Now that many troops and packs are winding down the most active part of their program year and are looking forward to scaling back a bit over the summer, and as adult leadership and committee assignments often change, it’s a good idea to review how you do business, from a business standpoint.
While most Scouting units don’t fall in the “small business” category, they do tend to handle a fair amount of money during a typical year. For a Cub pack, registration and membership fees and other costs such as insignia can run upwards of $50 per year per Scout. Add in fundraising proceeds, family camp, Blue & Gold banquet, Pinewood Derby trophies and day camp, and you could hit $10,000 without much trouble. In a troop, this can skyrocket when you factor in equipment, camping and high adventure. A typical troop can run $25,000 or more through its checking account in a year’s time, and if the troop uses a system of Scout accounts, the amount of cash held in the bank can be substantial.
How, then, does a unit best maintain the safety and accountability of these funds?
You hear stories from time to time about how a pack treasurer or committee member absconded with all the loot and disappeared into the night. Sometimes these are acts of thievery, and in other cases it’s desperation where an individual is facing money troubles personally. Fortunately, these incidents are rare. Much more common are instances where checks don’t get deposited or written, payments get lost or are made twice, or someone racks up a bill that exceeds the budget. (Or, the unit doesn’t have a budget at all!)
Let’s review some basics:
- Unit monies typically come from, or are raised by, the families of Scouts.
- All unit property (including the bank account) belongs to the chartered organization.
- A Scout is Trustworthy and A Scout is Thrifty.
With these in mind, in the next series of articles I’ll offer a few recommendations for how a pack or troop should structure its finances and accountability. These have been compiled through the years in consultation with other committee chairs, CPAs and finance people, as well as BSA’s own guidelines.
The Unit Budget
The old saying goes Proper Prior Planning Prevents Poor Performance. In the financial sense, it means having a money road map for your unit. You should have an annual budget, prepared, approved, and put in place prior to your program year, and reviewed periodically to account for actual income and expenses. If the term budget brings to mind cutting spending to a minimum, thus becoming an impediment to program needs, think of it instead as an income and spending forecast. A Scout is Thrifty does not necessarily mean a Scout is stingy – it means he makes the best use of available resources.
- Define your budget year. For most Cub Scout packs, this will coincide with the program year, running from September to the following August. Since they usually operate continuously year-round, Boy Scout troops could also follow this plan, or use a calendar year, charter year or follow the chartered organization’s budget year.
- Review your income and expenses from the previous year or two. Note areas in which you spent more than you thought, and categories in which you spent less. Make a realistic estimate of how much you’ll raise from popcorn sales or other fund-raising activities.
- Be mindful of recurring charges that don’t come around every year. For instance, we renew the license for our troop database software every three years because it’s cheaper per year to do so, so every third year we need to include that in our budget.
- Likewise, if you have deferred expenses that you are saving for, such as equipment purchase or replacement or a big high-adventure trip in a future year, make sure you set that money aside and don’t plan to spend it just yet.
- Solicit input from other committee members and the Scoutmaster about expected expenses. The equipment coordinator might want to purchase additional camping gear, or the Scoutmaster may want to send Scouts to youth leadership training courses.
- You may have categories that are zero-sum line items, such as BSA registration fees or t-shirt sales, where the money you spend is covered by money you collect for that purpose. Include those figures in the budget to give you an overall picture of your unit’s cashflow.
- Follow the BSA’s Ideal Year of Scouting planning process. It’s centered around popcorn sales as a means of funding your unit, but it’s also a valuable budgeting tool. There’s a plan for Cub Scout packs and also advice for Boy Scout troops [PDF].
The next article in this series will deal with the unit bank account and tax issues, including sales tax and nonprofit status. And please contact me if you have any questions about unit finance; I’ll do my best to answer them for you.
Image courtesy of Panpote / FreeDigitalPhotos.net