BOY SCOUTS OF AMERICA

Scouting Forums

Conditional Dues

No, you have to look at how the funds are being used. If they are used to fulfill the purpose of the Scouting program without singling out a single individual, then it is not an individual benefit. It all comes down to how the funds are used.

For example, saying the unit will pay for summer camp for all Scouts from contributions is allowed. Saying Johnny’s camp is paid for because he raised enough to cover it but Joey's camp is not because he did not raise enough is an individual benefit that is not allowed.

You don’t write a check for the single person; you write the check for the unit to go and expect the individual to pay their way.

It has nothing to do with how the payment is made. All that matters to the IRS is where the money came from.

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The issue is: funds raised through unit fundraisers (popcorn sales, etc.) belong to the unit - not individual Scouts.

BSA Product Sales Guide (page 9)

Fiscal Policies And Procedures For BSA Units (FAQs)

Individual Scout Accounts and Fundraising by BSA Units

What is private benefit, and why is it not allowed?
Private benefit is when funds raised in the name of Scouting or another charity are directly allocated to the youth member or family doing the fundraising. Funds raised in the name of Scouting should benefit the entire unit. The tax laws do not permit private benefit, with the exception of an “insubstantial” benefit.

How is an “insubstantial” benefit defined?
The IRS has classified 30 percent of the money raised as “substantial,” and less than 2 percent as “insubstantial.” The burden of proof that the benefit is “insubstantial” is on the organization.

Our Pack does not have dues and we are very successful in both the council fundraisers (Coupon Books & Popcorn). We pay the scout fees for most events, but we have a few every year that we only pay for if a scout sells at least 15 Coupon books or $250 in popcorn. This has worked well for us.

Isn’t the $100 itself a donation to the Charter Org?

It is not a donation if it is a mandatory payment. If the Scout does not earn enough , then it becomes mandatory which makes earning the a personal benefit.

I appreciate these IRS facts first and foremost! Thank you for sharing them. Every group from a kindergarten finger paint project to an executive committee in a boardroom has some members that do more of the work than others.

Correct. If the kindergarten fingerpainting group raises money and uses the profits to buy paint for everyone, they’re fine. If the amount raised by individual fingerpainters determines how many colors available to you, there might be a problem. That might be profits of a tax-exempt entity inuring to the benefit of a private individual. If the fingerpainting group is run through a for-profit entity, the mney each kid earns might be income for the kid, since s/he gets something for it.

I don’t think the IRS is going around kicking over lemonade stands. However, a Scout is Obedient. We really should be following the law as we understand it. How likely it is that we will be caught should not be taken into consideration.

Peter

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The initial question is a key in every pack success. The key to addressing this issue is boils down to leadership. The problem with having a scout account with proceeds from popcorn sales is that it happens at the beginning of the scout year and new recruits don’t have equal amount of time to contribute therefor making the equal benefit disproportional. That I believe would violate the IRS guidance.

The real question I think is how do you motivate scouts and parents to participate in the popcorn fundraiser enough to fund the pack activities and other expenses. I think every pack has to define that in their own way. What we have found success is really defining the purpose of the fundraiser and outside the box motivation. When we were not successful in our popcorn fundraiser we defined the purpose as “it pays for the pack activity and a scout earns his own way”. We found that did not work. We had to redefine the purpose to not only include the aforementioned purposes but how and what lessons does each scout learns by selling popcorn. For example a scout learns how to sell himself and a cause. Which will be beneficial when he goes for a job interview later in life. The more he does it the better he will become. This example and many other you can tie right in to the scout law.

Motivation the scout. Unfortunately there is not a one size fits all. How we do it is we have each scout vote on a “Big Overnight Trip”. We factor that into the pack budget and then we find out the AVERAGE sales per scout has to be. Knowing that some scouts and new recruits will not reach the average but others will exceed it, I found the average approach is better. During popcorn kickoff and at recruiting nights I articulate the goal and the results of the goal. Then when a scout passes the average goal he earns a whipped cream pie that he will be able to feed to his leader of choice. Believe it or not we found the pie is a huge motivation and a fun thing to do.

Motivating the parents: This one I always found challenging. When I see a scout is not selling popcorn I will call or e-mail the parents. The most often reason is the parent doesn’t want to “peddle” popcorn. I explain to them how it is applying the scout law (see example from above). If that does not work another approach I do is ask will holding a door and saying thank-you be against your values? (We have a popcorn and pancake breakfast fundraiser during the popcorn season to help the scouts out a bit.) Usually by the direct contacting the parent helps but on occasion it doesn’t. When it doesn’t work the scout ends up quitting scouting. Personally I wish to see all kids in scouting but if they don’t want to learn and apply the scouting law and oath is there point of him in scouting?

I will say this: each scout who attends summer camp benefitis the whole troop. I would argue that, compared to the scout, the troop reaps a greater benefit from scouts being prepared to hike and camp independently with their mates.

This is probably more true for Troops, Crews, and Ships than Packs. Still, it’s something to consider.