Alternative to Individual Scout Accounts

[dedkad]

So I was following the various threads on the IRS stance on ISA's, and was wondering about the possibility of having some kind of a point system to earn "awards" for selling "x" amount of items or working "x" amount of hours at a fundraiser. Our Council has offered gift card incentives for selling popcorn, and the Girl Scouts offer incentives for selling cookies, like even an iPad, and that seems to have passed muster so far. As an example, the point incentive system would work as follows: The boys sell an item where the net profit is $4 per item. They earn 2 points for every item sold, and when they reach 50 points, they can choose from a reward such as a $50 camp credit or $50 dues credit. Their reward would equal half of what they netted, and the other half would go to the troop as a whole. A similar point system could be applied for number of hours worked at a fundraiser.

[qwazse]

Now you're starting to sound like a credit card company. The closer you get to a a commission per sale, the more it looks like taxable income. How bout this incentive: the more you sell, the more you help pay a buddy's dues?

[Stosh]

I am willing to go so far as to promote IPA's. Individual Patrol Accounts. Let the boys compete, in hours maybe, and get their patrol accounts up and then they can buy the nicer equipment for the patrol, make sure their members get to camp, make a donation to the NSP, etc. That way their team efforts can be recognized as a whole.

 

Stosh

 

[koolaidman]

Spitballin' here: How about a decision equity arrangement where as the higher sellers get more of a say where to go summer camp.

 

Make 5% of sales, get 5% vote where to go to summer camp in 2 years.

[Stosh]

Spitballin' here: How about a decision equity arrangement where as the higher sellers get more of a say where to go summer camp.

 

Make 5% of sales, get 5% vote where to go to summer camp in 2 years.

Gotta be a bit careful with that idea. My boys decide by patrol what camp they attend regardless of any connection to finances. If they raised money to get to a camp a long ways away, they should, by patrol get a bit more of the pie. I don't see having a troop competition that dictates against the autonomy of a patrol using the patrol-method.

 

However, such incentive to allocate by patrol members to the patrol fund would be okay with me. I.e. patrol raised 75% of the funds and the other patrol 25%. Then if half the money is allocated to individual patrol accounts, 75% goes to patrol 1 and 25% to patrol 2. That's fair in my book. That way if patrol 1 is planning on a Philmont trip and they get out and bust their buns to get there, the "reward" is in the % of profits of the fundraiser.

 

Stosh

[AKdenldr]

One troop I was associated with paid a portion of summer camp for each scout that met the fundraising individual fundraising goal set by the committee at budget time. This was for the troop scheduled camp only in that year. All was said upfront at popcorn time. Anything over that goal earned council prizes and prizes from the popcorn kernal and pats on the back.

[Pack18Alex]

We're doing gifts/prizes for camp cards on an individual scout basis. If the family hits a certain volume, they go to Cuboree for free. Next fall, we're going to do something similar with Camp Cards and registration fees for major camp outs. Our Pack Campouts are cheap, our District/Council events have registration fee and cost more, so we're going to try to use Popcorn to cover it.

 

I think that allocating the money towards patrols should create zero issue with the IRS, it's NOT a private benefit, and the fundraiser is okay for the Troop, I don't see why they can't allocate budget towards patrols.

 

The real issue is BSA policies, the IRS wording wasn't that stringent. You can't do things primarily for the individual.

 

I'd LOVE the BSA to ask, via a Tax Lawyer,

If the fundraising budget is allocated towards:

49% to cover a Scout's individual costs of participation, and 51% to troop operations, patrol and troop), is that substantially for private benefit or substantially towards group benefit.

 

Actually taking the money into virtual accounts is probably problematic. A prize of "free dues" or other things, credited toward the Scout's "customer account" shouldn't be the same issue. The problem is pretending the money belongs to the Scouts, it doesn't, it belongs to the Troop.

 

Simply having benefits kick in at different dollar levels (instead of a percentage) is probably helpful.

 

Free Re-chartering

Free Dues

Free Merit Badge College

Free Camporee

Free Week of Camp

 

etc. are all prizes not dissimilar from Girl Scout Cookie prizes.

 

If you do a flat "commission" you run into private benefit. Scouts re-chartering is a benefit to the Troop (JTE Retention Goals). Scouts attending Merit Badge College, Camporee, Summer Camp, etc., are all retention tools.

 

Patrol Tents/Kitchens are Troop benefits.

Personal book, uniform, backpack, etc., are all personal benefits.

