Company Matched Donations to Troop

[YinYan75]

Hello, I am a new-ish Committee Chair trying to get a handle on fundraising/donation policies and rules and regs. We have a scenario right now where a registered parent of a scout has donated money (say $500) through a company's Charitable Matching program they have. It's a big banking company and the program is legit. They expected the money to be matched, then when the company matched it and sent a check through our chartered church to our troop as a $1000 (for example). Once the money comes to our treasurer, the parent is expecting half the money back, to be used for his son's troop activity fee, summer camp fee, etc. Kind of like an individual scout account. I have told her this is not how charitable donations work. The parent wants to tell other parents how to get this done through their company's match programs too. I thought the check would be decided on how to be used by the troops committee for the good of the troop.

I feel that they are either defrauding the company, or taking the money out of the scout's pocket once it comes back to us. It was a donation and not an investment that gets doubled. Am I right in thinking this way? Or should we be giving a percentage back to the scout that donated the money?

As far as I know, we do not have solid troop policies in place for donations and and individual scout accounts. We do fundraising activities, like car washes, chocolate sales etc. where all the money raised just goes to the troop. But I would like to put together some things in place for the parents to follow for the donations and fundraising, where we are following actual legal rules and regulations.

Thank you for your help and input!

[RememberSchiff]

@YinYan75   welcome to scouter.com

[InquisitiveScouter]

Off to a Troop meeting, but will chime in on this later.

Tread carefully...

And no, the money does not go to the Scout... yikes

 

[mrjohns2]

I am all for Scout accounts and even fund raising proceeds going into a scout account based on what they sold. What this family is saying? No, not ok. It is "over the line" for me.

[Tron]

This is not correct. Once money is donated to a unit is technically property of the unit. There are a lot of IRS rules that dance around scout accounts and if you give money back to the parent, even as a sub account/scout account line item in this nature you risk your charter organizations non-profit status due to the personal inurement regulations of the IRS.

[scoutldr]

Your Council has firm policies on fundraising and donations.  Consult your Scout Executive. What's being proposed is NOT acceptable, unless your unit is registered with the IRS as a 501(c)(3) charitable organization.  

[InquisitiveScouter]

Programs like this are indeed legit.  Do not contact anyone at council until you thoroughly understand all the info below.

OK, going through your post item by item...

"We have a scenario right now where a registered parent of a scout has donated money (say $500) through a company's Charitable Matching program they have. It's a big banking company and the program is legit. They expected the money to be matched, then when the company matched it and sent a check through our chartered church to our troop as a $1000 (for example)."

Let's verify who the actual donees are first.  To whom did the parents write their check?  Was the check made out to Troop X or some other recipient?  To whom did the Company make out their portion, AND, to which Employer Identification Number (EIN) did they credit the donation?  (This info should be on their check or the check stub (or some accompanying letter.)  These company programs may only make the donations to a legitimate 501 c (3) charity, and each charity has an IRS assigned EIN.  You can try to find the EIN / Charitable Organization using this tool: https://apps.irs.gov/app/eos/  Make sure the EIN matches the CO name.

Now, if the Bank put in the EIN for your local council, or the National council, then you have a problem.  The money then technically belongs to the council, or whoever is listed by EIN on the check.  [Your Troop is most likely not registered as a 501 c(3).  It could be.]  

Let's assume for a second that everything is as it should be... that is, 1)  Your unit is not a separate charitable org.  2) the parent check was written to Troop X, and 3) the bank check indicates the EIN for your CO.  If these are true, then that money technically belongs to the CO.  Did you or anyone inform/coordinate this donation with the CO?  Does the Treasurer for the CO understand that this donation is to be used for the Troop?   There are other details involved with this, but let's leave it at that for the moment.

What the parent proposes, giving the donation money solely for the use of their Scout, is ILLEGAL!!!  Do not, under any circumstances do this.  As @Tron points out, there is a principal the IRS looks at called Inurement (or private benefit) https://www.irs.gov/charities-non-profits/charitable-organizations/inurement-private-benefit-charitable-organizations

If your unit gives any of this donated money (either the check from the parent's or the matched bank donation, as the two amounts are "tied" together) to only that Scout, then you violate federal law, specifically the Internal Revenue Code passed by Congress.  In doing so you also would place your CO's charitable organization status in jeopardy!

