New Council Fee

[CynicalScouter]

47 minutes ago, InquisitiveScouter said:

I have often thought units might give (even anonymously) gifts to value-added council employees to support them directly.  2020 & 2021 exclusion is $15K.

I can see SOOOOO many problems with this. First, if you can couch it as a "gift" exempt from taxes, they would still have to declare it on their income taxes.

Second, secretly giving money to a council employees for their work would likely a) be considered tip income and not a gift b) a violation of their employment status as a council employee c) appear like a bribe and/or d) create an insane competition and/or animosity among council employees.

[CynicalScouter]

52 minutes ago, InquisitiveScouter said:

I can see a future for unit-level Scouting without the need for a district/council structure.

Which would require 1) the outright liquidation of Boy Scouts of America and 2) the rescinding by Congress  or court-ordered dissolution of the Congressional Charter.

Until that time, that Congressional Charter prohibits what you are considering unless you want to completely create a new organization (e.g. the Baden-Powell Association).

[walk in the woods]

6 hours ago, CynicalScouter said:

This is to my understanding not a Council issue but BSA. Districts are not allowed to have their own accounts/fund or to keep/retain money. ALL funds are directed or revert to Council.

To confirm yes, all funds raised in the name of Scouting are Council's (other than unit fundraising) or National's. You therefore are not permitted to maintain your own accounts/"pot of money."

How hard would it be for the Council to just keep a ledger.  Money comes in from a camporee it goes into the council account and a credit entry is made in the district ledger.  Expenses for the event are paid from the council account anNd a debit is entered in the district ledger.  Camporee makes money there is a credit balance in the ledger to start the next event.  It would require council to keep their hands off the actual money though.

[ParkMan]

38 minutes ago, walk in the woods said:

How hard would it be for the Council to just keep a ledger.  Money comes in from a camporee it goes into the council account and a credit entry is made in the district ledger.  Expenses for the event are paid from the council account anNd a debit is entered in the district ledger.  Camporee makes money there is a credit balance in the ledger to start the next event.  It would require council to keep their hands off the actual money though.

You are correct - this could be easily done, even in the current structure. 

There just needs to be a reason to want to do it.  Primary reason that it doesn't happy now is that many council budget committees are oblivious to the need.

[ValleyBoy]

The biggest problem in my district on event costs is that the Council wants event fees turned into Council.  The Volunteers that put on the event then have to jump thru hoops to get back there out of pocket for event costs.  The volunteers do not like having to wait several months after the event to be reimbursed for the cost of putting on the event. 

[CynicalScouter]

49 minutes ago, walk in the woods said:

How hard would it be for the Council to just keep a ledger.  Money comes in from a camporee it goes into the council account and a credit entry is made in the district ledger.  Expenses for the event are paid from the council account anNd a debit is entered in the district ledger.

Because legally and financially speaking, BSA does not recognize any such program as permitted. That money belongs to the COUNCIL. Any funds belong to the COUNCIL (or National, depending on the context). Districts are appendages of the Council and it is the Council that sets and approves expenditures. Not districts. Districts do not exist as independent entities for such purposes and they have NO authority to save, collect, or spend.

Rules and Regulations of the Boy Scouts of America

Quote

Subject to these Rules and Regulations, local councils control the raising and expenditure of all funds for local Scouting work in their jurisdiction.

Moreover, and I know a few councils that have done this, they have simply eliminated districts outright.

Rules and Regulations of the Boy Scouts of America

Quote

For the purpose of unit service and program administration, a local council may be divided geographically or functionally into such districts as the local council executive board may determine.

So, for this plan to work, you would need to amend at least 4 sections of the Boy Scouts of America Charter and Bylaws and rewrite the District and Council segments of the Rules and Regulations of the Boy Scouts of America.

 

Edited January 15, 2021 by CynicalScouter

[ParkMan]

3 hours ago, InquisitiveScouter said:

Just thinking about this...and please help me flesh out these thoughts...

