4-H Fundraising Process
4-H fundraising is defined as any event or activity where the 4-H club or affiliated 4-H organization intends to raise additional funds through solicitation (funds and/or items), charging admission to a fundraising event, soliciting sponsorships for a 4-H event, or selling products or services. This excludes collecting 4-H club fees or dues that are collected and spent for club operations and are de minimis in nature. This includes fundraisers that may benefit the 4-H club or other affiliated 4-H organizations, other charitable groups, or an individual.
Only 4-H Clubs or affiliated 4-H organizations that have been pre-approved by completing the Application to Raise Funds through the USU Advancement Office, at least ten days before to the day of the fundraiser, will be allowed to fundraise. Each 4-H Club or affiliated 4-H organization are encouraged to hold one yearly fundraiser. If the fundraiser is ongoing or happening more than once in the school year and you are charging admission or selling items, you will be required to collect sales tax on the sales of all goods and services. Contact your Financial Officer for directions on how this should be done.
4-H fundraising is divided into two classifications 1. Charitable Fundraising and 2. Non-Charitable Fundraising. The Application to Raise Funds process will determine the classification for your fundraiser. Applications must be completed and approved for each fundraiser, unless the event is for the same fundraiser that happens on a regular basis. For example, if the 4-H club plans to sell items every Tuesday at a table outside the arena at the fairgrounds, only one application is necessary. For multi-day fundraising, the 4-H club or organization will need to supply an end date.
Receiving a tax-deductible gift receipt for a donation is often referred to as a charitable contribution by the IRS. Charitable contributions can be in the form of cash, check, credit card or personal property. The contribution must be made voluntarily and made without getting or expecting to get, anything of equal value. Charitable contributions received will generate a gift receipt issued by the USU Advancement Office that substantiate a donor’s charitable contribution that can then be used for tax purposes.
Sponsorships are a gift of cash from a business to support a 4-H event. Sponsorships fall under the Charitable Fundraising classification. Because the University is required to pay Federal income tax on net income from advertising, it is important that the sponsorship be structured as a qualified sponsorship and not taxable advertising.
The IRS has created guidelines to help distinguish between sponsorship and advertising.
Sponsorship:
- Mention of location, phone number, website.
- Value-neutral descriptions, including displays or visual depictions, of the sponsor’s product line or services.
- Displays of brand or trade names and product or service listings.
- Logos or slogans that are an established part of the sponsor’s identity.
- Mere display or distribution (free or at a cost) of the sponsor’s product at a sponsored activity.
Advertising:
- Qualitative or comparative language.
- Price information or other indications of savings or value.
- An endorsement or inducement to purchase, sell, or use the sponsor’s service, facility, or product.
- A single message containing advertising and acknowledgement is considered 100% advertising.
- Payments that are contingent on the level of attendance at events, broadcast ratings or other factors indicating the degree of public exposure.
- The right to limit distribution of competing products or services in connection with the payment.
4-H clubs receiving advertising revenue shall work with your Business Manager to report revenue amounts to the Controller’s Office. Net income from advertising will be taxed at regular corporate rates and charged back to the 4-H club.
Information about handling and depositing Charitable Contributions can be found on the 4-H Web page under Section 7 of the Program Guide under the title Extension and 4-H Charitable Donations Handling Policy. https://extension.usu.edu/utah4h/staff-resources.
For assistance with a charitable contribution please contact the USU Extension Development Officer assigned to 4-H, Michelle Merrill at michelle.merrill@usu.edu.
This is where the 4-H Club or 4-H affiliated organization is fundraising for the 4-H organization but the fundraising activity does not qualify to receive charitable contributions status.
Category 1 type fundraisers are typically initiated by a 4-H club or affiliated organization like the teen council or project ambassadors. These funds are raised to support the 4-H program. A 4-H club may do a fundraiser to buy needed equipment or money for a 4-H camp fund.
Category 1 fundraisers can be further divided into two types of fundraisers. 1. Ledger Ready and 2. Non-Leger ready.
Ledger Ready Fundraisers – These are fundraisers where an accounting of the goods and/or services can be tracked, by the person participating in the fundraiser submitting a log of sales. For example, a county 4-H Club that is selling potatoes can easily create a log of sales with the name of the person buying the potatoes, how many bags were purchased, at what price and the total amount paid. This log of sales can be used for reconciliation.
Non-Leger Ready Fundraiser - These are fundraiser where it is not reasonable to track the sales of good or services with a receipt book or log of sales. For example if a teen council is selling food at the county fair it is not reasonable to write a receipt or log every sale.
