Pack Budget Plan Worksheet (Excel)

How are we going to pay for everything?

Popcorn Sale

Our council’s annual Fall Popcorn sale provides a great opportunity to raise all of the money your unit needs for its annual program. You can’t make more money per each hour of time spent selling like you can with the popcorn sale. Any unsold inventory you have may be returned to our council (by a certain date) at no cost to you.

The sale is approved by our council’s Executive Board, meaning that your Scouts can wear their Scout uniform while selling (this is not true for any other fundraiser). You do not need to fill out a unit money earning application to participate in the popcorn sale. Just let your District Popcorn “Kernel” (a volunteer who runs the popcorn sale in your district) or your District Executive (the BSA professional employee responsible for serving units in your district) that you want to participate in the popcorn sale, and they’ll tell you when training will take place and give you everything you need to take part.

Unit Money Earning Guidelines

If your unit chooses to raise money in a way other than selling popcorn, you must submit a Unit Money Earning Application to your district’s Fundraising Chairman (this is a volunteer like you) or District Executive (this is the BSA professional employee who serves units in your district).

Unit Money Earning Guidelines Form

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.

• Charter Organization Units: Contact your charter organization for permission to use their EIN and direction on who to use as the responsible party.

EIN or Tax ID Number Application

Most banks require an EIN (Employer Identification Number) to open an organizational account. EIN Instructions

“Scout Accounts” and “Individual Benefit”

The Internal Revenue Service (IRS) says if you are going to raise money as a nonprofit group, the group must benefit from the money you raise. So, if one Scout sells $500 of popcorn in your unit sale and another Scout sells $100 in your unit sale, both Scouts must benefit equally. That may sound a little backwards but that is the general definition of the IRS’ policy concerning what’s called an “individual benefit” within nonprofit fundraising.

Some units deal with this by raising money for specific items or ideas that benefit the entire unit: buying new tents that everyone will have the chance to use, paying for every Scout to go to Day Camp, etc.

You may hear some leaders talk about having “Scout accounts” for each youth member in their unit within their overall unit account. This idea goes back to a time before this IRS focus on “individual benefit”. Basically, a unit would keep track of how much each Scout earned through fundraising or allowance or working a job and allow each Scout to apply those funds how they wished (pay for camp, buy a new backpack from the Scout Shop, etc.). The idea of a “Scout account” is still OK under BSA rules, so long as the way it is managed doesn’t violate IRS rules.

Clear as mud? Here’s how BSA’s Steve McGowan explained this idea, during a 2014 interview with Scouting Magazine:

“An example would be if a Scout is part of a unit, and the unit raises money to offset the costs of Scouting for the entire unit. Nothing wrong with that. If they use it as a means to pay down the cost for the unit and each member to go to summer camp, nothing wrong with that.

On the other hand, when you move over to the other side, and a Scout goes out and sells a lot of popcorn, and the unit designates that money that he raises to be used only for that Scout and only for activities that benefit that Scout, we get into an issue of whether or not the IRS would consider that to be a substantial private benefit.

The IRS isn’t going to go after the typical young Cub Scout that’s selling popcorn, and it helps to pay for his uniforms or helps to pay for his summer camp. But to the extent we have people that are raising significant funds, and those funds are being used for costs that would normally be parental obligations in connection with Scouting, we’re getting into an area where the IRS has been and is paying more attention.”  

BSA has never allowed individual Scout accounts which provide for “substantial benefit”, which is the IRS term for what is prohibited, but we have allowed Scouts to have accounts which would make them more thrifty, make them more understanding of what does it mean to set goals and achieve goals and to earn their way. That’s been part of the Scouting way for many years and to the extent that the Scout is using fundraising to accomplish Scouting goals, then the IRS says that may be more allowable than when they’re simply out raising money for their own benefit.

Frequently Asked Finance Questions

Is there a recommended process for budget building?

Yes, make a list of expenses and assign a cost to each item. Use last year’s expenses (e.g,. awards, advancement, recognition, trips, entry fees, registration fees, Boys’ Life magazine, insurance, handbooks, neckerchiefs, unit numerals, financial assistance, training fees for youth and adults, program materials, equipment replacement) itemize all costs and add the total. It is often helpful to view expenses in terms of cost per youth member.