The IRS allows individuals to receive monetary gifts, up to a certain amount, tax free.  I have often thought units might give (even anonymously) gifts to value-added council employees to support them directly.  2020 & 2021 exclusion is $15K.

Give privately, so council doesn't reduce their salaries.

Having done Lone Scouting in various locations around the world (registration and support processes through electronic means), and with Scoutbook and Scoutshop on line, I can see a future for unit-level Scouting without the need for a district/council structure.

We ran our own Summer Camp.  Kids loved it.  Agree that many units would not be able to mount that sort of effort.

Maybe "Council" should just be centered around the Summer Camp (or a long-term camping experience).  Now that I think of it, that is where most of our council's expenditures are (outside of salaries) anyway.  (So, if we have a full-time paid Camp Director on staff, why should the SE be making a salary that puts them in the top 7% economic bracket, nation-wide??  The SE isn't the one managing the top expenditure in the council, the Camp Director is.  Hmmmm)

Training done regionally...maybe with smaller regional area divisions, supported by National???

What to do about insurance, though...we do need that support...

Again, musings...have a great weekend.   Going camping now

 

I still think the right answer is not all that complicated.  It can all start by simply splitting the income/expenses so that it enforces certain behaviors.

• program fees go to pay for programming
• donations can go to either pay for growing scouting, unit support, or programming - it's at the discretion of the person who donates.

Create a hard wall between the different sides financially.

In the council's annual report, get them to specify income, expenses, and what they did for each aspect.

[MattR]

21 minutes ago, walk in the woods said:

How hard would it be for the Council to just keep a ledger.  Money comes in from a camporee it goes into the council account and a credit entry is made in the district ledger.  Expenses for the event are paid from the council account anNd a debit is entered in the district ledger.  Camporee makes money there is a credit balance in the ledger to start the next event.  It would require council to keep their hands off the actual money though.

Thank you, that's exactly what I'm talking about. I don't want a bank account, I want an accounting system account.  I don't want to handle the money, I just want it known that when I submit receipts it's charged against the excess we brought in the camporee before. Not only can we keep costs down for scouts but the council can figure out how the money flows.

6 hours ago, CynicalScouter said:

No accounting system? At all? Then how do they report their IRS 990s?

If they have no accounting system at all, then your Council is in violation of at least half a dozen state and/or federal laws regarding charities/not-for-profits. Pick up the phone. Call the police. Call the state secretary of state and/or whoever has oversight over charities in your state.. Call the IRS.

Okay, I can understand the confusion. They do have an accounting system. And it has just enough resolution to satisfy the IRS. But accounting systems can be used for a lot more than that. The question is why $600/scout/year? My council's accounting system can't give much of an answer for that. If each district had accounts for, say, events and training, then they might be able to answer questions as to whether they're helping units or not. My council has no idea at all how many scouts go to each of our events. I would give them the checks and the receipts and that would be recorded in the same account that holds every event put on in the council: district, council, training, merit badge fairs, camporees, pinewood derby, all of it. Of course, I suspect they couldn't even answer the question of how staff were paid. There was a time, and it might be back, that new DEs were taught how to file for food stamps because the council was running out of money at the end of the year. I said this before but my events had a couple of fees that we had to charge for the council that was something around 35% of our expenses, that went into paying for one of the staff's salary. The fees were called something like insurance and something for the DE, who never showed up anyway, but it was really about covering salaries.

I understand that my council might not be the poster child of well run but I suspect it's close to normal. My guess is that councils that are around major metropolitan areas are still getting plenty of donations and are doing okay. We have a physically very large council that covers a lot of not so great farm land. We do have 2 of 5 districts that have towns in them that are doing okay. The rest of our districts are just in relatively poor areas when it comes to donations. That's why I keep hammering on the $600/scout. I want every kid in my council to see the value in scouting.

2 minutes ago, ValleyBoy said:

The biggest problem in my district on event costs is that the Council wants event fees turned into Council.  The Volunteers that put on the event then have to jump thru hoops to get back there out of pocket for event costs.  The volunteers do not like having to wait several months after the event to be reimbursed for the cost of putting on the event. 