One way you could use the money is to give each and every Scout an equal share of the total sum, and credit those in Scoutbook.  But, even that could present problems if the amounts are large.  The IRS has given NO specific guidance on this.  So, if the equal share for each Scout was $25, no one would blink an eye at that.  If the equal share for each Scout is $2500, then you are in troubled waters...  

Here are some related threads you might read to gain a more fulsome understanding.

If you need more specificity on this, and you are not comfortable posting information here, you may DM me...

Regards

 

[Tron]

When distributing equalized there are some dangers based on how much and to how many. At any time if 30% of net income (annual) benefits any 1 individual it violates the inurement rules (Wendy L Parker Rehabilitation Foundation INC v C.I.R). If an excess of 8% of gross revenue (annual) goes to member benefits it violates personal gain versus non-profit mission rules (Spokane Motorcycle Club V US 222 F. Supp 151 ). 
 

There are a bunch of other cases that touch on smaller amounts but you're dealing with a big dollar item so these 2 are the most probable court cases that define IRS rules that you need to be weary of.

[qwazse]

The best benefit a scout could have is lots of buddies being able to afford to join the troop.

We’d use windfalls like this to offset registration or camp fees.

You could even recognize that a particular weekend was thanks to the efforts of the family and their corporate matching program.

[BetterWithCheddar]

On 3/30/2025 at 6:38 PM, YinYan75 said:

Once the money comes to our treasurer, the parent is expecting half the money back, to be used for his son's troop activity fee, summer camp fee, etc. Kind of like an individual scout account.

I can't tell you whether this is feasible or even acceptable, but that parent is making an unusual presumption.

Of all the points of the Scout Law, I best personify "thrifty" (wife can confirm). My penny-pinching brain would never devise a rebate system where I make a "donation" to a legitimate company match program only to turn around and expect that amount rebated to personal slush fund without first consulting the other parties. I'm sorry this puts you in such a difficult position.

[SSScout]

Inquisitive Scouter says it.  So let it be written, so shall it be... 

Sorry, recently watched Yul Brynner as Pharoah...

I am often sadly amazed at the neglect of the Scout Law and Promise. Not to mention the Golden Rule and (nudge nudge) the desire to find ways around personal and societal limitations. This sort of thing makes me think about how things have changed , and/or stayed the same...

A Scout is Trustworthy (1948 Fieldbook): A Scout's  honor is to be trusted. If he was to violate his honor by telling a lie, or by cheating or by not doing exactly a given task when trusted on his honor , he may be directed to hand over his Scout badge. 

((Scout Handbook, 2016):  A Scout tells the truth. He is honest, and he keeps his promises. People can depend on him.

A Scout is Thrifty (1948 Fieldbook): He does not wantonly destroy property. He works faithfully, wastes nothing, and makes the best use of his opportunities. He saves his money so that he may pay his own way, be generous to those in need, and helpful to worthy objects.. He may work for pay, but must not receive tips for courtesies or Good Turns. 

(Scout Handbook, 2016) :  A Scout works to pay his way and to help others. He saves for the future. He protects and conserves natural resources. He is careful in his use of time, money and property. 

The IRS has a purpose, often overlooked, and that is to make (some of the monetary playing field even.  Donate money and then to claim it back for personal use just on face seems wrong.  Thru  the company's largess, that this parent wants to help the PURPOSE of Scouting along is wonderful, but the way that is requested is jut wrong. If the parent wants to establish some funds in his Scout's Scout Account (which idea I personally have never liked) is fine, but that is not what the company would understand, I bet. Oops, can't bet. No gambling in Scout fundraising...

Company matched donation?  To CO for use of Scout Units?  Wonderful;.  Buy a new Troop Trailer, a new Cub Pack Pinewood Derby track, new pop up tents, cook sets, camp stoves for the Patrols. Renovate, repaint the meeting rooms.  New sign out front "HOME OF CUB PACK AND SCOUT TROOP XYZ< MEETS FRIDAY 7PM>>>>" Send the whole Troop to Philmont.  Send the whole Cub Pack to overnight on the USS Constellation in Baltimore.  

