UNIT FINANCES
Business-like finance management not only assures that your unit will remain solvent and have what it needs when it needs it, it also provides a fine example for your youth members. A good unit should neither spend more than it earns nor earn more that it spends. As much harm can be done with one extreme as with the other.
How do we know how much money we need?
You need a budget: a plan for receiving and spending money. Your budget will show in dollars what your unit has planned for the year to come. In developing the budget, you need to estimate expenses for the year and create a plan for paying those expenses.
Look at your unit’s program for the upcoming year; where are you going to go and what are you going to do? And how do you plan to pay for it?
- If you have receipts from the previous year, great – you have a guide.
- If you’re a new unit, you can use a BSA budget planning worksheet to give you a list of items you might include in your budget. You could also ask advice from your Unit Commissioner (that’s a volunteer in your area whose job is to help a few units in your district) or your District Executive (that’s the BSA professional employee who is responsible for serving units in your district).
- Whether you’re an existing unit or a new one, the best, safest, and most time-effective way to pay for your program is by taking part in our council’s annual Fall Popcorn sale fundraiser.
In keeping with the principles of Scouting, a unit pays for its program by earning and saving the money it needs. Yes, a unit may have families who can afford to just “write a check” at the beginning of the year… but then its Scouts miss a valuable lesson in self-reliance.
Here’s a look at some basic expenses every Scout unit has:
- Registration fees (this is the amount the national Boy Scouts of America charges each youth and adult to join the organization)
- Unit liability insurance fee (a required fee included with your annual BSA charter application)
- Unit accident insurance
- Advancement and recognition items
- Activities/Trips/Camps
- Program materials (everything from camping equipment to ceremonial props)
- Contingency/scholarship fund
FREQUENTLY ASKED QUESTIONS
Who is responsible for the finances of the unit?
The unit committee is responsible for the unit’s finances. A treasurer is assigned and the committee chairperson should receive the bank statement to reconcile monthly. All unit funds should pass through the bank account; this includes but is not limited to dues, money from unit fundraisers, product sales, and gifts.
What do we do with our money once we’ve earned it?
Checking Account
Unit funds should be deposited in a checking account that requires two signatures, typically the Treasurer and a member of the Unit Committee. Contact your charter organization for permission to use their EIN and direction on who to use as the responsible party.
Does a pack or troop need its own tax identification number? If so, where do we get it?
All units need a tax ID number (also referred to as an “EIN” Employer Identification Number). Units should NOT use the Social Security number of an adult leader. Units may use the tax ID number of their chartering organization if given permission. This may be especially useful for the unit if that organization is tax-exempt. Most units obtain their own tax ID number by completing IRS Form SS-4. There is no cost involved. The current form and instructions are available on the IRS website at www.irs.gov.
Budgeting
Can we charge dues?
Yes. However, we ask that you keep any dues amount at a level where each youth member can learn to pay their way without dues posing a hardship.
Should our Scouts’ and leaders’ registration fees be a part of our budget?
Yes. Adding registration fees to the budget helps make the rechartering process much easier (recharter is the process where your unit tells BSA at the end of the year who is re-registering as a member of your unit and who is dropping out).
How specific do we need to be with our unit budget plan?
Be as specific as possible but remember that things happen and you might have an unanticipated expense. It’s a good idea to keep a reserve fund of 15-30% of your annual budget for emergencies.
Fundraising
Can a unit elect to earn money in ways other than Popcorn?
Yes, though you will spend more time selling and make less money doing it compared to the popcorn sale. Units can be approved to raise funds from something other than popcorn by submitting a Unit Money-Earning Application form.
Are signatures required for the online Unit Money-Earning Application form?
No. However, our council grants approval with the understanding that Chartered Partner and Unit Committee approval has been secured.
Why is this Unit Money-Earning Application important?
It is national policy, but here are some of the reasons why the policy is in place:
- Call referral of potential customers
- Problem solving
- Health & Safety
- Guide units in making good decisions
- Save units from possible heartache
- Ensure that units are not binding the Boy Scouts of America or the Capitol Area Council in contractual agreements
When should our unit submit a BSA Unit Money-Earning Application?
For all unit fundraising, all unit money-earning projects must be approved in advance by using BSA’s Unit Money-Earning Application. Approval must be made by the chartered organization and the local council.
Can we solicit gifts for our unit?
No. Simply put, units are not permitted to solicit any gifts. Both the Charter and Bylaws and the Rules and Regulations of the BSA make this very clear — only local councils may solicit individuals, corporations, United Ways, or foundations for gifts in support of Scouting. Units, unit leaders, and youth members may not solicit gifts in the name of Scouting or in support of unit needs and activities. Units are also prohibited from soliciting gifts on their websites. Units may earn money for activities through approved fundraisers.
Does that mean people can’t make gifts to our troop?
Units are not supposed to solicit gifts, but they can receive gifts. Anyone can contribute to a Scout pack, troop, or unit — and many donors don’t need or care about charitable deductions. Obviously, defining a “solicited gift” is not always easy. But we rely on our unit leaders to set good examples and honor the intent and spirit of these important guidelines. We know it’s hard to stop people from being generous, especially towards Scouting.
