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March 23, 2016 at 6:46 am #51290Craig MGuest
Recently, our pack has been doing fundraising for summer camp etc… and the topic of how to divide the $$ came up. The pack decided to divide the $$ by how much the scout/family participated. IE, if you worked a shift you got 1 share. Now we are selling camp cards [$5] where 1/2 goes to the scout into his account. The pack seems to think that if a scout sells 400 cards, that scout will get $1000 in his account for camp or to spend at the local scout store.
From what I see online, this is not what should be done. The pack leadership basically laughed me out of the room when I brought this up [not literally]. The local district leadership basically said “I have no idea what you are talking about” and said the pack could do whatever it wanted.
So am I just wrong? So confused.
NOTE: My boys have the biggest scout account balance in our pack so I am not a disgruntled parent of a scout/family that does not participate in the fundraising activities. I just want to do what is right.
March 23, 2016 at 3:30 pm #51354QGuest
Not wrong. Just a little crazy. If the troop treasurer doesn’t want to change, it won’t change. Waste your breath on the wisdom that they ask you for.
On the other hand, if your boys have earned enough per year (in addition to whatever else they make with jobs they do in the neighborhood, etc …), it could mean that they would have to file taxes … if the IRS cared about how much was not going into the treasury on account of this obfuscation.
If it still nags you, I would suggest this: instead of using your family’s portion for just your boys, ask it to be divided up by the number of boys going to camp and used to reduce their costs. That way, you’ll be more crazy than right, and every boy in your pack will grow up strong and good.
April 22, 2016 at 2:03 pm #52887Diane ZGuest
At a recent Roundtable, we were told that individual accounts are not allowed – has to do with the IRS & non-profit status. What a unit can do is give percentage discounts (trips, camping, registrations, etc) to individual scouts based on sales. Works out the same, but less problematic. That being said, lots of units ignore this and still do individual accounts
April 23, 2016 at 4:09 pm #52926PaulGuest
You bring up 2 very important topics; “Scout Accounts” and “raising a LOT of money”. We walk a very fine line when we “raise money” under the banner of a non-profit agency, so you guys need to proceed carefully.
“Raising a lot of money” is the easiest to answer – NO unit should ever raise more money than it needs to survive THAT CALENDAR YEAR. At the end of the year, there should be enough to re-charter and maybe a little more to carry the program until the next fund raiser, but the unit should not have any great surplus of cash, and $1000 for a Cub Scout is a tremendous amount of money. The “issue” with “carry over money” is that it is intended to be used for the boys WHO EARNED IT. If your Pack raises a lot of money when your son is a 2nd year WEBELOS, he should not “lose” the use of those funds because he bridged out at the end of the year, but the Pack wanted to keep a “rainy day fund”. HE earned it, HE should benefit from it, not the boys who are in the program NEXT year. In short… you have to be careful how you handle “non-profit” money.
“Scout Accounts” – We do use Scout Accounts in our pack & troop for exactly as you stated, it fairly rewards those who help with the fund raising. However, we emphasize and clarify that the SCOUT does NOT “own” the money. Any time a Scout unit raises money or buys equipment, it belongs to the CHARTER ORGANIZATION, not the Scout or the “pack” or “Troop”. If a Scout were to quit being a Scout, YOU MUST NEVER EVER EVER cut them a check or “pay out” their account. The money IS NOT THEIRS! The way we word it is that, “It is held in escrow by the Unit to “enrich his Scouting experience”, but if he is no longer a scout, that money is forfeit and goes back into the Troop/Pack/Crew’s general fund.”
The way we manage this is that the Treasurer holds the scout accounts in escrow. It is ALWAYS considered part of the unit “fund” and ALWAYS reported on each month during the Treasurer’s report during the Committee Meeting.
We “pay out” of Scout Accounts as REIMBURSEMENTS for any scouting-related activity, so he must produce a receipt for his new uniform shirt or new pocket knife. Only for camping trips would the Treasurer pay directly (not as cumbersome as a “reimbursement”). This way we are doing our “due diligence” to ensure that the money RAISED for Scouting is actually USED for Scouting. If he can find a way to tie an expense back to a scouting-related purpose, the Treasurer will approve reimbursement.
April 5, 2019 at 10:40 am #195474HeatherGuest
Is there documentation regarding the funds left over at the end of the year being limited to budgetary needs for the following year?