How do we earn money for our unit?

You can earn all the money you need for your budget by taking part in our council’s Fall Popcorn sale. Just let your District Popcorn “Kernel” (a volunteer who runs the popcorn sale in your district) or your District Executive (the BSA professional employee responsible for serving units in your district) that you want to participate in the popcorn sale, and they’ll tell you when training will take place and give you everything you need to take part.

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.

Can a unit (pack, troop, crew, ship, post) solicit funds?

Soliciting funds from within the unit is acceptable, but no other solicitation is allowed.

Can a unit use PayPal or Venmo to accept unit payments?

Yes. PayPal account instructions are available here: https://help.scoutbook.scouting.org/knowledge-base/paypal-payment-utility-sb/.

• NOTE: As of January 1, 2022, the IRS introduced new reporting requirements for payments received for goods and services, lowering the threshold to $600. Third party settlement organizations, such as PayPal and Venmo, will be required to provide customers with a 1099-K form if they receive $600 or more in goods and services transactions during the 2022 tax year. Charter Organization Units and Council Registered Units utilizing PayPal or Venmo should ensure they are using appropriate EINs and following all policies and procedures.

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 Illowa Council in contractual agreements

Which units must complete a Unit Money-Earning Application form?

Any unit engaging in non-council money-earning efforts with the sale of goods or services must file.

Does the Illowa Council offer financial assistance for Scouts BSA summer camp?

Camperships enable Scouts to have a summer camp experience who, because of financial needs, could not otherwise attend. Limited financial assistance is available on an individual basis for those Scouts who cannot attend Summer Camp without this help. Units should submit individual applications to program services on or before April 15. Campership funds are administered by the Council Camping Committee. Scouts should be responsible for earning at least a portion of the camp fee. The maximum funding from camping assistance (campership) is one half the total of the camp fee. Note: Council camperships are for Illowa Council camps only.

Does our unit have to pay state sales tax on purchases made solely for the use of our unit?

Most purchases made exclusively for unit usage can be claimed to be exempt from state sales tax. Use the State Sales Tax Exemption Certification. This works for most merchants but not all; for example, you will not be able to use this form at a Sam’s Club unless the membership is set up in the name of your unit. If you find retailers demanding something more than the Tax Exemption Certification, use the tax letter for troops.

Is our individual Scout unit a charitable organization?

No. Chartered partners are often charitable, but units are not automatically subordinated to share the same status.

What is the IRS Form 990-N, and does our unit need to file annually with the IRS the electronic postcard 990-N?

In 2008, the IRS introduced a new, abbreviated filing for small tax-exempt organizations with annual gross receipt of less than $25,000 (this amount was later raised to $50,000): Form 990-N. The BSA national office consulted with the IRS and outside counsel, as to whether this new filing requirement applies to Cub Scout Packs, Scouts BSA Troops, Venturing Crews, and other units. In their opinion, most Scout units do not have to file the new Form 990-N. For most units, no filing is required. The only exception is for the very small number of units that have filed for separate, federal tax-exempt status under Section 501(c)(3) of the Internal Revenue Code. Those units must file either Form 990-N (if their annual gross receipts were less than $50,000) or the more detailed Form 990 or 990EZ (if annual gross receipts were $50,000 or more).

Can our Scout unit 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. Packs, troops, and other Scout units cannot be included under the BSA group exemption because they belong to their chartered organization. (Note: tax issues for Girl Scout troops are handled differently by the IRS because of how their cookie sales are structured).

Is it all right if our unit solicits companies, foundations, or individuals?

No. There is no provision in the BSA’s Unit Money Earning Guidelines for this kind of solicitation.

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.

How can Eagle Scouts raise money to fund their project?

Eagle Scout projects cannot be a fundraiser, but Eagle Scout candidates fundraise or earn money in order to secure materials to be used for a project. Eagle Scout candidates should work with the organization for which they are rendering service and ask what funds are available for the project. If candidates opt to solicit they will need to use the tax ID number from the organization for which they perform service.

Should our chartering organization consider insuring unit equipment?

It is suggested (though not required) that your chartering organization insure unit 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.

What happens to 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.

Can we use our EIN for purposes other than checking account identification?

No.