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Moving away from ISA’s

fundraising scout accounts

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#1 CNYScouter

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Posted 29 September 2015 - 06:49 AM

I have read the topics about Fundraising for the Good of the Whole Troop and the BSA policy about this

 

At out COH last night I was talking with our Treasurer. He read the article in Scouting magazine about ISA’s and is concerned about how we conduct fundraising. The troop constantly has multiple fundraisers going, mostly of the “go sell this” type.

 

Our Treasurer wants to bring this up at the next committee meeting and knows there is going to be some upset parents.

 

So, how do you move away from ISA’s?

 

 We have scouts with accounts that have a balance that run anywhere from a negative (they owe money) to a couple of scouts who want to go to Jambo and have nearly $1000 in there account.

 

 We will have some pretty upset parents if after earning $1000 for Jambo and then finding out it was going into the troop general account for everybody.

 

What do you do with the current funds?

 

The other question was how do you distribute funds if you don’t have ISA’s?

 

We have scouts who work just about every fundraiser and others where the parents just write a check for everything.

 

I fully understand the idealist concept of if a Scout wants to go to Philmont or Jambo then everyone pitches in to help as this was the way we did it in my Troop as a youth but I don’t see this going over with many parents today

 

As just like moving from adult led to boy led it takes time to change a troop culture.

 

I can see how moving to a boy led troop can be done slowly over time but I don’t see how moving to not using ISA's can be done in steps.


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#2 Lurking...

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Posted 29 September 2015 - 08:02 AM

The money all goes into the general fund amidst the wailing and gnashing of teeth.  Then the Jambo/Philmont boys make application for support for their trip to the PLC.  If the PLC feels the boys have worked their butts off to justify assistance they can decide to help out from the troop's general fund.

 

 

If parents are all that concerned about THEIR money, they need to have the funds clarified.  This is the problem with ISA's people get the idea that the money they raise for the troop belongs to THEM.  IT DOESN'T IT BELONGS TO THE CHARTERING ORGANIZATION.  Once you clear that up, you will see the boys working on their fundraisers AND working on THEIR own funds in THEIR own bank accounts to raise money for THEIR trips.

 

This is why I don't use ISA's it create a questionable system that I personally don't think plays well with the THRIFTY scout law.


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#3 Krampus

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Posted 29 September 2015 - 08:39 AM

Another member posted a while back a way around the ISA issue but still remain complaint with the IRS guidelines.

 

In short, consult a tax attorney. We followed that member's advice and developed a method to do fund raising and still comply with IRS guidelines.


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#4 T2Eagle

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Posted 29 September 2015 - 08:53 AM

Here's the first sentence in the Scouting article: "Despite what you might’ve heard, the Boy Scouts of America’s rules do allow for individual Scout accounts."

 

Stosh's way can work, if you do it his way there will be winners and losers, some scouts who fundraise a lot may be subsidizing others who do not.  That's not a bad outcome, but it will leave some people disgruntled until they get used to the idea.

 

If you don't want to move entirely away from ISA's it is critically important that everyone understands going in that although you can decide to designate portions of a fundraiser be used for the scout who provided the efforts to raise the funds it is not that scout's money, they are not entitled to it.  The money is actually raised for and belongs to the Chartered Org and they have the ultimate say in how it's spent.

 

One of the things you may want to look at is whether you want to try to find a group fundraising activity or activities as alternatives to the "go sell this" fundraisers.  When primarily individual effort is what results in the funds it is difficult for folks to want to not have that individual effort rewarded.  We have one big fundraiser a year, we sell Christmas wreaths at our church.  Everyone is expected to help unless they are out of town that weekend, the bulk of the funds go into the general kitty.  We provide some small extra incentive for scouts who work more than the minimum expected.  No one has a problem with this being a general funds fundraiser, and because it is just a once a year effort we have a high participation rate.

 

We support the selling of popcorn and allow each individual scout's effort to be designated to his ISA, but we don't push hard for this as a group effort. Scouts who enjoy selling tend to sell quite a bit, many scouts don't sell any at all.


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#5 blw2

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Posted 29 September 2015 - 10:07 AM

admittedly, I'm new to this issue but I can see how this is a hot button

as a conservative, this has socialistic indoctrination written all over it....

 

ok, based solely on this thread

I get that the funds earned were on behalf of the CO.... they own it

but if Billy Scout earned that money under the guise that it was for the CO to send him to philmont or wherever..... then at some point in time Mr Marx the new scoutmaster wants to pool that money for the good of the troop.... 

to also help little Joey Scout who refused to do the work the whole time the fundraiser was going on

"Sorry Billy, we just don't have enough money to send you and Joey to Philmont this year.... you'll have to stay local."

Well that just ain't good.  It's just not right.... IMHO

 

On the other hand if little Scout Billy did the work knowing all along that it was to help the troop as a whole from the start, that's a different story altogether!


