Dealing with Finances

This question is about money. We have a new situation for our team, and we are trying to find out how other teams handle it.

FIRST is completely extracurricular in my school. We don’t have a class or a budget from anywhere. We are completely dependent on sponsors and students paying for expenses if needed. We have operated the last 11 years (since inception) by funneling our money through our education foundation. This allows us to obtain money quickly and easily instead of having to do check requests and POs through the school, which can take weeks for us. We have recently been told that policies have changed and that we can no longer do this. This year, our team has 9 students. Usually we hover around 20, but we had some issues. If we were to do a booster club, we have to have a board and committed people that are always accessible to get us money. As you know in FRC, you can’t wait 3 weeks for a part when the build season is only 6 weeks long. If we have to end up going the route of a club account and using POs, we will have to shut down our robotics program.

Our question is how do other teams handle their finances? What is your accountability system if you are in a public school? Any input would be helpful.

Many vendors allow customers to create an Open Purchase Order. Basically, that would let the school authorize a certain amount at the vendor, and then the team can spend it freely. So you could set that up now, then order what you want when you need it during the build season.

On my team, mentors pay for everything using credit cards, and then submit receipts to the school for reimbursement. So long as there’s a clear understanding about spending limits, this method really poses no problems. You just have to convince the school to allow it!

We have a hybrid situation, which is in response to a similar situation. We formed a 501c3 “Slidell Tiger Robotics Booster Club” which consists of (but is not limited to) mentors and interested parents. Most of our “big ticket” items, such as paying for competition each year, equipment purchases, and some of our re-stocking, go through our account which the school. Most of the purchases during build season, and many of our smaller parts purchases are handled by the booster club. The school (or more precisely the school board) required that the school be the designated beneficiary for the booster club should it disband, and requires an annual report, with an audit by another individual who was not handling the money that year, and of course we need to file a (zero dollar) tax return each year. The school has also required that a larger portion of our total funds go through the school account than we had in our second and third year when we used the school account only when we really had to; it’s now somewhere around half.

Like you, we have no direct funding of the team through the school, though the use of a build space, electricity, insurance, excused absences from school, and the coach’s stipend are all certainly of value, and I doubt we could keep the team viable without at least some of these. The school account money derives from some of our sponsorships (particularly government sponsors), student fees, and fundraisers which take place on school property or on school time. The booster club money derives from our local sponsors, private donors, and “off campus” fund raisers such as a campaign we are currently running. The team perks and lists sponsors on our website, shirts, robots, and such equivalently for money which goes through either account; both support the team!

You have limited time before this season, but a good long term (>1 year) solution is to form your own 501c3 non profit for this purpose.

For this season, will you be able to do reimbursements? Perhaps mentors can purchase everything and save receipts and then get reimbursements weeks later from the school. This might be the way you have to do it.

Thanks for the replies so far. We are in a very small town, so our resources are limited for purchasing, and many local places will not set up a running credit account. Thus, we shop online a good bit or just pay locally out of our pockets. With our current system, our mentors and coaches use their personal credit cards and submit receipts for reimbursement, but that is a problem with moving to a school account. This gives us some ideas to start with, but we are definitely looking for alternatives.

Like Jon mentioned, we order most of our parts from Vex and request a PO from the school for $500 and then over the build season we will keep submitting orders to Vex until that $500 is spent and then get a new PO from the school. We can usually get a PO turned around in a couple of days with the school, so we don’t have the delay that it sounds like you have.

We are hoping that we can keep things the same for this year, since we have already paid for everything except our actual robot and season-specific materials. This allows our mentors to do our purchasing and be reimbursed by our education foundation, which keeps our funds. But we see a transition coming, and we need to start preparing now.

I really think, as said above, that the PO method is going to be your best bet. Companies like Vex, Online Metals, etc. will ship you parts before you have paid for them as long as you sign your school up for a PO account with them and the school passes their credit check.

I assume in this new system mentors would still be able to make purchases and get reimbursed though, right? That’s a reasonably good way to do things.

I went the route with my most recent team.