Can gifts go to the local council to benefit our unit, then “pass-through” the council to us?
No, your unit “belongs” to your chartered organization, not to your local council. IRS guidelines prohibit any charity from accepting gifts that are “passed through” to a person or unrelated entity.
My local company has employee volunteerism grants and they will contribute to charities where I volunteer my time. Can these gifts go to our unit?
Employee incentive awards and volunteerism grants usually can NOT go to a pack, troop, or unit, due to the company’s giving restrictions. Corporate donations often can only go to charities that are 501(c) (3) charities, and many units are not chartered by tax-exempt charities. Also, many companies won’t make gifts to religious organizations. If a unit is “tax-exempt,” it’s often because it’s chartered to a place of worship, so they can’t receive corporate funds either. Of course, corporate awards and grants may go to any local council.
Can I use the council’s Tax ID Number for donations to my local unit?
No, because your local unit is owned by your sponsoring organization any gifts to your unit would be a gift to the sponsoring organization and it should be that tax ID number you use.
What Tax ID Number should I use for an Eagle Project?
Donations to an eagle project are donations to the organization benefiting from the project and not donations to the council or your local unit. Any excess donations should be returned to the beneficiary organization. Therefore, you should use the Tax ID number of the beneficiary organization. For example, if you were building bird boxes for the bird refuge you would use the Tax ID number for the bird refuge for any donation.
Can I make a donation to the United Way and have it counted towards Friends of Scouting?
We encourage generous participation in local United Way campaigns and encourage donors to designate the Michigan Crossroads Council as a beneficiary. However, due to IRS and accounting rules, we are required to separate gifts given directly to the Michigan Crossroads Council, and gifts are given indirectly through organizations such as the United Way. We are unable to apply United Way gifts to Friends of Scouting.
Other Finance Questions
Should our unit consider insuring our unit equipment?
Yes, it is suggested that your unit insure its equipment. Remember, the chartered organization owns the unit, and all funds used by the unit remain the responsibility of the chartered organization as long as the charter issued by the BSA remains in place. It is recommended that an inventory be given annually to the chartered partner of the unit’s equipment. Insurance guidelines may vary by sponsoring organization.
What happens to the unit funds and equipment should the unit dissolve?
In the event of the dissolution of a unit, or the revocation or lapse of its charter, the unit committee shall apply unit funds and property to the payment of unit obligations and shall turn over the surplus, if any, to the local council. In the case of a chartered organization, any funds or equipment which may have been secured as property of the unit shall be held in trust by the chartering organization or the council, as may be agreed upon, pending reorganization of the unit or for the promotion of the program of the Boy Scouts of America.
Is our pack or troop considered tax-exempt by the IRS?
If its sponsoring organization is also tax-exempt. The unit is actually “owned” by its chartered organization. Chartered organizations vary widely in tax status, but the tax status of your unit is the same as that of your chartering partner.
Can our pack or troop be covered under the BSA’s group exemption?
No. The IRS only allows local councils (and council trust funds) to be included under the BSA group exemption.
Can we apply for our own tax-exempt status?
Units should not incorporate or apply for their own tax-exempt status. Units could lose their charter if they tried to get their own tax-exempt status and solicit tax-deductible gifts.
How long does our unit need to retain financial records?
Most transactions are online these days so retaining a hard copy of records is not absolutely necessary. However, a good rule of thumb to go by for the person in charge of finances is to keep hard copy records for the time they are in that position – handing over the hard copy to the next person handling the records. Where possible, it is best to retain 2-3 years’ worth of hard copy records. You definitely will want to keep important documents involving any change in account signers or any other big or unusual activity. Financial institutions keep records for seven years. Should units need anything that far back, you can usually find the information at its financial institution.
Youth and Scout Accounts
A Scout is thrifty. Learning to manage money is one of the ways the BSA prepares youth for life. Budgeting and earning money to accomplish goals through an approved council or unit project helps Scouts develop self-reliance and the skills of personal finance management. Unit fundraising designed to make Scouting affordable is a fundamental part of Scouts “earning their way.” Private benefit rules of the Internal Revenue Service prohibit those involved in nonprofit fundraising from receiving a substantial personal benefit for their efforts. Some practices where dollar for dollar credit is provided for the sole benefit of the person who sold product based upon the amount sold could violate the private benefit prohibition. Funds raised from unit fundraising belong to the unit. They may not be transferred to the Scout or another unit but may be re-assigned to units sponsored by the same chartered organization, such as when a Scout moves from Cub Scouts to Boy Scouts or Boy Scouts to Venturing. The unit committee is responsible for expenditures from unit funds for the benefit of the unit. Unit funds may be used to reduce the cost of participation, including the cost of attending camp or obtaining uniforms. They may be used to provide financial assistance or awards to individual Scouts based upon their level of participation generally or in specific activities benefiting the unit, chartered organization or community, attendance, advancement, and/or need. Unit funds may be used to buy equipment for the unit or for any other legitimate need of the unit.
Are there Scholarships for Scouts?
Yes! Camperships can be awarded to help Scouts and Adults attend summer camp and other training programs. Please visit our Camperships page for more information.