[qwazse]

We're doing gifts/prizes for camp cards on an individual scout basis. If the family hits a certain volume, they go to Cuboree for free. Next fall, we're going to do something similar with Camp Cards and registration fees for major camp outs. Our Pack Campouts are cheap, our District/Council events have registration fee and cost more, so we're going to try to use Popcorn to cover it.

 

I think that allocating the money towards patrols should create zero issue with the IRS, it's NOT a private benefit, and the fundraiser is okay for the Troop, I don't see why they can't allocate budget towards patrols.

 

The real issue is BSA policies, the IRS wording wasn't that stringent. You can't do things primarily for the individual.

 

I'd LOVE the BSA to ask, via a Tax Lawyer,

If the fundraising budget is allocated towards:

49% to cover a Scout's individual costs of participation, and 51% to troop operations, patrol and troop), is that substantially for private benefit or substantially towards group benefit.

 

Actually taking the money into virtual accounts is probably problematic. A prize of "free dues" or other things, credited toward the Scout's "customer account" shouldn't be the same issue. The problem is pretending the money belongs to the Scouts, it doesn't, it belongs to the Troop.

 

Simply having benefits kick in at different dollar levels (instead of a percentage) is probably helpful.

 

Free Re-chartering

Free Dues

Free Merit Badge College

Free Camporee

Free Week of Camp

 

etc. are all prizes not dissimilar from Girl Scout Cookie prizes.

 

If you do a flat "commission" you run into private benefit. Scouts re-chartering is a benefit to the Troop (JTE Retention Goals). Scouts attending Merit Badge College, Camporee, Summer Camp, etc., are all retention tools.

 

Patrol Tents/Kitchens are Troop benefits.

Personal book, uniform, backpack, etc., are all personal benefits.

What if uniforms, backpacks, etc ... are purchased with ISA's with the understanding that they will be handed down to future scouts? One could argue that all uniforming does is make the troop look sharp and make it easier for unit leader to ID his kids. Troop benefit all the way.

[boomerscout]

We're doing gifts/prizes for camp cards on an individual scout basis. If the family hits a certain volume, they go to Cuboree for free. Next fall, we're going to do something similar with Camp Cards and registration fees for major camp outs. Our Pack Campouts are cheap, our District/Council events have registration fee and cost more, so we're going to try to use Popcorn to cover it.

 

I think that allocating the money towards patrols should create zero issue with the IRS, it's NOT a private benefit, and the fundraiser is okay for the Troop, I don't see why they can't allocate budget towards patrols.

 

The real issue is BSA policies, the IRS wording wasn't that stringent. You can't do things primarily for the individual.

 

I'd LOVE the BSA to ask, via a Tax Lawyer,

If the fundraising budget is allocated towards:

49% to cover a Scout's individual costs of participation, and 51% to troop operations, patrol and troop), is that substantially for private benefit or substantially towards group benefit.

 

Actually taking the money into virtual accounts is probably problematic. A prize of "free dues" or other things, credited toward the Scout's "customer account" shouldn't be the same issue. The problem is pretending the money belongs to the Scouts, it doesn't, it belongs to the Troop.

 

Simply having benefits kick in at different dollar levels (instead of a percentage) is probably helpful.

 

Free Re-chartering

Free Dues

Free Merit Badge College

Free Camporee

Free Week of Camp

 

etc. are all prizes not dissimilar from Girl Scout Cookie prizes.

 

If you do a flat "commission" you run into private benefit. Scouts re-chartering is a benefit to the Troop (JTE Retention Goals). Scouts attending Merit Badge College, Camporee, Summer Camp, etc., are all retention tools.

 

Patrol Tents/Kitchens are Troop benefits.

Personal book, uniform, backpack, etc., are all personal benefits.

if uniforms and gear are going to be handed down to future Scouts, then why not just have the troop buy everything by keeping all the money?

[boomerscout]

Individual Patrol Accounts -- I like it!

[Stosh]

Individual Patrol Accounts -- I like it!

Yeah, it's kinda like the patrol-method's financing. If the patrol-method promotes the small group dynamics, why shouldn't they have their own "treasury".

 

Stosh

[Pack18Alex]

We're doing gifts/prizes for camp cards on an individual scout basis. If the family hits a certain volume, they go to Cuboree for free. Next fall, we're going to do something similar with Camp Cards and registration fees for major camp outs. Our Pack Campouts are cheap, our District/Council events have registration fee and cost more, so we're going to try to use Popcorn to cover it.

