The scouts percentage of popcorn /fundraising sales

[Scoutfish]

"Yeah, me neither. I think I know what I want to say, but am having trouble putting it into words.

 

Boomer, welcome to the club. I am not just a member, but I am also the president of "Wayward Words Club for Men" .

[Beavah]

Yah, people are mixin' up concepts tryin' desperately to justify a practice that IMHO can't easily be justified.

 

Trails End is a for-profit entity. As such, it doesn't have to worry about da rules for exempt organizations. So no problem with sales incentives. Those things are mostly one-shot and de minimis as described, so they're not a particular issue in terms of individual income reportin' for a youth, falling well below the youth exemption anyways.

 

I can't speak to what any particular council is doin' in terms of sales incentives, but I expect none of 'em are giving individual boys a "cut" of what they sold. Instead they're givin' out some incidental gifts, perhaps direct from local for-profit entities that aren't taking a deduction for the gift. Such a setup would be allowed, of course. Da local business would account it an advertising expense, and probably get a pretty good return on it. Heck, a District Chair could just buy the prizes out of pocket and give 'em to boys. That can be a solution for units that want to give out some incentive, eh? The SM or CC just does it personally out of pocket (with no deduction and no reimbursement from the troop).

 

There's nothing at all wrong with a unit purchasing group gear for use for its exempt purpose. Tents, stoves, packs to be loaned out to any boy that needs one, etc. All of that is just fine. Just like a school purchasing computers that any boy can use. But if the school only allows boys whose dads gave $2,000 to the fundraiser to have access to the school computers, I think we'd all recognize that would be wrong. No difference with only allowing a boy who raised a certain amount to have access to the troop's packs.

 

Again, I'm not sure why folks feel it's necessary to try to justify a practice that is so fundamentally... slimy. If yeh want your boys to learn responsibility by working for money, encourage or require them to go get a job. Mow lawns, rake leaves, deliver newspapers, flip burgers. Don't have 'em beg for personal handouts using Scouting's good name.

 

Da memo from national does an OK job of analyzin' da law, IMHO. Only OK though . They do raise an issue I hadn't considered, and that's da exposure of the local council corporations when units do this, dependin' on how popcorn and other sales monies are handled. That's a big deal, because at that level, the amounts are no longer immaterial and they become a much more reasonable enforcement target than individual units.

 

Beavah

(This message has been edited by Beavah)

[83Eagle]

Nobody wants to run afoul of either the law or ethics, I would hope. At the same time we want to take full advantage of opportunities for boys. This includes rewarding boys that go above and beyond.

 

I am not using other examples, like the cash cards from trails end, to justify the practice of scout account incentives. I am using them as examples to show how this practice is, in my mind, fundamentally the same.

 

I just discussed this with my wife who is heavily involved in girl scouts. When girls sell cookies they get incentives from whatever company bakes the cookies (there are two I believe). In addition the council also awards "cookie dough" that girls can use for a multitude of expenses. And the council is a nonprofit.

 

Now, they might be doing it "wrong" too, but they are certainly doing it similarly to BSA councils and units.

 

I simply do not see the difference on either a legal or moral level and I have a clear conscience about our unit's scout account program.

[Beavah]

I simply do not see the difference on either a legal or moral level and I have a clear conscience about our unit's scout account program.

 

I would think that in order to have a clear conscience yeh would notify your Chartered Organization of the potential problem, share da documents you have been provided here, and ask them to have their legal counsel give yeh a formal legal opinion on the matter, both in terms of tax law and in terms of da statutes on fundraising fraud in your state.

 

A Scout is Trustworthy, Loyal, and all that stuff. It's your CO that you're representing (and putting at risk) after all. And if yeh truly believe there's no issue, then yeh shouldn't be at all reluctant to confirm that.

 

Beavah

 

[BadenP]

As a former IRS investigator I can tell you that unless you are talking tens of or hundreds of thousands of dollars the IRS is not going to bother you. The last thing the agency wants is to prosecute a boy scout troop. With recent federal budget cuts the IRS staffing has been cut way back and they need to concentrate on the big guys.

