I understand that Beavah, but nobody ever addresses my point.
How can a scout get a $200 gift card from the offical BSA program that he can use at WalMart or Amazon to buy whatever he wants in a solely personal purchase and that is ok, but when the unit offers an additional monetary incentive to increase sales, that is not ok?
My question is as simple as that.
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- Mar 2008
Well I will tell you that if we did away with scout accounts fund raising for our group would come to a complete stop.
While in theory my parents understand the importance, it is the entire going door to door or wasting an entire fall Weekend in front of a store.
There must be a solution of some sort.
I completely agree with you...beyond the legality issues..why do we keep trying to justify it?
As to the questions about the incentives...incentives work differently and are evenly distributed AND come from Trail's End...a for profit company!!! To my knowledge, and I have researched this extensively, incentives are not from BSA but from trail;s End.
here is a link. http://www.kintera.org/atf/cf/%7BE843D69F-BAF5-40AD-8006-A9A1D6BA11DC%7D/PRIVATE%20BENEFIT%20MEMO.PDF
This is an internal BSA memo from the Tax attorney at national. I actually spoke with him directly and he says that BSA does NOT support this practice. On the last page of the document it is very clear.
I know some say that fundraising would stop if this practice went away, but I think if handled right it would increase....simply because now if you have the money you don't have to fundraise...however, if the boys were depending on each other they may step up and learn that there are benefits to helping out the community of scouting!!
Due to my concern of this issue, I had to find out where your letter came from...lol The letter you mentioned seems to be part of a publication that was put out last year and here is the link...
Seems National has already made a declaration of this last year...hmmm
Thank you for the link.
It looks like maintaining individual Scout accounts risks the non-profit status of both the council and the sponsoring organization.
The easy answer for them would be to just kick-out our unit altogether
... beyond the legality issues..why do we keep trying to justify it?
Because there is something that sounds right about individual responsibility.
That is, if you, Jack scout, raise funds for this organization, then you, Jack scout, has the right to allocate some of those funds for the needs of the organization.
Note that our units' cultures are such that equipment, gear, uniforms, etc ... get handed down to new members of our units.
If that did not happen, I assure you, many venturers in our community would never try backpacking. The up-front expense would be too much for a firs-timer.
In fact, a scout that shows up prepared for a trip, (gear ready, properly uniformed, fees paid) provides an essential service to our community. Will that scout be able to write off his expenses (gear, uniforms, and fees) if his fund-raising is treated as income?
- Nov 2009
"This is an internal BSA memo from the Tax attorney at national. I actually spoke with him directly and he says that BSA does NOT support this practice. "
Nah, I think that's a load of BS. If National really didn't support or like that Trail's End gave out incentives...they would stop it.
Now in our council, not only will you get a gift card(s) from Trails End and that Disc shooter - but our council will give you a dic shooter and similar gifts cards of a different value for exceding the goals during Blitz week. Then after all is said or done, a drawing is held amongst the top seller for a portable dvd tv or i-pod touch or MP3 player.
Then the top seller of each unit ( who meets the base $$ amount) gets invited to an outing at a local putt putt/arcade/go cart track/ lazer tag/pizza joint.
And that's council, not Trail's End putting that on.
Dang it this is maddening and confusing!!!!!!!
I don't know if it's the majority, but certainly a large number of units offer some kind of individual account incentive.
There is a course at an upcoming university of scouting in our district on how to properly handle scout accounts. I don't have the syllabus but the implication is how to handle accounts properly from an administrative standpoint, not whether or not they are allowable. I'll sign up for that session for sure.
We all want to do the right thing out there. Personally I have no problems with them for the reasons I've already stated--they are another form of incentive that serves to increase proceeds to the unit. But if these are not allowable they certainly seem to be treated with a wink and a nod by the powers that be!!!!
For those that haven't bothered to go to the link Scoutmom posted:
"The creation of individual youth accounts within the unit is not permitted under the BSA
National Bylaws and Rules and Regulations. Where a portion of the money that an
individual Scout raises during a fundraising event is reserved for his use alone, it may not
be compatible with continued tax exemption of the local council. The creation of individual
youth accounts within the unit is not an incidental private benefit to the BSAs primary
Qualitatively, the creation of individual youth accounts within the unit is not a primary
activity to accomplish one or more of the exempt purposes of the BSA. It does not benefit
the public as a whole. Quantitatively, the benefits from individual accounts are substantial
and direct. The BSA has not met its burden of proof to establish that it is not organized or
operated for the benefit of private interests related to the creation of individual youth
accounts within the unit."
The Trail's End popcorn factory is not owned by the BSA. Trails' End is only one product of the Weaver Popcorn Company - a global marketeer.
