A Scout is Thrifty
The Scout Law encourages Scouts to use money and resources carefully. Likewise, strong financial management helps units remain prepared and financially stable.
A well-managed unit should raise enough money to support its annual program. However, it should not collect funds without a clear purpose. Instead, units should create a budget, set fundraising goals, and use their money to benefit Scouts.
Council Fundraisers
How Much Money Does Your Unit Need?
Create an Annual Budget
Every unit needs a budget that explains how it will receive and spend money. Most importantly, the budget should support the activities in the unit’s annual program.
First, review your plans for the coming year. Consider where your unit will travel, which activities it will attend, and what equipment it will need.
Next, estimate the cost of each activity and expense. Then, decide how the unit will raise enough money to cover those costs.
Existing units can review receipts and financial records from previous years. These records provide a helpful starting point for estimating future expenses.
New units can use Scouting America’s budget-planning worksheet. In addition, leaders can request guidance from their unit commissioner or district executive.
Finally, include council fundraising programs in your financial plan. These programs offer units an organized and effective way to support their annual activities.
Common Unit Expenses
Most Scout units should plan for the following expenses:
- Scouting America registration fees
- Unit liability insurance fees
- Unit accident insurance
- Advancement awards and recognition items
- Activities, trips, and camps
- Program materials and camping equipment
- Ceremonial supplies
- Contingency funds
- Financial assistance for Scouts
Help Scouts Pay Their Way
Scouting teaches young people to set goals, work together, and practice self-reliance. Therefore, fundraising offers an important part of the Scouting experience.
Some families may prefer to pay the full annual cost at the beginning of the year. However, relying only on family payments can remove an opportunity for Scouts to develop responsibility.
Instead, units can set shared fundraising goals that support the entire program. As a result, Scouts learn the value of planning, teamwork, and earning their way.
How Will Your Unit Pay for Its Program?
Council Fundraising Programs
Green Mountain Council coordinates several fundraising opportunities throughout the year.
For example, units can participate in the spring Popcorn and Nuts sale. In addition, units can raise money by selling Vermont maple syrup.
These council programs provide organized fundraising tools, sales support, and products that families recognize.
Other Unit Fundraisers
Units may also organize other approved fundraising activities. However, Scouting America requires units to review and approve those activities before raising money.
First, complete the Unit Money-Earning Application. Then, submit it to your district fundraising chair or district executive.
This review helps ensure that your fundraiser follows Scouting America policies and represents Scouting appropriately.
How Should Your Unit Manage Its Money?
Your unit committee should place all unit funds in an approved checking account. The account should require two authorized signers, usually the treasurer and another committee member.
In addition, the treasurer should maintain accurate records of all income and expenses. Regular financial reports also help the committee understand the unit’s financial position.
Chartered Organization Units
First, contact your chartered organization before opening or changing a bank account. Ask whether the unit may use the organization’s Employer Identification Number.
The chartered organization should also identify the person who will accept responsibility for the account.
Alternatively, Green Mountain Council allows eligible units to place their funds in custodial accounts at the Fickett Center. Contact the council for additional information before choosing this option.
Council-Registered Units
Council-registered units should contact Green Mountain Council before opening a bank account. The council will provide instructions about its Employer Identification Number and the account’s responsible party.
In addition, council-registered units should close any separate accounts that they previously maintained through a chartered organization. They must then follow current council policies when establishing a new account.
Council-registered units should not use custodial accounts.
Scout Accounts and Individual Benefits
Understand the IRS Group-Benefit Rules
The Internal Revenue Service requires nonprofit fundraising to benefit the organization or group. Therefore, units must use fundraising proceeds to support the unit’s Scouting program.
For example, suppose one Scout sells $500 in popcorn while another sells $100. The unit cannot automatically reserve each Scout’s full sales proceeds for that Scout’s personal use.
Instead, the unit should use the money in a way that benefits the group. It might purchase tents that every Scout can use or reduce camp costs for all participating members.
These shared benefits allow fundraising to support the unit’s charitable and educational purpose.
Use Scout Accounts Carefully
Some units use internal Scout accounts to track money associated with individual members. Historically, units used these records to track fundraising, allowances, or money that Scouts earned through other work.
Scouting America allows units to maintain these records when they follow IRS requirements. However, units must avoid creating a substantial private benefit for individual Scouts.
Therefore, leaders should use Scout accounts to teach thrift, goal-setting, and financial responsibility. They should not treat them as personal bank accounts that Scouts control.
Unit leaders should also review current council guidance before creating or changing a Scout-account system.
Avoid Substantial Private Benefits
In a 2014 interview with Scouting magazine, Scouting America representative Steve McGowan explained the difference between group benefits and individual benefits.
“An example would be if a Scout is part of a unit, and the unit raises money to offset the costs of Scouting for the entire unit. Nothing wrong with that. If they use it as a means to pay down the cost for the unit and each member to go to summer camp, nothing wrong with that.
On the other hand, when you move over to the other side, and a Scout goes out and sells a lot of popcorn, and the unit designates that money that he raises to be used only for that Scout and only for activities that benefit that Scout, we get into an issue of whether or not the IRS would consider that to be a substantial private benefit.
The IRS isn’t going to go after the typical young Cub Scout that’s selling popcorn, and it helps to pay for his uniforms or helps to pay for his summer camp. But to the extent we have people that are raising significant funds, and those funds are being used for costs that would normally be parental obligations in connection with Scouting, we’re getting into an area where the IRS has been and is paying more attention.”
Summary
Fundraising that reduces costs for the entire unit generally supports the group’s Scouting program. For example, a unit might use fundraising proceeds to reduce summer camp costs for every participating Scout.
However, a unit may create an individual-benefit concern when it reserves money exclusively for the Scout who raised it. Large amounts that cover expenses normally paid by parents may attract additional scrutiny.
Therefore, units should connect fundraising proceeds to Scouting goals and shared program expenses. This approach teaches Scouts to work toward goals while protecting the unit’s nonprofit purpose.