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#6 Krampus

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Posted 29 September 2015 - 10:26 AM

You can have fundraisers where Billy Scout sells stuff and the money is ear-marked for his trip to Philmont, as long as everyone who participated in the fund raiser sells an equal amount and has an equal share allocated to them. Those who don't sell don't get the money.

 

In our unit we require the guys participating in the fund raiser to sell an equal amount, that way the money can be allocated evenly to those who participated without running afoul of the tax man and without participating in income redistribution to those who did not participate.

 

It is a bit Marxian, but that's the world 51% of the 57% of eligible voters voted for. ;)


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#7 Fehler

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Posted 29 September 2015 - 10:56 AM

Little Billy can get a job outside of a Scouting Fundraiser and earn/save money for his own trip to Philmont.  Scouting Fundraisers should benefit the entire Troop.


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#8 Krampus

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Posted 29 September 2015 - 11:38 AM

Little Billy can get a job outside of a Scouting Fundraiser and earn/save money for his own trip to Philmont.  Scouting Fundraisers should benefit the entire Troop.

 

Is this opinion or policy?

 

Have you ever had scouts that refuse to sell anything yet reap the benefit of such efforts? We tried this a long time ago. We started with 90% participation. The kids got wise real quick that Billy and the 9% were playing PS4 at home while everyone else was out selling. Guess what? The next sale less than 20% of the kids sold anything. The year after that we had less than 8% sell anything. Actually lost money on the fund raiser.

 

When people expect that "free lunch" it is on the backs on someone. When the hard workers get ticked off they either leave your troop or want their fair share. The boys figured this out and put a stop to it right away; now we have the policy we have. Guess what? 90% participation again. You don't have to sell, but if you do you have to hit your quota.

 

That's a real world lesson right there. Work= keep your job. Don't work= get welfare.


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#9 T2Eagle

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Posted 29 September 2015 - 12:12 PM

Krampus,

 

Can you give an example how that works?  

 

Let's say you're selling candy bars.  Scout A is very good and/or lucky and/or has a parent who can take them to work to sell them. Scout B isn't a good salesperson, doesn't get lucky, and has a parent who is not allowed to sell at work.  Does scout A have to stop after he sells his quota?  Does Scout B have to buy any candy bars he doesn't manage to sell?


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#10 Krampus

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Posted 29 September 2015 - 12:22 PM

Krampus,

 

Can you give an example how that works?  

 

Let's say you're selling candy bars.  Scout A is very good and/or lucky and/or has a parent who can take them to work to sell them. Scout B isn't a good salesperson, doesn't get lucky, and has a parent who is not allowed to sell at work.  Does scout A have to stop after he sells his quota?  Does Scout B have to buy any candy bars he doesn't manage to sell?

 

I will preface this by saying that my cousin's unit did the leg work to work with an tax attorney and their council to make sure they were compliant all around.

 

Scout A, Scout B and Scout C are going to Philmont. Scouts A&B sell candy, Scout C does not. The quota is to sell $200 worth. Scout A sells $200, he can continue to sell if he wants to. Scout B sells $150. Since Scout B did not make the quota he has to make up the $50 by writing a check.

 

When the funds are applied to those going to Philmont, only Scout A and Scout B get assistance funding having participated in the fund raiser. Each gets an equal share. Scout C gets nothing.

 

As luck would have it we have never had a Scout C. The boys realize they need to step up and at least try to pull their weight. Who wants a Scout C on the trail on a two week trek? He's likely to want someone else to carry his pack for him.


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#11 blw2

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Posted 29 September 2015 - 12:25 PM

I was wondering the same thing.....

 

So lets say scout A keeps selling and reaches $275

what does he get for his efforts?


Edited by blw2, 29 September 2015 - 12:27 PM.

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#12 Krampus

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Posted 29 September 2015 - 01:19 PM

I was wondering the same thing.....

 

So lets say scout A keeps selling and reaches $275

what does he get for his efforts?

 

The satisfaction of helping his crew further. Bragging rights.

 

But at least he knows that the other guys are also forced to pull a minimum weight and not just lay around and do nothing.


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#13 Lurking...

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Posted 29 September 2015 - 01:49 PM

Come summer the boys all pay $50 out of their pocket for camp.  The troop pays the rest.  If the troop can't pay the rest, the boys have to pay more.  Boys that can't afford the initial $50 can go out and earn it on their own, or they can stay home.  It's a choice they all have to make on their own.

 

One must also remember that if one is using the patrol method, one can raise money with individual patrol accounts and each patrol works at getting all their buddies to the activity.  That process means the IRS can't touch it.  There's nothing in our troop that says that the new stove that the Panthers bought can't have the name Panthers written in big letters on it before it goes into the storage area.  Same for any other patrol equipment funded by the fundraising efforts of the patrol.


