National Charity League, Inc Fundraising Policy

Transcription

1 National Charity League, Inc Fundraising Policy Introduction As 501 (c) (3) organizations, NCL Chapters are legally permitted to accept donations from their members as well as from sources outside of the Chapter. The primary mission of NCL, Inc. is mothers and daughters serving communities together however soliciting and accepting donations is permissible and perhaps essential to maintaining a robust Chapter and planning for long-term sustainability. It is also an effective way to collaborate in the local community and develop supporters who believe in the NCL mission and the Chapter s good works. Fundraising will assist in building local NCL brand awareness. Policy Any Chapter that has been incorporated and has received its federal and state tax exemption status may fundraise to support Chapter programming that clearly fulfills the NCL Mission. Fundraising includes receipt of non-restricted cash gifts, restricted cash gifts and in-kind contributions of products or services, sponsorships and underwriting. All NCL, IRS and State fundraising guidelines must be followed. Chapters engaging in significant fundraising should seek the advice of a CPA to insure compliance with all tax regulations. Fundraising is an optional chapter activity. IMPORTANT NOTES: This policy eliminates the distinction between fundraising within the Chapter and fundraising in the community, and brings us in line with the IRS and nonprofit industry standards of Restricted and Unrestricted Funds. It also eliminates the need for a separate philanthropy fund, although Chapters are welcome to continue that practice if they so choose. NCL is not licensed to practice law or accountancy, and nothing contained in this or any document is to be construed to be legal or accounting advice. Chapter leaders are encouraged to seek counsel of an attorney or accountant licensed to practice in the Chapter s state to obtain legal or accounting advice. National Charity League, Inc 1/5 Revised February 2010

2 Fundraising Guidelines Many members join NCL because of its history of hands-on volunteer efforts in the local community and they do not want to engage in fundraising efforts. If a chapter decides to fundraise outside their membership, then the following guidelines must be followed. The Patroness members in each chapter should approve all chapter fundraising efforts on an annual basis by event. This shall be a vote of the Board and general membership and must include dollar fundraising goals for each event and the approved use of the funds. Members should insure that funds raised from the public and used for Chapter activities are reasonable and meet the public s expectations for nonprofit organizations. Chapter programs suitable for funding by external sources are those Chapter Patroness (including Sustainer) activities and Ticktocker Six Year Plan components that support the NCL mission to foster mother-daughter relationships in a philanthropic organization committed to community service, leadership development and cultural experiences. All Chapter Fundraising materials should clearly state how the donations would be used. Some examples are: o Funds donated to event will be used to support NCL Chapter xyz Ticktocker Leadership program o Funds donated to event will support NCL Chapter xyz philanthropies (add names) o Funds donated will support NCL Chapter xyz chapter activities and philanthropies. All Chapter events, including Senior Recognition/Presentation/Ball, must be selfsupporting. Fundraising to support Mission based elements of the event shall be tracked as restricted donations and acknowledged per IRS regulations. Those portions of Chapter events that directly enhance Mission based programming may be supported through external fundraising, i.e.: speaker, invitations, printed program that highlights Chapter activities, video/audio presentation of Chapter or grade level volunteer activities, philanthropy hands-on activity, etc. Those portions of Chapter events that do not enhance the Mission based programming must be covered through event ticket costs, i.e.: food/beverage, special effect lighting, entertainment, theme décor, etc. All Chapter documents must be current and accurate so as to fulfill the Chapter s legal responsibility as a registered non-profit. Current and clear Bylaws, up to date financial records, timely and accurate tax filings, and Chapter Board of Director and Regular membership meeting records are the basis and the expectation of a well-run non-profit corporation. All fundraising activities shall be promoted as such and all IRS rules for disclosure shall be followed. At the time of solicitation, donors must be informed as to the intended use of the funds; and when donors place restrictions on funds, these must be honored, tracked and reported. All donations over $75 must be acknowledged in writing to the donor per IRS publication National Charity League, Inc 2/5 Revised February 2010