April 8, 2019 at 12:23 pm #195630QGuest
No. This is not hard-and-fast. But with a group that turns over members as quickly as a pack does, this is good rule of thumb.
Specific guidance on unit finances can be found here.
It’s a big country, and there aren’t one-size-fits-all rules. But you want common sense to prevail.
April 27, 2016 at 11:51 am #53037JecGuest
We keep 50% of the $5 camp card sales as a unit and give the boys 40% of that ($2 on every $5, with the Troop keeping 50cents which helps cover any credit card fees and builds up over time to buy/replace some troop equipment etc).
I actually think its awesome that your Pack is giving all the profits back to the Cubs to use for their Camps and supplies. If you are talking about one kid selling 400 cards, I assume you guys are already big fundraisers and that your popcorn sale is huge, so the Pack should be pretty covered for it’s needs for the year from that sale (like our Troop is).
We do have Scouts in our pack who use their Scout Accounts to help other Scouts pay their camp fees or get a new sleeping bag or whatever. Make sure your families who have an excess of money know they can do that if you will allow it.
Otherwise, so what if the kid raises $1000 in his Scout Account. He has to show valid scouting expenses, else eventually that money will go back into your Pack if he quits, or go on to help him fund his Boy Scout adventure (hello jamboree at $2,000 or more depending where you live).
He could take a break from fundraising, or not have to push himself as hard the next year, because he did so well earning $1000 this year. Be prepared for the Future!!
If he just goes around buying random junk at the Scout Shop, its up to whoever approves your Scout account transactions if those are valid needs of his. As long as this check is in place, I really see no reason why you would have a problem with a kid earning a lot off one fundraising and setting himself up to be able to pay for everything for the next, year, or two, or three.
December 14, 2016 at 1:45 pm #60173WebelosMomGuest
One thing not mentioned here is “individual benefit” which is why the idea of a large sum is important. The IRS limits “individual benefit” to 2% of the gross amount of fund raising/sales per scout. (if you sold $10,000 in popcorn and $5000 in cards then individual benefit limit per scout is $300) As long as the unit controls the funds, and as long as the funds are used for scouting purposes, then there is never a concern about personal benefit. So the $1000 in the cub scout’s scout account isn’t a concern unless he wants to use to pay for “random stuff”. Paul and Jec are correct that the money isn’t “their” money. If they crossover to a troop, depending on how a unit sets the policy, they can have the scout account balance transferred unit to unit but never in cash/check to a scout.
Not all purchases, even at the scout shop, are scout related so that’s where your pack finance person could set guidelines about what is and what is not a “scout-related” purchase to avoid confusion.
November 12, 2018 at 7:34 am #166567MarleneGuest
On October 30, 2014, the IRS announced inflation adjustments for more than 40 tax provisions, one of which is the insubstantial benefit limitations for contributions associated with charitable fundraising campaigns.
For the 2015 tax year, the adjustments in the value of insubstantial benefits that may be received by a donor in return for a contribution without causing the contribution to fail to be fully deductible are:
$10.50 (total of all low-cost gift items received by the donor)
$52.50 (minimum amount of the donor’s contribution)
$105 (fair market value of all the gifts received by the donor in connection with the contribution, or 2 percent, whichever is less)
January 29, 2019 at 10:16 am #184276AlexGuest
Let’s say you have a cub scout who has sold camp cards and accumulated $100 in a scout account (which only can be used for summer camp).
What happens should their family have to unexpectedly move, the scout transfers to a different unit (which would be under a different chartered organization)?
You have a Webelo 2 who for various reasons wants to cross over to a Boy scout troop under a different chartered organization?
Can the existing unit write a check to the new unit for the scout camp funds?
In the second case, you’re setting up a situation where there is ZERO motivation to fundraise.
September 11, 2019 at 9:08 pm #269954GuruGuest
This is a good thread… old, but good. I’m reading for the first time.
To your first question, I think Paul got it right when he said “charity funds” should be used the year (or very soon after) they are earned AND by the boys who did the work to earn it. That’s a good policy. That way you don’t have $1000 sitting around for 2-3 years and then have to figure out what is “allowed” when a boy quits or transfers.
