting my ignorance.

Some of my work involves writing code for schools and universities to manage certain student activities. As each school hires me, I recycle code from previous projects and get them on their way.

I have come to a point when I'm considering creating a website and delivering the entire thing as a service. In other words, right the code out once (or most of it, anyway) and then add schools (and their students) as they come.

My question is probably stupid but, how do I handle several schools at once? Do I write a controller for each? After all, most of the code will be the same while certain parts will be customized for each school. And how about database architecture? One database per customer seems a bit of a waste (one school ~= 1,000 students). Does this make any sense?

I've searched the forums but without luck. My mistake, no doubt.

Any help is appreciated. Thank you guys.