I am frequently asked questions about fundraisers for homeschool groups, especially about individual fundraising accounts.
What’s in Individual Fundraising Account?
An individual fundraising account is any method by which a nonprofit group credits an individual or family for some or all of the funds raised by that individual or family. Usually, credit is given for sales of products and services at the organization’s fundraising events.
Aren’t IFAs used by a lot of youth organizations?
These IFAs are very common, especially in scouting and youth sports. In the past, youth organizations followed some simple guidelines that they thought made the practice of creating IFAs acceptable. Here’s an example of an IFA policy.
Boy Scouts discontinuing Individual Fundraising Accounts
And now it appears that the Boy Scouts USA has also changed their policy regarding IFAs. According to BobwhiteBather.com,
… the Boy Scouts of America is beginning to inform units that they may no longer allocate fundraising proceeds to “Scout accounts” for the private use of members to pay their expenses. This goes against a longstanding recommendation that units should use fundraising to allow individual Scouts to pay their own way. The new policy was first found buried in a publication aimed at councils on running effective product sales, which was released late last summer, and most recently appeared in Fiscal Policies and Procedures for BSA Units, a summary of frequently-asked questions about unit finance.
FYI, the Boy Scout document cited above says quite clearly, “Funds raised by the unit from product sales belong to the unit. They may not be transferred to the Scout.”
So, my advice to homeschool organizations is unchanged:
- Do NOT set up individual fundraising accounts.
- If you have them now, STOP!
- If you conduct fundraising, do not record how much each family brought in.
- Do not have a system where tuition or dues are reduced by the amount of fundraising a family conducts.
You may find your organization can still function quite well, or even better without individual fundraising accounts like Becky’s homeschool group did.
Carol Topp, CPA