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#14 Rick_in_CA

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Posted 29 September 2015 - 02:00 PM

You can have fundraisers where Billy Scout sells stuff and the money is ear-marked for his trip to Philmont, as long as everyone who participated in the fund raiser sells an equal amount and has an equal share allocated to them. Those who don't sell don't get the money.

 

In our unit we require the guys participating in the fund raiser to sell an equal amount, that way the money can be allocated evenly to those who participated without running afoul of the tax man and without participating in income redistribution to those who did not participate.

 

It is a bit Marxian, but that's the world 51% of the 57% of eligible voters voted for. ;)

My understanding is that what you describe wouldn't pass the tax test. If money is allocated based on participation in the fund raiser, you are in trouble. As it was described to me (by an IRS agent), you have to have a process for allocating funds that MUST allow a scout that didn't participate in the fund raiser the possibility too receive funds to avoid the IRS issues. He said if you have a "no fundraising no funds rule", you will automatically fail.


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#15 Krampus

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Posted 29 September 2015 - 02:19 PM

My understanding is that what you describe wouldn't pass the tax test. If money is allocated based on participation in the fund raiser, you are in trouble. As it was described to me (by an IRS agent), you have to have a process for allocating funds that MUST allow a scout that didn't participate in the fund raiser the possibility too receive funds to avoid the IRS issues. He said if you have a "no fundraising no funds rule", you will automatically fail.

 

Oddly enough my cousin's unit had tax attorney, who is a former IRS agent, approve the approach they took. We copied it.

 

As I understand the IRS rule (as told to me by this ex IRS attorny) it has to do with what constitutes private benefit and the potential existence of any inurement. Any inurement happens when the distribution of income benefits private individuals. Here's the rub, "private individuals" is defined as "having a personal and private interest in the activities of the organization."

 

There is no definition or guidance as to how this relates to members of the same organization, some of whom participate in the generation of the income and some who don't. Nor is their guidance as to whether everyone MUST get a share of the income or not. Nor is there guidance whether -- for the purposes of Boy Scout units -- does that mean adults (who are also members) get an equal share as youth members? Nor does it address how council popcorn sales that give private benefits to scouts who sell more than others a prize, and not everyone getting a prize.

 

Like I said, this is for a tax attorney to weigh in on. I have read the threads on this issue before and it's just a bunch of laymen giving their own advice. Our unit went to a pro, got his advice and ran it past council. Done. Approved.

 

I would encourage other units to do the same and not take advice from the likes of us. ;)


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#16 Rick_in_CA

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Posted 29 September 2015 - 02:32 PM

Oddly enough my cousin's unit had tax attorney, who is a former IRS agent, approve the approach they took. We copied it.

I'm thinking that this is one of those "ask three experts and get three answers" kind of thing. My IRS agent friend's advice was to simply stay away from anything like ISAs, but I know others have gotten different answers.
 

Nor does it address how council popcorn sales that give private benefits to scouts who sell more than others a prize, and not everyone getting a prize.


My understanding is this comes under a "the cost of fundraising" and is reported to the IRS that way (it's like paying your fundraisers).

 

I would encourage other units to do the same and not take advice from the likes of us. ;)

I agree with this.


Edited by Rick_in_CA, 29 September 2015 - 02:37 PM.

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#17 desertrat77

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Posted 29 September 2015 - 02:36 PM

As a scout, I wanted to go to Philmont.   I mowed lawns and sold newspapers in front of the commissary on base.   My earnings went into a tin can in the kitchen.   When it was time to pay up, I gave the SM what was in the tin can.   I was still a bit short, but my parents paid the difference (bless them).

 

The troop treasurer should not have to be a part-time CPA.  


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#18 Lurking...

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Posted 29 September 2015 - 02:51 PM

As a scout, I wanted to go to Philmont.   I mowed lawns and sold newspapers in front of the commissary on base.   My earnings went into a tin can in the kitchen.   When it was time to pay up, I gave the SM what was in the tin can.   I was still a bit short, but my parents paid the difference (bless them).

 

The troop treasurer should not have to be a part-time CPA.  

 

That's how I got through scouts as a youth.


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#19 Krampus

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Posted 29 September 2015 - 04:00 PM

The troop treasurer should not have to be a part-time CPA.  

 

Nor should a home-owner or head of household. ;) But that's our government for you.

 

I wonder how many kids' parents are claiming those popcorn prizes -- especially those gift cards -- given by council as untaxed income. ;)


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#20 desertrat77

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Posted 29 September 2015 - 04:10 PM

Nor should a home-owner or head of household. ;) But that's our government for you.

 

I wonder how many kids' parents are claiming those popcorn prizes -- especially those gift cards -- given by council as untaxed income. ;)

I concur!


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