We would get enough cash that we just took it before we sent the money in. We always had records, that were much better than the council's, in case anyone asked. Nobody ever did.

[ParkMan]

5 minutes ago, CynicalScouter said:

Because legally and financially speaking, BSA does not recognize any such program as permitted. That money belongs to the COUNCIL. Any funds belong to the COUNCIL (or National, depending on the context). Districts are appendages of the Council and it is the Council that sets and approves expenditures. Not districts. Districts do not exist as independent entities for such purposes and they have NO authority to save, collect, or spend.

Moreover, and I know a few councils that have done this, they have simply eliminated districts outright.

So, for this plan to work, you would need to amend at least 4 sections of the Boy Scouts of America Charter and Bylaws and rewrite the District and Council segments of the Rules and Regulations of the Boy Scouts of America.

 

Respectfully, you are making this too complicated.

All that is being suggested is that the council maintain a line item for each district which is the amount of the current district surplus.  At the end of the year, any district surplus adds to/subtracts from that line item.  If a district knows it has a surplus, it can draw from it for programming.

Districts are still a subdivision of the council and the council still maintains all the records and accounts. 

Many of the posts suggest some sort of animosity between districts and council.  There is more casual neglect than their really is any true animosity.  Our council finance volunteers don't have any real district experience and so they just don't know what they don't know.

 

[CynicalScouter]

27 minutes ago, ParkMan said:

All that is being suggested is that the council maintain a line item for each district which is the amount of the current district surplus.

Except, and this is the key, there's no such thing as a "district surplus". Districts have no budgetary or financial authority.

What you want to achieve (districts financially independent of councils able to keep and spend their own money) would require the amendments to the Charter, Bylaws, Rules and Regulations I previously mentioned.

Rules and Regulations of the Boy Scouts of America

Quote

Subject to these Rules and Regulations, local councils control the raising and expenditure of all funds for local Scouting work in their jurisdiction.

LOCAL COUNCILS control the raising.

LOCAL COUNCILS control the expenditures.

Not Districts which (as I noted) exist at the will and the whim of the Council.

What you want to do is amend this I guess to

Quote

Subject to these Rules and Regulations, local districts control the raising and expenditure of all funds for local Scouting work in their jurisdiction.

or

Quote

Subject to these Rules and Regulations, local councils and districts control the raising and expenditure of all funds for local Scouting work in their jurisdiction.

Edited January 15, 2021 by CynicalScouter

[ValleyBoy]

47 minutes ago, MattR said:

We would get enough cash that we just took it before we sent the money in. We always had records, that were much better than the council's, in case anyone asked. Nobody ever did.

That is what was being done until Council stepped in and informed the districts all events cost had  to be paid by Council.  Council even went to the extreme of having a professional at all district events to collect event fees. 

[CynicalScouter]

7 minutes ago, ValleyBoy said:

That is what was being done until Council stepped in and informed the districts all events cost had  to be paid by Council.  Council even went to the extreme of having a professional at all district events to collect event fees. 

Yes, because it is Council that is the incorporated entity, not the district.

It is the Council that has a charter from National, not the district.

It is Council that is required to provide an accounting to the IRS and various state and/or local entities in order to maintain their status as a charity. Not the district.

So you darn right, if I were the accountants and/or legal counsel for a Council, I would absolutely tell people to make checks payable to XYZ Council, not the district.

And just as a reminder...

Rules and Regulations of the Boy Scouts of America

Quote

Subject to these Rules and Regulations, local councils control the raising and expenditure of all funds for local Scouting work in their jurisdiction.

Edited January 15, 2021 by CynicalScouter

[TAHAWK]

"What happens, legally speaking, when a group of people get together and decide to perform some task without filing any legal paperwork or establishing any formal legal structure?

Whether they know it or not, they have formed an unincorporated association. “Unincorporated association" means an unincorporated group of two or more persons joined by mutual consent for a common lawful purpose, whether organized for profit or not.

Now, if the lawful purpose they’ve joined together to accomplish includes earning a profit, their association is automatically a partnership or joint venture for tax and most other legal purposes. For example, if two people get together and decide to operate a food truck, they’ve formed a partnership, even if they file no paperwork.

