Scouts-L Mail Archive for November of 1998: Re: Troop Accounts
Re: Troop Accounts
Bruce E. Cobern
Mon, 30 Nov 1998 18:47:40 -0500
At 07:24 AM 11/30/98 -0500, Drew Mrenna wrote:
>I need some wisdom from the group.
>About six boys left one unit and transferred into another. There was
>some personality conflicts within the leadership of the troop, so the
>transfer kept the boys in scouting.
>Here is the problem. Their old troop had set up "scout accounts". Each
>of these scouts had money in their accounts. They want the money to be
>transferred to their Scout Accounts in their new unit.
First, let me indicate that the first place to look for an answer is in
whatever rules the Troop has established or whatever understanding was
conveyed to the Scouts and their parents.
Second, to the extent that the money in the Scouts' accounts represents cash
that they deposited with the troop for use during their Scouting careers,
then I believe that is the Scouts' money and needs to be either returned or
Now, with respect to anything credited to a Scout's account because he
participated in fundraising, etc., I very strongly believe that, absent any
specific commitments to do otherwise, the money belongs to the TROOP (or CO)
and NOT to the Scout. There are several reasons.
First of all, as others have said, when people purchase the goods or use the
service provided by the fundraiser, their expectation is that they are
supporting the unit. If they knew that a portion of their purchase price
was going to be used (or could be used) by the Scouts to purchase baseball
gloves or bubble gum I don't believe they would be as willing to purchase.
Second, putting on my CPA hat here, when we give unconditionally credit a
particular individual with a certain dollar amount for each hour he works on
a project, or with a certain percentage of what he sells, then we are merely
paying wages or commissions. While I don't believe the IRS or anyone else
would ever actually come after a unit for doing so, there is no question in
my mind that this is compensation, pure and simple, reportable on a form W-2
or 1099, probably subject to tax withholding, etc. It probably would also
subject the Scouts to the state's labor laws, and might require that the
troop credit at least the minimum wage. Yes that sounds draconian, but, in
theory at least, I believe that is where you are if you "pay" the Scout
On the other hand, when there are enough strings attached, where the Scout
can never get direct possession of the money, must use it to defray Scouting
costs, etc., then I believe that the risk of forfeiting the money is enough
for it not to be considered compensation. (At least not until he actually
uses it.) Further, the expenditure of these funds by the charitable
organization (the troop) in furtherance of their program by helping to
subsidize particular Scouts is much more palatable to the "donating" public.
Third, for any unit that is a nonprofit organization, or is sponsored by one
(which is probably most), there is the risk that paying out cash to any of
the Scouts could jeopardize that status. One of the requirements for NPO
status is that none of the income of the organization inure to the benefit
of any particular individual. Again, I don't think subsidizing Scouting
activities (which are part of the charitable purpose of the NPO) would
jeopardize that status, but paying out cash, or spending the money on
unrelated things, certainly would.
Thus, I believe in Scout accounts. I believe that they should always
require a split of the "profits" between the Scout and the unit. I don't
believe the Scouts should ever get ALL of the money raised on ANY event. We
need to teach that when they work on the fundraiser they are working for the
good of the group, but that PART of the money will be divided amongst those
that work. Thus, they can see a benefit from their efforts, both by making
the group stronger and by easing their own costs and "earning their own
way." I further believe very strongly that it must be made clear that this
money does not BELONG to the Scout, but, rather belongs to the UNIT, but has
been made available for use by the Scout for certain specific reasons and
that if he leaves with a balance in his account, then the UNIT has the right
to use ITS funds for other purposes, and no longer has any obligation to
that particular Scout. Its sort of like Frequent Flyer Miles. If you earn
them on American, you can't use them on Delta.
Bruce E. Cobern