 

I think that allocating the money towards patrols should create zero issue with the IRS, it's NOT a private benefit, and the fundraiser is okay for the Troop, I don't see why they can't allocate budget towards patrols.

 

The real issue is BSA policies, the IRS wording wasn't that stringent. You can't do things primarily for the individual.

 

I'd LOVE the BSA to ask, via a Tax Lawyer,

If the fundraising budget is allocated towards:

49% to cover a Scout's individual costs of participation, and 51% to troop operations, patrol and troop), is that substantially for private benefit or substantially towards group benefit.

 

Actually taking the money into virtual accounts is probably problematic. A prize of "free dues" or other things, credited toward the Scout's "customer account" shouldn't be the same issue. The problem is pretending the money belongs to the Scouts, it doesn't, it belongs to the Troop.

 

Simply having benefits kick in at different dollar levels (instead of a percentage) is probably helpful.

 

Free Re-chartering

Free Dues

Free Merit Badge College

Free Camporee

Free Week of Camp

 

etc. are all prizes not dissimilar from Girl Scout Cookie prizes.

 

If you do a flat "commission" you run into private benefit. Scouts re-chartering is a benefit to the Troop (JTE Retention Goals). Scouts attending Merit Badge College, Camporee, Summer Camp, etc., are all retention tools.

 

Patrol Tents/Kitchens are Troop benefits.

Personal book, uniform, backpack, etc., are all personal benefits.

Uniforms probably are safer, as Boy Scout Uniforms are specifically listed by the IRS as a deductible uniform clothing since it has no purpose outside of Scouting (this is for volunteers). A backpack that is used by the Scout can be used outside of Scouting and would seem like a personal benefit.

 

Now, if you wanted to outfit all Scouts with matching Backpacks with BSA logos, etc., and fundraised for it, you're likely in the clean, since the Backpacks belong to the Troop and are loaned out to the Scout.

 

The main issue is the ISA, not even the private benefit. Money raised under the 501©3 must be primarily for the purpose of Scouting. If you are directing 50%-100% of the money into an account that the Scout can use, at their discretion, for personal costs, then you are likely to have the issue of the money being substantially used for private benefit.

 

Ownership matters. If the Patrol/Troop buys backpacks and assigns them to the boys, it's a Scouting benefit. If the Boy buys the backpack via the ISA and owns the backpack, it's a private benefit. "Handed down" implies ownership change.

 

The question is substantially private, or substantially Scouting. I think that prizes are chosen by the troop to encourage participation and are probably safe (Popcorn Prizes and Girl Scout Cookie Prizes work this way), but I'm not a tax lawyer. ISA's that can be used at the Scout's discretion (dues, or gear, or whatever) are going to be substantially private benefit.

[Pack18Alex]

Individual Patrol Accounts -- I like it!

I don't see any reason why you couldn't direct 20% to the Troop General Operating Budget, and 80% to the Patrol Account (you could even have literal bank accounts for the Patrols, there aren't that many). Let the Patrol be responsible for collecting dues/event fees, and let the patrol decide if they want to fundraise to cover, or if they want to pay.

 

Has the side effect that patrols may organize around socio-economic factors, but such is life.

[Stosh]

New troop. 7 Webelos cross-over boys. 4 heading out to summer camp for the first time. Each boy paid $50 out-of-pocket. All the rest the 7 boys worked together to fund-raise the efforts ($220/scout). Some worked harder than others. One boy had a summer conflict and couldn't go. Another had a family problem and dropped out at the last minute, and third boy joined too late to get ready. Although all the boys put in differing amounts of effort, they all get treated the same. NO ONE complained, not even their parents that someone got a free ride and did too much slacking off or that their son won't receive any special consideration for having put in effort and couldn't go.

 

And by the way, one boy (the most economically challenged) ended up with the family conflict and couldn't go, still made sure he was on every work roster for fundraising and did his part regardless even after he realized he couldn't go.

 

ISA's negate the patrol-method and teamwork in general. When everything boils down to "what's in it for me" then the BSA needs desperately to reevaluate it's own value system and what it wishes to accomplish with it's program. I'm thinking doing a good turn daily and helping other people at all times really doesn't seem to have maintained it's importance in the program.

 

I'm an Eagle Scout, bought and paid for with just popcorn and Christmas tree money. I even had enough money left over to outfit myself in camping equipment for the next 20 years.

 

I really don't think BSA has done well with this and is discouraging the practice only because the IRS has become suspicious. I surely would be concerned if the IRS had a higher moral/ethical standard than the BSA.

 

Stosh