All Category 1 Fundraiser must:
Obtain pre-approval through the USU Advancement Office by completing the Application to Raise Funds.
Must have a pre-determined and approved purpose for the funds.
Must have a pre-determined USU Banner Index
Must be familiar with USU Cash Handling Policy 530 at https://www.usu.edu/policies/530/ and complete the following:
- Request and be authorized for an approved method of payment = Ledger Ready or Non-Ledger Ready process.
- Identify Banner index for revenue and payment fees and reconciliation procedures.
All employees and volunteers that handle cash, credit card or e-commerce devices, must annually participate in USU’s Cash and Credit Card Handling Training. The online training can be found at https://captivateprime.adobe.com/app/learner?accountId=1538#/course/517964
4-H Club members will be required to read and sign the Cash Handling Training for 4-H Club Members. This document provides club members with basic training on cash handling procedures and teaches them life skills. In addition, this form protects the youth, volunteers, staff and Utah State University from fraud, theft, and misuse of university funds. Signed forms will be kept at the local 4-H office. Identify money flow and reconciliation process.
For Ledger Ready Fundraisers. – Submit a ledger or log of sales that includes the following information: Name of the 4-H member, Name of the purchaser(s), item description, quantity, cost per item, total amount paid. The 4-H Coordinator will then verify and combine all sales of club members for the deposit.
For Non-Ledger Ready Fundraisers - Daily revenue total shall be counted and verified by at least two individuals and deposited within 3 days. In an effort to reduce the number of non-ledger fundraiser, a rental of a First Data Clover Mini credit card reader device is encouraged for Non-Ledger Ready fundraisers. When possible eliminate cash transactions. Link for rental details - https://www.usu.edu/controllers/credit-card-acceptance/machine-rental-program
Non-Ledger Ready Fundraisers may need to request a Change Fund. See Cash Handling Procedures https://www.usu.edu/controllers/cash-handling-procedures To obtain the Change Fund Request, complete the form found on the Controller’s web site. https://www.usu.edu/controllers/forms
Send the completed and signed form to Rachel Hansen, Business Services Manager, at Rachel.hansen@usu.edu who will then route it to Shanell Johnson, Manager of Treasury Services. Upon approval, Treasury Services will contact the custodian.
At least one USU employee will be a part of the reconciliation process.This is where the 4-H club or 4-H affiliated organization raises money for an outside organization such as the Utah Junior Livestock Association, Food Bank, Hospital or any other local organization.
Category 2 fundraisers are fundraisers conducted for the benefit of an organizations other than USU or 4-H.
All Category 2 fundraisers must:
Obtain pre-approval through the USU Advancement Office by completing the Application to Raise Funds.
Must make it clear the fundraiser is not raising funds for USU nor give the impression the donation is tax-deductible
Must not use the university’s tax-exempt status in organizing or operating the fundraiser
Must not deposit the funds into a university account.
Must instruct donors to make checks out directly to the charity organization. If cash is collected, at the end of the event the 4-H Coordinator/volunteer or other responsible party will take the cash and turn it into a cashier’s check or money order written to the charity. The 4-H Coordinator/volunteer or responsible party will make sure the check is sent to the charity.
The 4-H Coordinator/volunteer or other responsible party must be responsible for all costs incurred in connection with the fundraising activity.
The charitable organization must be responsible for ensuring that its activities comply with all applicable local, state and federal laws.
This is where the 4-H clubs or affiliated 4-H organizations raise fund for an individual.
4-H clubs or affiliated 4-H organizations that are fundraising where an individual is the beneficiary
All Category 3 fundraisers must:
Obtain pre-approval through the USU Advancement Office by completing the Application to Raise Funds.
Must make it clear the fundraiser is not raising funds for USU nor give the impression the donation is tax-deductible
Must not use the university’s tax-exempt status in organizing or operating the fundraiser
Must not deposit the funds into a university account.
Must instruct donors to make checks out directly to the individual. If cash is collected, at the end of the event the 4-H Coordinator/volunteer or other responsible party will take the cash and turn it into a cashier’s check or money order written to the individual. The 4-H Coordinator/volunteer or responsible party will make sure the check is sent to the individual.
The 4-H Coordinator/volunteer or other responsible party must be responsible for all costs incurred in connection with the fundraising activity.
The individual must be responsible for ensuring that its activities comply with all applicable local, state and federal laws.