Any Insights to on Council Fundraising Report?

[InquisitiveScouter]

Ok, so, for kicks I ran through the last five IRS Form 990's available for our council (from the IRS website)  (latest posted is 2019), Schedule G, Part II, Fundraising Events.

Net Income?

2019:  -$10,617 (5 total events...golf outings, skeet shoots, etc.)

2018: -$7,550 (7 total events)

2017: -$6,261 (7 total events)

2016: -$68,351 (8 total events)

2015:  $41,735 (7 total events, and hey!  In the black)

So, for those five years, the net income for 34 events was -$51,044

Does this mean the other revenues in our council have gone to subsidize these?

Or, is there some accounting nuance I might be missing here?

 

[ShootingSports]

Net means revenue less expenses.  So, profit (or loss in this case).  You would have to know the expenses charged to really know.  Was the Development personnel salary included?  How about the SE? Did your camp charge for use of its facility separately?  Any allocation of operating overhead to support (which might have to get paid even if you didn't have event?)

 

Worth asking about though if they are not profitable and  costing cash.......

[qwazse]

Net is net, so it is unlikely that here is some “other revenue” that wouldn’t have also been reportable to the IRS. What’s more likely is that your council had a very large operating reserve (likely true if 2000-2014  netted as much as 2015) that has been spent down gradually.

You would need to gather your council’s annual reports to understand that better. If your COR has been attending board meetings , he/she might already have them. 

[MattR]

Four years in a row of losing money while fundraising means either the council is inept or they're writing off other expenses against it so they don't have to pay as much taxes, or some such accounting games. It's likely legit and opaque unless you dig into the details.

[SiouxRanger]

10 minutes ago, MattR said:

Four years in a row of losing money while fundraising means either the council is inept or they're writing off other expenses against it so they don't have to pay as much taxes, or some such accounting games. It's likely legit and opaque unless you dig into the details.

Not for profits generally don't pay taxes.

They do solicit donations and grants and a perhaps a poorly performing financial stratements-would that be a plus for soliciting funds?

Our council's financial statements are not prepared according to GAAP so it is impossible to tell if summer camp made a profit, or lost money. Same with cub day camps.  The Council Executive surely knows, and perhaps the Council President. I doubt anyone else knows.  The #2 in command does not know.

[Wëlënakwsu]

Accounting nuance:  "Form 990, Schedule G, Part II... is only the non-deductible portion of each ticket (the cost of food, clay pigeons, etc) and does not include any of the Contribution revenue, which is reported with other Contribution revenue on Part VIII"  

Source is one of the clearest explanations I found: https://www.grfcpa.com/2018/09/compliance-best-practices-for-reporting-fundraising-events-on-the-form-990/

 

 

[T2Eagle]

On 4/1/2022 at 10:09 AM, InquisitiveScouter said:

Ok, so, for kicks I ran through the last five IRS Form 990's available for our council (from the IRS website)  (latest posted is 2019), Schedule G, Part II, Fundraising Events.

Net Income?

2019:  -$10,617 (5 total events...golf outings, skeet shoots, etc.)

2018: -$7,550 (7 total events)

2017: -$6,261 (7 total events)

2016: -$68,351 (8 total events)

2015:  $41,735 (7 total events, and hey!  In the black)

So, for those five years, the net income for 34 events was -$51,044

Does this mean the other revenues in our council have gone to subsidize these?

Or, is there some accounting nuance I might be missing here?

 

Our LCs form show a breakdown of Revenue and Expenses on that schedule, does yours not?  

[InquisitiveScouter]

10 hours ago, T2Eagle said:

Our LCs form show a breakdown of Revenue and Expenses on that schedule, does yours not?  

Yes, they all look like this

 

[InquisitiveScouter]

So, if I read all the other Form 990's right, from 2016 to 2019, those events lost a combined $92,779...

 

[MattR]

What are gross receipts? It's in the indirect expenses category.

Here's my guess. The fundraiser is to offset some other expenses like the cost of upkeep on the pool, shotguns, whatever. Those other expenses are the gross receipts. The amount of money made to offset those expenses was $128k in contributions - $60k in direct expenses = $68k. No longer inept but not very cost effective. I mean, if half of my donations went to the cost of raising the money I'd not be thrilled. I also wonder how much salary was in the gross receipts.

[T2Eagle]

OK, no they're not losing money on those events.  The contributions there are also money they brought in as part of those events.  "Contributions reportable on Schedule B(Form 990) are contributions, grants, bequests, devises, and gifts of money or property, whether or not for charitable purposes." 

I'm not tax guy enough to know exactly why they're pulling them out of gross receipts, but they're definitely revenue associated with the events.  Most likely some part of every ticket they sell for say the golf outing is listed as a gift or "contribution" rather than just kept as simple gross receipt.  It is likely related to what the value of the golfing is and then the amount above that is considered a contribution.  So, $100 golf ticket buys you $25 worth of golf --- what you would pay if it wasn't a charity gig --- the other $75 is the gift you're making to the council.  

But the end result is the same, that top line Gross Receipt is the real money coming in.

ETA: I should have read Wëlënakwsu's helpful link.  It has a more straightforward explanation than mine.

Edited April 3, 2022 by T2Eagle

[ShootingSports]

Liars, Damn Liars, and then Accountants.......lol

 

[fred8033]

On 4/3/2022 at 11:13 AM, T2Eagle said:

But the end result is the same, that top line Gross Receipt is the real money coming in.

Also ... the events are also needed to create energy / connections for future contributions that don't get tied directly to the events.  So losing money on some events might be acceptable if the overall on-going fundraising efforts are going well.  

 

Edited April 7, 2022 by fred8033