Financial Organization

[Richard McClellan]

Our team is getting ready for its 2nd year to do FIRST, and I have been wondering how the financial organization works with other teams. Last year, we spent close to $5000 on top of our regional fee on materials to build a course, parts for the robot, tools, pit display, etc. This was ultimately funded by a few team fundraisers, some parent donations, and club dues.

All of this cost was initially paid for by 4 of our primary team mentors last year, including myself. After the season was over, everyone compiled receipts, gave them to the school accountant, and checks were cut from the school account with money from the fundraisers and donations. It ended up working alright in the end, but as college students, our bank accounts were beginning to run dry as we neared the end of the season.

For this coming year, we've lost a few mentors, so money is becoming even tighter. It's going to be even more difficult for that $5000 to come from personal accounts. Now, of course, we can turn a few receipts at a time, and get reimbursed as things are being bought, but there still seems to be a 1-2 week turnaround on cutting checks from the school account, plus time to deposit, etc.

So, how do other teams do it? Does anyone have any sort of small business account at a local bank? This seems like a good idea, but it's probably difficult if not impossible to deposit corporate donations into something like this. Does anyone use any sort of team credit cards or debit cards? Or request purchase orders directly from the school?

What about tax? Sometimes it's difficult and not really worth the effort of processing a tax exempt form, especially for online orders, when you would have to fax it, thus delaying the ordering process. While it is best to get purchases tax exempt, these certain cases come up where it is difficult, but our school account will still not reimburse for tax. Have any other teams been able to get around this?

[FourPenguins]

Our team is incorporated as a 501(c)(3) non-profit organization. This means several things. First of all, we are required to keep money in a separate team account for bookkeeping purposes. Second, our corporate sponsors can easily list us as a charitable donation for tax purposes.
However, becoming a 501(c)(3) is not to be taken lightly. It requires a dedicated group of individuals to manage the team finances and keep records for tax reporting. Not being part of the business end of the team, I can't even tell you the number of regulations we have to follow to maintain our non-profit status.

If you're not going to be able to file as a 501(c), you've got some other options. I see no reason that the team cannot set up a bank account. It would keep all of the money in order and would allow you to cut checks for supplies and other expenses.

[JohnBoucher]

Team 237 is also a 501(c)(3). We have our own credit cards. Becoming a non-profit is a great move for a team if they don't receive school funding or enough school funding. It's important to corporate sponsors.

There is a lot of grant money out there for non-profits that will cover your additional expenses. We receive three different local foundation grants that we use for various items, like tools and materials.

We have a state tax exempt form that we take when shopping locally to avoid sales tax. There is a little work to getting the on-line transactions tax-free, but it's a one-time deal.

Good Luck

[danshaffer]

Team 8 is also a 501(3)(c), run out of our high school. That means that we hand off checks to the front office, and they take care of the accounting. Big orders generally go through the purchase order process, smaller ones go on personal credit cards and are reimbursed.
This process has the added benefit that our principal is kept in the loop on our fundraising efforts, so she gets to congratulate us when the big accounts come through.
I guess that this method means that we don't learn as much (really anything) about formal accounting procedure, but on a team of our size, that's kinda been neglected in favor of building a robot.

[RoboMom]

Based on experience with many teams, it is never a good practice to spend much from personal funds for the team. It can lead to so many problems down the road.

Besides having your own 501(c) 3, you can find another that will incorporate your team. Check with the school board, as many have these as part of the board.

I found a small private foundation here that was impressed by FIRST, and agreed to accept donations (corporate, fundraising and employee matching). It has been a great partnership!

I have also worked with teams that have opened business checking accounts to help with team finance management. You can talk with the bank manager who may be more flexible with the cycle of funding in and out due to the FIRST schedule, and waive some fees. If you do set up something outside of school, make sure that the people involved will be around more than one year. And that more than one person knows what is happening.

You have asked great questions here.

[synth3tk]

We're a really small team, so we've no dedicated group to manage funds, just our team leader, and with the lack of interest again this year he'll probably be managing it again. Anyway, he's the only one who knows what our status is and keeps track of funds. Only two things that ever came out of pocket were blank discs for the DVD camcorder and the web hosting fees.