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More insight into the National Council’s role in unit fundraising

Mark Moshier and the fundraising experts at the Boy Scouts of America hear you.

Last week’s explanation of why a unit’s fundraiser was determined to be against BSA rules left some of you with even more questions about fundraising and the National Council’s role in the money-earning process.

Some of you even questioned whether the National Council regulates fundraising projects because it wants to make sure to get its cut of the profits. Let me say right now: That’s not true.

Read below as Moshier, head of the BSA’s Fund Development Department/Fundraising and Staff Development Team, takes time to address many of the questions you raised in the comments section of last week’s post. His official answer, after the jump …

Mark Moshier responds

The National Council, Boy Scouts of America, has a responsibility to uphold the standards set forth in the Charter and By-Laws and Rules and Regulations of the BSA and to keep the Boy Scouts of America and local councils in compliance with IRS and other government regulations. The BSA standards are reviewed regularly by volunteers and staff to determine if they need to be updated, but several basic principles have not changed for decades.

The National Council is funded by registration fees and sale of supplies, the Local Council is funded through contributions, and Units are funded by money-earning projects. The document Who Pays for Scouting” (PDF), or something similar, has described this tiered approach for many years.

The national organization is not looking for and has no interest in receiving any portion of unit fundraising activities. Similarly, the national organization does not receive any proceeds from council product sales, such as popcorn. Each local council works with independent vendors to create a product sale program that best fits its needs. If there are issues with the popcorn sale, that should be addressed at the council level.

Car washes and spaghetti suppers advertised as “free — donation accepted” are permissible. If a person sees a sign for a car wash, spaghetti supper or another activity, he or she makes a conscious decision to participate and support that activity, and he or she fully expects that it is not truly free. However, they may take you up on your offer of a free car wash or a free dinner. In the activity of bagging groceries, it is likely that the shopper did not make a decision to participate and is now obligated to donate.

The tradition of not accepting tips for what is essentially a good turn goes back to the story of W. D. Boyce lost in the London fog. When a Scout helped him find his way, the Scout refused a tip. That so intrigued Boyce, a hard-nosed business man, he sought out Sir Robert Baden-Powell and subsequently brought Scouting to America.

Some commenters have brought up the Kickstarter route for fundraising. If you read the proposal carefully, the troop is not using Kickstarter to raise money to fund the troop. They are looking for investors to fund a video on how to plan a major group activity, which will be available to Scout units and other organizations. In fact, the Kickstarter site specifically states that the program may not be used to raise funds for a nonprofit organization. Kickstarter is  a “venture capital” website, so the video would be fine, but the site is not to be used as a fundraising venue.

We understand that units have funding needs and social attitudes, technology and communities are changing. We are trying to maintain a framework where all of the interests of the Boy Scouts of America can be achieved. We truly question our own policies and procedures every day and evaluate whether they are still valid. At the end of the day, we realize that we are a movement of 1 million registered volunteers and countless more interested parents and other parties trying to do the best to further the Scouting movement. There are some absolutes that are either legal or regulatory in nature.

The national organization tries to provide broad guidance that will not need to specifically address every new idea that comes down the road. We cannot “what if” every idea from more than 100,000 packs, troops, crews and posts. We trust in the belief that reasonable and rational people who are committed to Scouting ideals will do reasonable and rational things to bring Scouting to more young people.

28 Comments on More insight into the National Council’s role in unit fundraising

  1. Thank you Mark and Brian. Was wondering if a clarified statement could be made on the use of Scout Accounts, where a scout gets funds credited from a product sale with the intent that he can use it toward his own costs (in essence to ‘pay his own way’). This practice has recently been brought into question in regards to the IRS’s opinion on its legality, and whether the sales income would be a personal, taxable benefit when used for that scout, rather than spread to all the boys in the unit.

    • Additional guidance coming shortly on this topic.

      • and the effort is greatly appreciated. thank you.

  2. Yeah, what Mark and the Finance Support folks said!! Thanks for providing the “official word” on the previous thread. I would recommend also posting this same information over in that previous thread so that it could be “closed out” with appropriate BSA information! Thanks again!

  3. Next Ask the Expert still needs to be a pro-active, definitive address on the issue of individual scout accounts.

  4. From what I’ve seen, particularly with regard to the IRS, try to get the unit’s finances in order and get a 501(c) 3 status. It is not easy, multiple rejections are possible, but the IRS is generally helpful in getting you compliant. Then it will satisfy the District/Council/National that you can fund raise, without incurring income tax issues. If you don’t get 501(c) 3 status, you could be liable to have to pay income tax. Popcorn is not an issue since all money goes through the Council which should have the 501(c) 3 status, like our Council.