 

If you are committing tax fraud with chicken dinners and popcorn sales you have to sell a heck of a lot of product before attracting any attention. Beav is right as far as seperate bank accounts for the boys. All your unit money should be kept in a unit account, and a ledger keeping track with the boys individual credits.

[83Eagle]

I would think that in order to have a clear conscience yeh would notify your Chartered Organization of the potential problem, share da documents you have been provided here, and ask them to have their legal counsel give yeh a formal legal opinion on the matter, both in terms of tax law and in terms of da statutes on fundraising fraud in your state.

 

I discussed it with our COR. She didn't see what the big deal was particularly since it's not a cash account, we don't pay the boy, etc. So yeah, I'm sleeping pretty well when it comes to ISAs.

[5yearscouter]

Baden,

You say we shouldn't keep separate bank accounts for the boys,I'm pretty sure none of the units have separate bank accounts for the boys.

Most are keeping track in a ledger of credits for the boys.

 

Interesting to me, is to note that the units with scout accounts are primarily using the scout account credits to cover the boy's uniforms, registration/boy's life annual recharter and camp fees from the unit directly to a council.

 

Primarily the boys who work the fundraisers the hardest are those who cannot afford to pay for those items.The fundraisers were created to allow those boys to raise money for those things, since their parents cannot afford to pay for them.

 

So we should take into account that the fundraisers are already skewed to help cover those who cannot afford scouting, so they are similar to a need based award like any other campership. If BSA councils can give camperships to benefit only one individual scout based on need(or request, sometimes they are seemingly a rubber stamp approval if you fill out the form you get the $)it seems the unit can do that as well. Not that all units must give equal amounts to each boy--everyone gets $100 off on scout camp this year because George Scout sold $10k in popcorn?

 

So that is one criteria that is not based on how much you sell of something. The boys must be active in order to sell popcorn etc, and to have a scout account within the unit, so that's another criteria that is not based on how much you sell.

 

So the sticking point is whether 10% to the boy or 35% of profit on their particular sales amount is payment to an individual. If a unit were to state instead--if you sell between X and Y dollars you will receive an incentive of Z credit toward scout account costs, how is that actually any different? But it then is just an incentive for selling more popcorn, like any other marshmellow shooter, or amazon gift card for $100.

 

[Beavah]

Yah, let me try that again:

 

I would think that in order to have a clear conscience yeh would notify your Chartered Organization of the potential problem, share da documents you have been provided here, and ask them to have their legal counsel give yeh a formal legal opinion on the matter, both in terms of tax law and in terms of da statutes on fundraising fraud in your state.

 

In this case, I would think it appropriate notify the IH or da Chartered Organization's business manager type. CORs are scouting liaisons, and often don't have da savvy to deal with this stuff.

 

Like BadenP says, da likelihood is that yeh can fly under the radar, unless yeh happen to be in a town where someone has a burr in his saddle about the Boy Scouts for other reasons, or your CO gets audited for other reasons. Or someone in da press gets wind of da issue, I suppose. I'm just not sure why anybody would, in light of our mission and values.

[boomerscout]

I was hoping usscouts.org would have a definitive answer on this

 

Q.What is the official position on a troop contributing part of its fundraising dollars to each boy's Individual Scout Account? We are trying to discuss it at Scouter.com, but are starting to go in circles.

Many say it's no big deal, a minority says such accounts are not allowed, several say OK if used just for camp fees, uniforms, and yearly registration.

I first tried Scouting.org, but found that to be a tad difficult to navigate.

 

A. As a Scouting volunteer myself, and a former Scoutmaster, I'd say the simplest way to handle this is to stop calling the Scouts' accounts "accounts" -- All funds go into the troop's bank account, and a simple recording book can show how much each Scout is credited with for Scouting purposes (meaning: The Scout himself is never given any actual money; the amount he's credited with can help underwrite summer camp fees, Camporee fees, canoe rentals when the troop takes a canoe trip, and others along these lines, etc. I'd personally stay away from using the credits to purchase individual gear, uniforms, or equipment for any Scout, since that's the virtual equivalent of giving him cash). But that's me. Maybe what you want to do is ask your council's chief financial officer. Every council has one, and they're there to help folks like you!