But not for one Scout.... 

 

[fred8033]

11 hours ago, qwazse said:

The best benefit a scout could have is lots of buddies being able to afford to join the troop.

We’d use windfalls like this to offset registration or camp fees.

You could even recognize that a particular weekend was thanks to the efforts of the family and their corporate matching program.

100%.

I always wonder how many parents have paid for their scout's registration, camping and event fees, but then wrote it off as a donation to the troop.  ... BUT ... that's between them and the IRS.  It's not troop business.  

I've seen a few cases where the parent solicits their employers charitable donations (sometimes matching; sometimes based on hours donated) and have used the funds 100% to benefit their own family directly; especially when they were one of the key unit leaders.  The most egregious was a company donation used 100% to pay for the parent and scout's high adventure even though it was clear the company intended it to be a charitable donation and no one else from the troop went.  It just felt wrong.

IMHO, does it smell wrong?  Can you tell all the parents and scouts in the troop that's how the funds will be used?  Can you write a thank you note to the donor?  ...  "Dear ACME Inc,  Thank you for your company donation.  We greatly appreciate the donation and have credit Mr. W. E.  Coyote's son's scout account to cover their future scouting costs.   Thank you for supporting this scout.   Sincerely,  Mr. R. Runner"

At minimum, your whole unit committee should know how it's being used.  My gut says more than one person will say this is wrong.

 

Edited 8 hours ago by fred8033

[mrjohns2]

46 minutes ago, fred8033 said:

It just felt wrong.

In the IRS guides, at irs.gov, these give these clear “donation from family a, family a’s son benefits” as examples. Again, not a grey area of being over the line. Clearly over the line. 

[SiouxRanger]

So the company's program is to make 50% of a donation, but is actually making 100% of the donation. The employee/parent reported a donation (which the company/employer is matching) but in fact, the employee did not make any donation as the Troop is being asked to redirect the donation to the benefit of the employee/parent by using the employee/parent's contributed funds to pay the scouting expenses of the employee's/parent's scout which the employee/parent would otherwise have to pay in addition to the contribution.

The company may well see this as its employee defrauding the company. The company may well see this as an offense warranting termination of employment. Fraud is a civil wrong (as contrasted with a criminal offense).

The State's Attorney's Office might just see this civil fraud as the criminal offense of Theft.  In my state, criminal theft over $300 is a felony the last time I looked.

The employee/parent has further complicated the situation by assuming the role of ringleader by recruiting (or at least attempting to recruit) unit leadership into taking an active part in the scheme. Conspiracy?  The State's Attorney may well examine whether unit leadership's participation rises to the level of being accomplices.

Return both checks.

[SSScout]

YinYan:  Thank you for "Being There"  (a very good movie by the way) for our youth.   You will eventually be glad you did.

Going over this once more.  I retired from local gov't service about umpteen years ago, and we had a similar program.  I could (and did) donate money to a charity , and got the appropriate tax benefit, and my employer also donated an equal amount to the charity. The charity got twice the money, I got a tax bene,  All good. The charity does good things, so I support them. I might even , eventually need the service they provide, but did not seek to use it in any way.  The charity gets to decide what to do with the money to serve the purpose they serve. 

In YOUR situation, what I hear is this:  Parent would donate money to a charity , in this case, his Scout's Troop, thru the CO apparently, and his employer would send an equal amount to the Scout Troop too, thru the CO.   All good, Scouting gets twice the money, the parent can use the tax benefit as allowed. They are BOTH "Charity donations",  yes?  BUT...

Parent now wants her/his donation credited specifically to his/her Scout's benefit to pay for fees, dues, etc.  This is not right or appropriate or legal in many ways, and I am surprised the parent does not realize this. Or do they?  Donations to any charity  must be done with no expectation of a personal benefit in return, no Quid Pro Quo....  That makes it a business transaction, not a DONATION.  

Our Scout Council has several properties that are named for the donor that paid for them.  That is the only "quo"  I see in that. Did their son or Grandson or Great Grand daughter get any direct benefit?  I don't know, but the  name is on the gate and above the door. 

Your parent wants both a charitable donation AND paid Scout fees from the same bag of money.   Tain't funny, Magee....