Question 2 is the same. ALL money earned belongs to the Charter Org, so if a boy transfers to a different unit, you really don’t have the authority to “give” the CO’s money to another CO.
To keep everything “above board”, you should use the KISS method… KEEP IT SIMPLE, STUPID.
No payouts to anyone outside your CO. Sorry. Use the money soon after its earned, give the boys a great program that year, and if people want a great program NEXT year, then they should be motivated to participate in the next fund raiser.
September 26, 2019 at 8:29 am #279987ScouterGuest
Guru, do you have any sources for the statements you made about paying to another chartering organization? I am trying to say the same thing to my unit but I’m getting a ton of pushback and I’d love to be able to provide a solid source that outlines the rules….
September 29, 2019 at 8:48 pm #282389MiddletownscouterGuest
From the BSA Product Sales Guide (August 2014 Revision), page 9.
Individual Youth Accounts
A Scout is thrifty. Learning to manage money is one of the ways the Boy Scouts prepare youth for life. Budgeting and earning money to accomplish goals through an approved council or unit project helps Scouts develop self-reliance and the skills of personal finance management. Unit fundraising designed to make Scouting affordable is a fundamental part of Scouts “earning their way.” Product sale fundraising is an important asset to units and their members to help provide the resources required for Scouting to succeed.
Private benefit rules of the Internal Revenue Service prohibit those involved in nonprofit fundraising from receiving a substantial personal benefit for their efforts. Some practices where dollar for dollar credit is provided for the sole benefit of the person who sold product based upon amount sold could violate the private benefit prohibition. While the BSA has not endorsed “Individual Scout Accounts” for private benefit of individual Scouts who participate in fundraising because of the IRS rules, unit fundraising designed to make Scouting affordable is a fundamental part of Scouts “earning their way”.
Funds raised by the unit from product sales belong to the unit. They may not be transferred to the Scout or another unit, but may be re-assigned to units sponsored by the same chartered organization, such as when a Scout moves from Cub Scouts to Boy Scouts or Boy Scouts to Venturing. The unit committee is responsible for expenditures from unit funds for the benefit of the unit. Unit funds may be used to reduce the cost of participation, including the cost of attending camp or obtaining uniforms. They may be used to provide financial assistance or awards to individual Scouts based upon their level of participation generally or in specific activities benefiting the unit, chartered organization or community, attendance,advancement and/or need. Unit funds may be used to buy equipment for the unit or for any other legitimate need of the unit.
November 4, 2019 at 8:47 am #303976KevinGuest
It’s worth pointing out to anyone reading this, that from over 30 years in the program as a youth and adult, there’s a lot of fundraising rules out there that units completely ignore. And with the increasing fees to be registered I would expect this to only grow. The worst ones are the “parents groups” that sell fireworks year after year.
You can say a lot about breaking the rules, if one method that’s explicitly disallowed isn’t shut down you know the rules aren’t enforced on purpose. In one case the COR even supported breaking the rules.
The other item I saw that doesn’t hold up water is the idea of only raising what you need for that year. How do you afford a pinewood derby track under that idea? Even a really basic pinewood derby track can cost $1000. A unit with 20 kids, that’s $50 per family. A smart pack will build up an excess within the budget, they’ll save for a rainy day. This is the topic of Personal Management merit badge requirement #1.
A smart pack will have a budget looking several years out on major purchases and will save over time, raising the excess needed a little each year.
Even transferring money isn’t strictly followed. A unit near us folded a few years ago. The money was distributed with the Scouts to the units they moved to. Why would anyone have a problem with this? Our primary goal is to support the Scout, not punish them by giving the money to an organization that no longer sponsors a unit.
December 2, 2019 at 10:20 am #313872KarenGuest
I have a question pertaining to individual accounts. The troop in question is folding. None of the current boys are transferring to a new troop. There are a couple parents that are asking for the money from the boy’s individual account. I guess the CO has not yet taken the account from the treasurer. Is it LEGAL for the treasurer or leader to dispurse the money from individual accounts to the boys/parents regardless if they are transferring, or does it all need to go to the CO?
December 3, 2019 at 3:19 pm #314663MiddletownscouterGuest
Unless it is money that the family personally paid in being refunded, then no. If the balance of the account is from fundraising proceeds, it isn’t their money. It belongs to the unit, and therefore the CO.
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