 

So, it seems what we really need is a Federal or state government attorney well versed in nonprofit law before our troop is dissolved underneath our feet.

I don't have time to pursue this further. I will go by what I've already posted

 

 

 

 

[scoutmom0618]

Not that anyone cares...lol but when I began the research for our Pack I spoke with Justin Lowe of the IRS nonporfit division about this..(He is one of the tope people there) anyway his comment was that this is wrong for all the reasons listed. he did comment that you could probably fly under the radar and never get caught but....the other thing that I have heard from other nonprofits around here and as well as from Mr. Lowe...with the economy in the shape it is in, they look for all avenues for revenue...Nonprofits don't pay taxes...there are many nonprofits getting audited because if you can catch a nonprofit making a mistake albeit small you can make them pay...Just saying...

 

 

[Scoutfish]

Let me be clear on something...we don't have an actual account for each scout. WE just have our general account, but have it broken down as to what it is, where it came from, where it is going and we have a record of what each scout has in his "account"

 

For example: If 12 people are going to camp, and 3 are going to use money in their scout account, we would collect money from 9 people, and then cut a check to council that covers 12 people. The the treasurer would look in her records, and deduct the camp fee from the 3 scouts scout accounts.

 

We do not actually have seperate accounts for the scout that we transfer or depost money into.

 

Think of you own bank account at home. When I get paid by direct deposit, It all goes into my wife and my joint account. But in our hear, we can say this amount goes for car insurance, this amount is needed for the power bill, this amount is paying the cabl;er bill, this amount will be used for groceries.

 

So, in a way, we have seperate accounts for all our expenses, but all the money is still in one physical account.

[Beavah]

 

We do not actually have seperate accounts for the scout that we transfer or depost money into.

 

Which matters not a lick.

 

A college or university has just one set of funds deposited in various banks, and then keeps track of "individual accounts" for students on its own internal books. Do yeh think for a moment that da funds in such individual accounts don't "inure to the benefit of" the individual, even though they're being used for educational purposes?

 

B

[83Eagle]

Sounds like we should start calling this Kamp Kash and give the boys a card or certificate. Sell $1000 in popcorn Billy? Here's your disc shooter, your walmart gift card from trails end, and a Kamp Kash certificate from the unit as a reward. The certificate has no cash value, can't be transferred, and expires when you leave the unit.

 

Easy peasy and just like the GSUSA Cookie Dough program.

[boomerscout]

Although well meant, the Girl Scout cookie dough thing is probably illegal. Something they could get away with in good times

[Scoutfish]

Yeah, I was just saying because somebody mentiuond leaving it in one account only.

 

But In will say I have a clean and clear conscience about how we do it. I am not trying to wildly justify or cling to reasons to justify what we do. Wether the unit buys the stuff and loans it only to members who pay dues, or the unit purchases the exact same equipment for the perosons use in the exact same mannet. time and place is all the same to me.

 

As far as that goes, anybody who joins scouting is enjoying a personal gain by the way of adventure, camping, games, fun, and learning. Not muchj different than going to Disney land if you ask me...either way you pay for the use of equipment that you don't keep after the event. You pay Disney in cash, you pay the unit in sweat.

 

Both ways you trade something you have for the use of something they have ..and you do it for personal pleasure and experience...which is a gain.

 

As far as what the IRS says is right or wrong...well,. tell me you agree with the death tax and that a wife is subject to an inheiratance tax on her own house and car.

 

While what the IRS says may be leagal...it has no connection to or relavance with automatically being right and just.

 

I am totally cool with having your own and a different opinion. Same arguement couldm be over wether Ribeye or T-Bone is a better cut of steak.

 

But it is your opinion. And just because mine isn't the same as yours, I can very easily say that I am not desprately trying to justify not am I cloudy in my conscience over it.

 

 

 

 

Now......who wants to buy some popcorn? It's REEEEEAAALLLLY GOOOOOOOD!