But, if the purpose for the association is to benefit the public some way, and does not include earning a profit, the association’s members have formed an unincorporated nonprofit association. People form nonprofit unincorporated associations all the time; often without being aware of it. For example, if you and several of your neighbors get together to help raise funds to keep your local library branch open, you’ve formed an unincorporated nonprofit association.

If an unincorporated association’s purpose is charitable, educational, and/or scientific in nature, it can qualify as a Section 501(c)(3) organization (also called a public charity). Contributions to Section 501(c)(3)s are tax deductible. If an unincorporated charitable nonprofit has less than $5,000 in annual revenues, it may function as a 501(c)(3) without applying for IRS recognition of its status. However, as a practical matter, it may be difficult to obtain contributions without an IRS determination letter officially recognizing the nonprofit as a Section 5010(c)(3) organization.

An association with over $5,000 in revenue must apply for recognition from the IRS by filing IRS Form 1023. It is not necessary for an unincorporated association to convert to a nonprofit corporation to obtain IRS recognition of its Section 510(c)(3) status. However, the association must adopt written bylaws or a constitution, and include it with its IRS application. It’s probably easier to form a nonprofit corporation than to adopt such bylaws or constitution.

The biggest drawback to the unincorporated nonprofit association, and the reason nonprofits often abandon this form in favor of a nonprofit corporation, is that it has no separate legal existence apart from its members. Because it is not respected as a separate legal entity, its members generally can be personally liable for its debts and liabilities. Some states, such as California, give some limited liability to nonprofit association members; but it’s not as good as the protection obtainable from a nonprofit corporation. Moreover, unless your state law contains an “enabling statute” granting such rights entities, an unincorporated association cannot hold or receive property, or sign contracts, in its own name.

Because of these limitations, nonprofit unincorporated associations are usually used to accomplish limited short-term goals, such as raising funds for a library. Nonprofits with long-term missions should usually incorporate." [emphasis added]

https://www.nolo.com/legal-encyclopedia/what-an-unincorporated-nonprofit-association.html

 

[TAHAWK]

6 hours ago, CynicalScouter said:

I can see SOOOOO many problems with this. First, if you can couch it as a "gift" exempt from taxes, they would still have to declare it on their income taxes.

Second, secretly giving money to a council employees for their work would likely a) be considered tip income and not a gift b) a violation of their employment status as a council employee c) appear like a bribe and/or d) create an insane competition and/or animosity among council employees.

A gift is not income.   "Income" is a very important concept and there is lots of law defining it.  A true gift is not it.

Gifts are taxable to the giver by the Gift Tax to the extent that, for each of  2019 and 2020, he or she gave more than $15,000 to a single recipient.    A recipient can receive any total amount as gifts from multiple givers and have no tax liability.  But these have to be real gifts, not earned compensation.   No wink, wink, nod, nod stuff.  The reciepient cannot be required to do anything as a condition on receving the  gift.

If you gave $15,000 to A's spouse, and the spouse,  of his or her own free will, in turn gave it to A,  it is not taxable to anyone.  There cannot be an understanding that the spouse is a mere conduit.

[ValleyBoy]

3 hours ago, CynicalScouter said:

Yes, because it is Council that is the incorporated entity, not the district.

It is the Council that has a charter from National, not the district.

It is Council that is required to provide an accounting to the IRS and various state and/or local entities in order to maintain their status as a charity. Not the district.

So you darn right, if I were the accountants and/or legal counsel for a Council, I would absolutely tell people to make checks payable to XYZ Council, not the district.

And just as a reminder...

Rules and Regulations of the Boy Scouts of America

All payments made by check were mad out to the council.  As far as accounting receipts for expenses were turn in to the council for the expenses uncured for the event.  The problem the amount of time it took to reimburse the expenses to the volunteers that covered the cost of the event.  60 to 90 is unacceptable.  These same volunteers would not of had any problem if they would have been   reimbursed within several weeks.