3 Chapters may not affiliate with or act as an agent of other organizations when fundraising. Collecting goods donations for local food banks or clothing donations for community based volunteer agencies is acceptable. Clarification: It is acceptable for a Chapter to solicit goods for local food banks or shelters under the name of NCL (standing in front of a store wearing NCL Chapter t-shirts with the NCL banner proudly displayed). The Chapter takes possession of the goods and the Chapter makes the ultimate donation to the philanthropy partner. Marketing efforts to the public during and after the solicitation should indicate NCL, Inc. XYZ Chapter supporting charities in the community, etc, etc. The NCL Chapter organizes, manages and staffs the drive and takes control of the messaging and the goods. Chapter should clearly communicate to donors that the donation is TO NCL, Inc. XYZ Chapter and the beneficiary is ABC philanthropy. A word of caution: do not provide donor a receipt that indicates a dollar value of contributions. The IRS places responsibility for valuing donations upon the donor for the donor s tax filing. Document the total of in-kind donations that the Chapter gives to the philanthropy. CAUTION - If Chapter is asked to work for a shelter or food bank at their drive, wearing either NCL or the philanthropy identification, asking for donations to the charity and representing themselves as an agent of the other organization, there is a potential problem with violating IRS regulations on acting as a fundraising agent. Understand the distinction and make sure documents, marketing, record keeping and reporting is clear. No chapter shall engage in revenue sharing with any Non-NCL entity. Revenue Sharing is when a ticket is sold for a fundraising event for philanthropy A and nonprofit B is helping to sell the tickets with a portion of the proceeds is given to the selling nonprofit B. Expansion Chapters without federal and state tax exemptions may not engage in fundraising nor participate in any type of solicitation from non-members. Chapters without Federal and state tax-exempt status may accept non-solicited donations of moneys, good or services. Such items are not tax deductible as a charitable donation by the donor because those Chapters are not 501(c) 3 organizations. This shall be made known to the donor in writing prior to such donation and also stated in any acknowledgement made to the donor. Definitions and Disclaimers Restricted funds are when a donor puts a temporary or permanent limit on the use of the funds. A temporary restriction can be met either with the passage of time of by the purpose being fulfilled, while a permanent restriction never expires and cannot be removed. Most donations received by NCL are unrestricted or temporarily restricted. Examples of temporary restrictions would be funds donated for a specific event or purchase. Permanent restrictions would be for endowment funds where the original donation is invested and the proceeds used to support a designated event, building or program. Unrestricted donations are funds that the donor did not place any restrictions on the use of the funds, or were solicited by the chapter to support/fund generic Chapter Activities or the activities of XYZ NCL Chapter National Charity League, Inc 3/5 Revised February 2010

4 Chapters existing Philanthropy Funds are considered Temporarily Restricted to their original purpose of providing cash or goods to the Chapter s designated philanthropy. In-kind Donations In-kind donations are non-cash gifts of materials, services or long-lived assets that can be used to support the NCL chapter or mission. Examples could be a computer for chapter record keeping or the donation of website support services. The value of Inkind donations should be estimated by the donor and should be reflected on the Chapters financial records in the appropriate category. Most NCL chapters collect incidental goods (food, diapers, used clothing) that are passed on to local non-profits. These items do not need to be accounted for as donations to NCL. These can be delivered to the local agency and will be considered donations to the agency. (NCL chapters should provide their members with a record of the donation. See forms.) Self-Supporting Events The NCL, Inc Board would like to caution all chapters engaged in external fundraising to be very careful to insure that funds are raised only to support the mission based elements of our program. Many events have components that are social in nature and these elements should be funded by ticket sales or member contributions. Please exercise your best judgment when planning events and any associated fundraisers to make sure that the public s trust and confidence in our organization is not negatively impacted. Please ask yourself What message is this request sending to our community? If there is any doubt in your mind, please find another way to fund the activity. Chapter expenses eligible to be supported by fundraising are the Mission-based elements of the Six-Year Plan and core Patroness Activities. Program: TT Officer Training Patroness Officer Training Leadership and Philanthropy focused Speakers (both TT and Patroness) Operational Costs such as Website Newsletter Meeting Space Directory costs Chapter Insurance Safety Box Rental Professional Accounting/Legal fees Underwriting and Sponsorships refer to financial contributions made (usually from a corporation) in support of specific programming or event. If the corporation recognition falls under the IRS s definition of advertising then the sponsorship income may become taxable as unrelated business income. There are a variety of ways to acknowledge the sponsorship or underwriting donations without having to pay the unrelated business tax. Chapters should consult with a CPA to understand the tax implications if they engage in this form of fundraising. National Charity League, Inc 4/5 Revised February 2010

5 Cultural Events - Although our Ticktocker Six-Year Plan requires attendance at a cultural event each year, it is not acceptable to raise funds to pay for member tickets to a cultural event since, under the IRS rules members may not financially benefit from their association with an organization. Programs/Tribute Journals Congratulatory messages in a book or program are acceptable methods to raise funds. Messages may include a congratulatory message, the supporters name, phone/website, etc. However, any appearance that resembles an ad or advertising will trigger the need for the chapter to report Unrelated Business Income and pay tax on that income. The program cannot encourage the support or patronage of the various supporters. Dinner Night outs, product/boutique sales and Department Store Philanthropy Days These are a popular method for members to support a local business that then donates a certain percentage of the purchases back to the organization. This is an acceptable method for a chapter to raise funds for chapter expenses or NCL Philanthropy donations. National Charity League, Inc 5/5 Revised February 2010