Student Accounts - Excel Spreadsheet

Thank you for the spreadsheet.

I live and work in Lexington, KY and the IRS is taking steps here against the local school's booster clubs.

Here is the article from the local newspaper:
http://www.kentucky.com/211/story/642131.html

Here is the convoluted IRS speak on this issue (from the article):
"The requirement that each parent/member of the club must participate in the fund-raising activities in direct proportion to the benefits they expect to receive toward their children's expenses directly benefits specific individuals and the parents instead of the class of children as a whole," she wrote.

This means that when we have parents work fundraisers like lunches, car washes, concession stands, etc. we can not pay their child's account (i.e. camp account) for the hours they worked. Each child participating in the activity the money was raised for (going to camp) gets an equal share.

Still confused:
Soooo, if Parent A works 1 hour, their child gets the same amount of $ from the fundraiser as Parent B that worked 100 hours.

More or less, even if parents don't work, they get an equal amount of $ from the fundraiser.

Another way to look at it is this:
If you have 10 students going to camp at $300 per student, then you need $3,000 for camp costs. You have a fundraiser and 5 of the students work the fundraiser and they raise $1500 (WOW!).

In the past, most youth ministries would say those 5 students have paid for their camp since they raised $1500 (5 students X $300 camp cost = $1500).

Now, the IRS says the money has to be equally divided. This means that the $1500 raise in this example has to be divided between all 10 students going to camp. Soooo, each student will actually receive $150 for their camp costs ($1500 split between 10 students = $150 per student).

Fair? Not in my opinion.

Personally, I think this is going to cut into the number of volunteers that we have at events. It makes the situation unfair for parents that need to "work" the fundraisers so their student can go to camp. It is also unfair to the parents that work everything -- they will now get less money than before.

Apparently, the repercussions are pretty substantial for the church as a whole -- from penalties by the IRS to the church losing it's non-profit status.

I have been told by a lawyer that churches will be affected by this in the future. The IRS seems to be focusing (at least in KY) on booster clubs and particularly the ones that use bingo halls to raise funds.

Sorry this is so long, just trying to be thorough.

a note on Thomas Riffey and tax laws. I was informed the same thing. When a group does a fund raiser, camp/mission trip, and individuals participate and the funds directly benefit the individual, the group raising the funds and the individual benefiting from the funds, enter into an employer/employee relationship. If the fund go into a general account for everyone participating in the trip and they all benefit equally, then it is not an employer/employee situation. Currently there are a couple of schools and non-profits being examined in Texas, in the metroplex area. Word is that Churches have not been targeted but that is in the near future. How far in the future? Who knows. But we were advised that once you know about some issue like this you are accountable. I am currently trying to determine how to address this in our student ministry.

Here is a way around it. If you raise X dollars via fundraiser, then just "divide" the funds up and "place" them in the participant youth's "account." This does not have to be somthing that is kept as an official record in the office. As long as the youth pastor/director/worker knows where the funds are being designated, then all the finanical secretary/bookkeeper needs to know is which designated church account it goes in - not which kid it goes to.

I understand good record keeping is very helpful, but it seems we want to make it "official," and it should not. It's for "your eyes only" and not in connection with the official church "books." Keep it simple.

Maybe I was not clear in the purpose of this freebie. The purpose of this freebie is to offer you a simple way to keep track of who has paid for what. In my case, I have well over a hundred students who pay for various things throughout the year. I also have multiple fundraisers for camp, mission trip, etc (in which not all students are involved in). So I use this form to keep track of which students have paid for which events and when we do a fundraiser it is for the entire group (the group who is working the fundraiser). We then "deposit" that into their "accounts" if you will. Our financial secretary is the one who make deposits and enters everything in the system. This sheet is a guide that you can use to quickly look up who has and has not paid for the event that you are promoting. Hope that clears that up.

The one thing my pastor has set up is that we do not collect money from the youth. The students pay their money directly into the offering and the treasurer keeps track of this. This is because he was involved in a youth group where the youth pastor collected x amount for tickets to an event. Well the ticket stated it only cost z amount which was less than the youth pastor collected. Well it turned into an issue with many of the parents. The one thing they did not take into consideration is the fees for the tickets.

My pastor also says that the treasurer can keep better track of what is going in and out of the youth department and it takes the responsiblity off of us if something is lost, missing or stolen. Just a thought. Glenn

Just a good way to keep up with Camp $$ etc.. Thanks for the freebie!!

That doesn't make much sense logically.
The youth are not employees subject to wage laws, withholding, etc.
Why would an accounting practice of tracking which donation belongs in which account change their status or somehow turn donations into wages?

Can't see how that would be. We are not an "employer." School groups do this all the time (tracking individual kids' fundraising for trips and events) and I'm sure they have to abide by tax laws. I do know our tax guy warned me against writing thank you letters (for tax purposes)mentioning specific kids' names on donations (to the church) for mission trips, etc. As long as you say thank you for donations to our "mission team fund" (and not "on behalf of Sally Johnson"), it's considered a tax deductible contribution for the donor.

Hey, question for you, or maybe heads up? I was told the other day that apparently if you track individual youth deposits etc for youth money that when you do a fundraiser, as a non-profit you are required to meet minimum wage laws and you have to pay taxes on their earnings. Apparently the only way to raise money is to raise money for "the whole group."

anyone know a way to get around this? or are we just up a creek?