Business Practices

Fundraising and Finance: The school–volunteer relationship.

School fundraising is a multibillion-dollar business operated by volunteer parents who may have no experience setting up and managing a tax-exempt charitable organization. Schools provide varying degrees of support to these booster clubs, but few school administrators have experience in dealing with tax-exempt charities.

Despite the fact that booster clubs are separate legal entities, schools inadvertently take on liability for their actions when they implement policies that require the school principal to review and approve the booster club budget.

What can be done to clean up the often-messy, always-complicated school–volunteer fundraising group relationship? It’s quite simple if you follow just two rules: (1) understand who is responsible for specific activities and (2) have the responsible group pay its own bills.

Who Is Responsible?

Clearly, the school is in charge when it comes to overseeing academics, hiring teachers, selecting the curriculum, and setting the school calendar. However, responsibility gets murkier with regard to extracurricular activities like sports, bands, and clubs.

Follow the funding to find the answer to the question about responsibility. Because schools typically hire the band director and athletic coaches and have other budgeted funds to support their activities, the school is the sponsor and responsible party for the band and sports teams.

However, the school may provide no funding for the debate team or robotics club. The school may allow the English teacher to advise the debate team and the science teacher to advise the robotics club. The teams may be allowed to meet in classrooms after school. But the teachers receive no compensation for their assistance, and the teams must raise the money to purchase supplies and enter competitions. Their boosters or fundraisers sponsor their activities and are thus the responsible party.

Who Pays the Bills?

Once you identify the responsible party, you know who should contract for services, make purchases, and pay the bills.

Because the band and football team are school activities, the school should contract and pay for uniforms and equipment, hire and pay the directors and coaches, and pay for transportation, housing, and the like. The boosters who support the band and football team raise money and donate the cash (make a grant) to the school, which is paying the bills.

The boosters are the sponsors of nonschool activities, like the robotics club and debate team. The school provides no funding, so the boosters purchase the supplies and pay the costs of participating in competitions and other events. They are responsible for the bills.

On the Other Hand

There are some exceptions. I learned recently that in many of Alaska’s school districts, for example, although the school district sponsors sports teams, it relies on booster clubs to raise the funds for, contract for, and purchase team uniforms and helmets.

A Florida high school booster club treasurer sought my advice on how to handle a bill for football helmet refurbishment. The football coach signed a contract for helmet refurbishment in the name of the booster club. The boosters did not know about the contract until they were billed for several thousand dollars. The boosters had not budgeted for the refurbishment and did not have the funds to pay for it. The refurbishment company was threatening legal action.

The treasurer also learned that the coach routinely signed booster club checks even though he was not an authorized signer on the bank account. The treasurer asked whether the boosters or the school that hired and paid the coach was responsible for the bill. The problem arose because the responsible party—the school sponsoring the team—had not contracted for a needed service.

See how murky it can get?

How Do We Fix It?

Raising money to subsidize stretched school budgets is a key reason fundraising groups are cropping up. The problem isn’t the fundraising—it’s ensuring the responsible party pays the bills.

Before planning activities and events, answer three questions:

  • Is this a school activity or a booster activity?
  • Is this an academic (graded) activity or an optional activity?
  • Does the school have standard procedures for purchasing this?

The answers will help determine whether it’s a school or booster activity and who is responsible for contracts and payment. The best practice is for the fundraising group to act as a grantor and give the money it raises to the school as the grantee.

—This article is excerpted from the November 2017 issue of School Business Affairs, published by the Association of School Business Officials International. www.asbointl.org.

This article originally appeared in the January 2018 issue of School Planning & Management.

About the Author

Sandra Pfau Englund, Esq., is executive director of Parent Booster USA, based in Winter Garden, Fla.

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