    As a matter of fact, getting a 501(c) 3, you could even self charter, like one Troop in our Council has been able to do (they lost their chartering organization charter, so they had to self charter to still exist – the first Troop in our council and one of earliest Troops in the nation). It was a little dismaying to see them lose their chartering organization after over 100 years, and a strong 150+ member Troop.

    • I’ve always been under the impression 501(c)(3)s were frowned upon by BSA as “only the councils can be non-profit.” I tend to think that units should be permitted to do whatever it takes to be financially sound. If it is willing to engage in the administrata of forming and maintaining a corporate entity, it should be able to do that without creating a shadow group “friends of troop xxx” just to get around a restriction. A well-funded unit can engage in more long term planning and have healthy grant program for scouts who need assistance. Units with their own corporate structure would also provide a measure of insulation for COs, which may itself be beneficial in the recruitment and retention of COs.

      I would echo the comments above and suggest that future ask the expert pieces be focused on permissible ways allocate fundraising to individual scouts and 501(c)(3)s and related unit structuring and finance issues.

    • From FISCAL POLICIES AND PROCEDURES FOR BSA UNITS:
      http://www.scouting.org/filestore/financeimpact/pdf/Fiscal_Policies_and_Procedures_for_BSA_Units.pdf

      A volunteer suggested that our unit apply for its own tax-exempt status. Can we?
      Units should not incorporate or apply for their own tax-exempt status. For one thing, units are not legal entities. Even if they were, this is an expensive and time-consuming process. Units are only permitted to raise funds through approved unit money-earning projects. Units could lose their charter if they tried to get their own tax-exempt status and solicit tax-deductible gifts.

      Can my unit credit amounts from fundraising to an individual toward their expenses?
      No. The IRS has stated that crediting fundraising amounts constitutes private benefit. However, the unit could use the funds (all or a percentage) raised to reduce or eliminate dues and various registration fees, purchase uniforms and Scouting books, and purchase camping equipment. The unit could also use its funds to provide assistance to individual Scouts in cases of financial hardship.

      • If the sponsoring Organization is a non profit, i.e. church, fraternal club, etc. then the unit can ask to use their tax free number to buy scout related items and use the 501 c (3) status for fund raising as units are not an entity but part of the organization.

  5. “In the activity of bagging groceries, it is likely that the shopper did not make a decision to participate and is now obligated to donate.”
    I strongly disagree with this statement and whoever thinks this has not actually participated in a grocery bagging fundraiser and has no idea how they even work. We have done grocery bagging fundraisers at a local major grocery chain for several different youth organizations, over many years, scouting being just one of them. First, we don’t even man all the check out lanes. We only cover about half of them so people always have the choice to go to a lane without baggers. They always have a sign up front indicating what youth group is bagging so everyone knows. Second, the customers are always asked if they want help bagging their groceries. If they decline the student/scout steps back and leaves them alone or helps another bagger in a different lane. Some people say sure, accept the help but do not tip and that is just fine. Because we are scouts we do not mind helping for free. As band or choir members, church youth group members or sports team members we don’t mind helping for free either becasue we all know how this works. Those that do tip give of their own free will. You can’t seriously be suggesting that someone would feel more obligated to tip a grocery bagger for 60 seconds of help than they would scarfing down a free meal. That makes no sense at all. A service or item offered for a free will donation is just that, a service or item offered for a free will donation, doesn’t matter what that service or item is. Whether you are washing cars, mowing lawns, bagging groceries or serving up a plate of spaghetti, the customer accepts or declines, and tips or doesn’t. It is all the same.

    • It seems the key element is the asking. Doing it correctly, just like the free will carwash, you are not doing the task unasked and then ‘guilting’ the person into donating.

      • We have held many bagging for tips in our scouting unit. In our part of the world, it is common knowledge that tipping a grocery bagger is just not done. No one should feel obligated to tip whether it is a store employee or a boy scout. We have had customers ask if they had to tip and the answer is always no. Many people are happy to give because they appreciate the scouting program. Some people do not tip, they just say thank you and are on their way.

        I would feel obligated to pay if I purposely sought out the service. I could not image showing up and having my car washed or eating a spaghetti supper and not pay. If I did not ask for or sought out the service, I would not feel obligated.

    • Correct. There is no obligation to tip. The customer is not asked to give a tip. If the customer wants to make a gift, that is up to them

  6. I was under the impression that as a part of the charter organization that a unit is actually NP through the charter organization (assuming the CO is nonprofit). After all, the CO charters the unit as a youth group type outreach.

    • The charter organization could do the fundraising on behalf of its youth programs? Even if its only youth program is Scouting? If a church is CO, and runs a weekly bingo, then the troop could be outfitted from bingo proceeds?