Weaver partnered (not in the legal sense of partnership) with the BSA to sell its popcorn on consignment. It can and does give motivational sales awards to the Scouts, as it can to any salesman. The award is not income. For instance, A Scout selling $250 gets a $10 giftcard. A Scout selling $300 still gets only $10. The giftcards are rewards for meeting certain sales goals, and, within reason, are more like gifts.
Individual Scout Accounts be different. The money is income to the unit. If some of the money is then passed on to the Scout, it becomes income to the Scout because it is not a fixed amount for meeting a certain goal but is more like pay by piece-rate (number of hours worked, a percentage of whatever dollars sold)
Anyway, this is how I view it. Old habits and customs die hard
- May 2005
"Sorry, that line of reasoning makes no sense to me."
Yeah, me neither. I think I know what I want to say, but am having trouble putting it into words.
Another try: Trail's End pays the Scouts as independent contractors. The pay is a WalMart gift card rather than something from the ScoutShop so National can maintain an arm's length with this fundraiser. If National paid the Scouts, and not Trail's End, and the pay was in Scout Shop stuff, then maybe National would be required to treat the Scouts as employees
General Tax Rules
Federal and state taxing authorities will expect their share of almost any compensation you give to your volunteers. In general, for tax purposes, you must treat payments to volunteers the same as payments to employees. Consequently, absent an exception from federal or state tax laws, you must withhold income taxes and FICA (Social Security and Medicare) contributions from the compensation you pay your volunteers. Living allowances, stipends, post-service benefits, and in-kind benefits are usually treated like wages.
The Internal Revenue Code contains a number of exceptions, discussed below, that exclude some items from tax. In addition, some federally funded programs provide exceptions in their legislation. Moreover, although volunteers may receive a taxable benefit, some may not earn enough during the year of service to owe any income tax. For example, although your program may award volunteers a $1,000 taxable living allowance, if these volunteers have no other earnings for the year, they escape income tax, since their income will be less than the minimum taxable amount. FICA must still be paid, however.
State tax rules generally follow the Internal Revenue Code with respect to definitions of "taxable income" and withholding requirements. (Many states start with the federal rules and merely add several modifications in the computation of the tax due.) Because state tax codes are not standardized, some may contain applicable exceptions that are beyond the scope of this booklet.
Likewise, uniforms required as a condition of employment and which are not suitable for everyday wear are not taxed.
Inexpensive items may be excludable from income as de minimis fringe benefits. This imprecise exception encompasses items such as holiday gifts, coffee and doughnuts, soft drinks, local telephone calls, and use of the copy machine. The more expensive the item, the less likely it is to qualify as de minimis, especially if given more than once.
In-kind benefits that do not qualify for a tax exemption must be assigned a dollar value for tax purposes. You will be responsible for determining the fair market value of the goods distributed and for withholding the tax from the volunteers' living allowance or other cash income. Generally, the fair market value of a benefit is the amount an individual would have to pay for the item at a local store or restaurant.
So, let's work on that "payment in kind" theme.
Suppose (instead of individual accounts) a unit takes a poll of what youth would like to purchase, purchases gear in the desired proportions, and loans out gear to a member contingent upon him/her having participated in unit fundraisers at some agreed-upon level. (The thinking here is that one is more likely to be a better steward if there is some "sweat equity" in the equipment.)
Is the value of the gear (depreciated by the time it is in the scout's possession) taxable? After all, to take Beav's argument to the extreme, the troop maintaining its own cache of tents/backpacks/helmets/ropes/dogsleds etc ... is depriving some outfitter somewhere of potential rental income.
Actually, maybe youth accounts are allowable if kept very small. I believe I read somewhere $100 per year. We do maintain youth accounts for summer camp fees (but not the personal equipment) based on participation in fundraisers and in troop's community service projects and conservation projects. Since no money changes hands, and since camping is one of the chief purposes of Scouting, we believe this is OK.
Since uniforms are necessary in Scouting, on earning the Scout badge we conduct a somewhat formal ceremony for the lad. The troop presents him with the uniform shirt, council patch and troop numerals. (On earning T'foot he receives neckerchief, belt, slide & socks as a gift from the troop. Whatever patrol he then joins presents him with his patrol patch). He is, of course, free to purchase his own uniform at any time, or go to the closet to see what used uniform parts exist. Since the uniform serves a distinct purpose in the program, and is not typical streetwear, it is not taxable to the Scout.
At the annual Christmas potluck, the troop provides smalls. One year every Scout received a Scout pocketknife. Other years the PLC chooses the gift for that year; an expensive item such as an internally framed pack would not be suitable due to the cost.
Scouts need more money without involving troop tax liability? Consider Rent-a-Scout