You can also buy giftcards

Paying using a credit card to get reimbursed later isnt allowed in our public schools here in Hawaii anymore.
Our State Superintendent sent a memorandum instructing all principals (283 schools) to enforce and comply with this directive.
As an alternative, we already have a non-profit in place.
Over the years, I have heard from many teams say that reimbursement with appropriated State level funding isnt allowed in their areas also.

One of the tough challenges of doing FIRST besides trying to build robots.

Oh wow, that’s brilliant. Our school has a PO for our big suppliers like AndyMark, McMaster, Vex and such, but I’ll have to mention the idea of getting pre-paid cards before build season to the team. That could help if we want to buy something from a new vendor mid-season.

Prepaid cards/gift cards is something I had not thought of… I’ll have to check into that and see if our school allows it.

I’d be surprised if your school had official means to handle a gift card (though if someone wanted to give one, by all means check and shave a few percent off).

But if it’s spending money in your school account now, your bookkeepers should be familiar with an open purchase order. AndyMark accepts them*, and we send orders placed against them through to fulfillment until the amount of the PO is exhausted (or an expiration date passes). It’s about as fast as paying with a credit card and might save you some heartache during build season if you start that process now.

*If you didn’t catch it, I work at AndyMark.

Becoming a 4H club that uses school facilities might be a viable option. In some locations 4H clubs are entitled to a level of free use of school facilities. If that part of the equation would be good enough for your needs, you could then look into the regulations governing how 4H clubs handle their finances, and consider using something other than the school accounting system.

4H clubs aren’t governed by the 501C3 regulations. They are governed by a (different) law that is similar to the 501C3 regulations. Sometimes that confuses a potential sponsor, but in my experience unconfusing a sponsor was almost always possible during a quick chat.

Our situation is VERY similar to yours… except our Foundation hasn’t changed their policy on us.

We funnel almost every dollar to our school foundation, and get reimbursements once a month when the foundation meets. We do this because the foundation is very open with their tax ID number. The school keeps their ID locked in a vault somewhere.

We operate as a curricular club on campus, so we also get an account with the school ASB (not through the front office). The ASB account is more restrictive on spending, but they pay out every week. We are not required to have specific PO in advance, but instead can deposit money, say $2000, and leave an open spending request of up to $2000.

For both of these accounts we need MY signature (since I’m the faculty adviser). So a parent or student can’t just show up with receipts and ask for money.

This is the route that our team took, and there’s probably still enough time to do it before build season starts, depending on your state laws and, possibly, how fast the state government is.

It’s a two-step process:

(1) Form some sort of non-profit organization. The exact boundaries of this all vary state-by-state.

In some states, you can create what’s called an “unincorporated nonprofit association” very easily – you just need two people to say “Hey, lets do this.” They will need to adopt bylaws (for the next part), but that’s really about it.

In other states, you have to form a nonprofit corporation, which involves doing a filing with the state. This is a bit more complicated than setting up an unincorporated association, but not horribly.

(1.5) Get an EIN from the IRS, which you can do electronically.

(2) Ask the IRS to recognize you as a 501©(3). You can do this by filing a form 1023EZ with the IRS, which you can do electronically. The IRS says “you can expect to hear from us within 90 days,” but they actually average about 2 weeks.

Then, you have the 501©(3) set up a bank account, and you’re off to the races.

Total cost will be $275 - $600 depending on state. $275 is the IRS fee; the rest is whatever charge the state has.

It’s not rocket science, but it’s not trivial, either. If you have a lawyer among your parents, they can probably handle it if they’re willing to stretch beyond their comfort zone a little bit (most lawyers don’t deal with nonprofits much).

Our school district gave in to my request this year and gave us our own robotics team credit card. It took much convincing but it has been a life saver so far this year in FTC.

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I don’t know your whole situation but this is what we do. Our school district supplies our head coach (a teacher at our high school) with a school district credit card tied to the bank account we keep our money in. So if we ever need anything right now at this very moment (which seems to be what you’re worried about) we use the money from our bank account and pay for it. I don’t know exactly how you manage your money but I would expect that your team has to have a bank account somewhere? And that getting a card tied to that bank account would solve your problems? It’s just a matter of fundraising enough that there is always money in your account.