  7. Yesterday's Scout // February 8, 2014 at 11:39 pm // Reply

    National may not get a cut (although I will never believe it) but councils want their slice of the pie. And we’re supposed to send 20 Scouts plus adult leaders to summer camp (plus fuel, vehicle rental, lodging, and food along the way and back) only by selling popcorn and camp cards. Yeah. Sounds like the homosexual manta “Scouting for All” is turning into “Scouting for the Wealthy”.

    • Done it. Several times. Actually it was 30 Scouts and seven adult leaders. Several times. You know, instead of trying to beat the BSA up, you might want to spend time figuring out how to best send those 20 Scouts plus adult leaders to summer camp. Use your resources.

      • Yesterday's Scout // February 9, 2014 at 7:13 pm // Reply

        Bravo for you! You done it! How large is the city or town you live in? Our town is quite small. And, I’m not trying to beat up BSA; they beat up a lot of us older Scouters who saw something happen we never thought would come to pass. And it was done for no reason but to snag corporate dollars, no matter what “they” say.

  8. The towns (two separate Troops) were relatively small…under 3000 in one; under 12,000 in another. The BSA has a role in “snagging corporate dollars”. Those dollars are better used for ALL or a great majority of the BSA’s units — not just for one or two units in a town. Look at the grander scale, not just the local scale.

  9. Yesterday's Scout // February 9, 2014 at 8:10 pm // Reply

    So you are telling me that in a town of 3000 people you sold enough camp cards and popcorn to fund 37 people’s summer camp? Was the town Carmel-By-The-Sea, California?

    • Nope, it wasn’t in California. One was in Germany. The other was in Kentucky. We didn’t have “camp cards” but we did have “bowl-a-thon”. And yes, everyone registered in my Troop (32 youth, eight adults; we ended up taking 30 youth and seven adults) went to a full week of summer camp and we bought extra summer camp patches for them. Two of our Scouts sold enough popcorn to be the Council’s popcorn winners that year; they won bicycles in addition to a $500 savings bond which they turned around and donated to the Troop’s camping fund.

      • Yesterday's Scout // February 9, 2014 at 9:36 pm // Reply

        Nearest bowling alley is 50 miles away. But the popcorn story intrigues me. Two Scouts were popcorn winners. What about the other 30? Did all pitch in equally or was their a difference in effort and funds raised?

        • Like with anything Scouting, you have “high acheivers” and “the rest of the group. I had two “high achievers” who sold popcorn anywhere and everywhere they could and didn’t take “no thanks” as a good answer *smiling*. No, they were aggressive about their sales but they also took the time to sell the popcorn anywhere and everywhere they could. Our sister Pack tried as much as they could, but it was on the small side and many of the leaders felt that their popcorn sales did nothing for the Pack. If you want to know more, send me an email (settummanque@yahoo.com) and I’ll be happy to try to assist. In the meantime, let’s get back to the topic at hand –

  10. Yesterday's Scout // February 9, 2014 at 8:22 pm // Reply

    You wrote, “You know, instead of trying to beat the BSA up, you might want to spend time figuring out how to best send those 20 Scouts plus adult leaders to summer camp.” We were able to send everyone to camp by funding our trip via car washes and grocery bagging. Looks like those are out now. The Cub Pack kills us during popcorn time. We’re lucky to sell 500 camp cards in a year in this little town. Why don’t you tell me what you did?

    • I’ve been telling you; we used our resources. If you look around your small town as we did in our small town, there are plenty of ways that Scouts can raise the money needed to go to camp or anything else they want to do. You have to make a plan, have your chartered organization to commit to the plan, execute the plan as best you can, and avoid the temptation to spend it before you reach your goal. That Council that you keep beating up on can help you with some of this…worked for my units (twice) in two different locations.

  11. Yesterday's Scout // February 9, 2014 at 9:33 pm // Reply

    Concrete examples, please. “We used our resources” doesn’t help. And I’m not beating up on anyone or anything. I made some true, albeit very pointed, statements. On this issue National is telling us, “A Scout is obedient” just after they decided on their own to throw “morally straight” out the window.

  12. Yesterday; car washes are not out. We just can’t advertise a price for the service. We have done car washes for years and have never advertised a price. Yes, some people will take advantage to get a free car wash, but others always step up and give truly generous amounts to send boys to camp.

    Be creative! Rake leaves, shovel snow, mow lawns. Put on a spaghetti dinner fundraiser. Yes, sell popcorn. If you budget for your year’s program and make a plan so all the boys fundraise to meet that budget, you will be surprised and the rich year-round program your boys will experience without asking Mom and Dad for a check.

    • I would assume charging for parking in a specific lot where there are dozens of parking lots to choose from.at an event or festival is out of the question?

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