Wisconsin 4-H is the flagship youth development program of the University of Wisconsin-Madison Division of Extension. This means that the University of Wisconsin – Madison, has overall responsibility for the development, efficiency, and effectiveness of all 4-H programs in Wisconsin. Funds for support of 4-H come from the United States Department of Agriculture (USDA), the University of Wisconsin – Madison, county government, the Wisconsin 4-H Foundation, private donors, and various other sources.
In addition to the policies listed below, the following financial handbooks have been developed as a resource for 4-H members and volunteers:
Authorization to use the 4-H Name and Emblem is the responsibility of the Wisconsin 4-H Program Associate Director and local 4-H Program Educators.
Wisconsin 4-H Clubs and Groups, when authorized by the issuance of a 4-H Charter, are granted certain privileges and responsibilities related to financial activities.
The University of Wisconsin-Madison Division of Extension expects 4-H Clubs and Groups to raise and manage all 4-H funds in accordance with generally accepted accounting principles and within the policies and procedures established by the Wisconsin 4-H program.
Chartered 4-H Clubs and Groups qualify for federal tax-exempt status under the Wisconsin 4-H Clubs/Groups Group Exemption Number (GEN) 5968 held by the Board Regents of the University of Wisconsin System, University of Wisconsin – Extension.
As a subordinate, all 4-H Clubs and Groups are considered a 509(a)(2) under the 501(c)(3) tax code and are exempt from paying federal income tax on funds raised on behalf of 4-H, or to support educational programs; and donors may deduct contributions to 4-H Clubs/Groups and affiliated 4-H organizations such as bequests, legacies, transfers, or gifts as applicable.
If a 4-H Club or Group needs a letter to confirm tax-exempt status, the 4-H Club or Group leader should contact their 4-H Program Educator and provide the following information:
- 4-H Club or Group official name
- EIN number
- Purpose for request
The Employer Identification Number (EIN) is the nine-digit number also known as a Federal Tax Identification Number, and is assigned by the IRS to business entities. 4-H Clubs and Groups must have an EIN number to open a bank account. To obtain an Employer Identification Number (EIN) 4-H Clubs and 4-H Groups must work with their 4-H Program Educator to complete an SS-4 form and apply online or by fax or mail.
Note: As of May 2019, the Internal Revenue Service (IRS) began enforcing a new policy related to the submission of the SS-4 form. The new IRS policy states, “Unless the applicant is a government entity, the responsible party must be an individual (i.e., a natural person), not an entity.” 4-H Clubs and 4-H Groups are not considered government entities.
Additional Wisconsin 4-H EIN Policies
- The local county Extension office address must be the office of record for all 4-H Clubs and Groups and must maintain a record of all EINs in the county.
- No account held in the name of any 4-H Club or 4-H Group may use the name of a member or adult volunteer, and a social security number of an individual must not be used in lieu of the appropriate EIN.
- Each 4-H Club or Group must have its own EIN.
With the oversight from the 4-H Program Educator, 4-H Clubs and 4-H Groups may establish accounts at FDIC (Federal Deposit Insurance Corporation) or NCUA (National Credit Union Administration) insured institutions. This option includes the use of savings accounts, checking accounts, money market accounts, and certificates of deposit.
Only 4-H members and 4-H volunteers can be listed as official signers on 4-H Club or 4-H Group financial accounts.
Use of Debit and Credit Cards
Debit Cards and Credit cards are highly discouraged and limited to 4-H Leader Organizations. In the event a 4-H Leader Organization needs a credit card, the following practices apply:
- Be aware of all fees and policies associated with the credit card, such as a minimum number of transactions per year to maintain the account.
- Inform UW-Madison Division of Extension when a corporate credit card is being opened – add to the annual charter on the financial report page.
- The monthly statement must be mailed to the county office.
- The credit card is the responsibility of the Treasurer of the 4-H Leaders Association.
- Limit authority to purchase on the authority of the organization to a few volunteers.
- Purchases should be previously approved through the budget process.
- Create a credit card log form and attach receipts to the log with an explanation of purchases.
- Restrict the credit limit and amount available per transaction even if there may be fees associated with this service.
- The account must be paid in full each month.
4-H Clubs and Groups may establish a fund with a non-profit foundation to produce long-term stable support for 4-H programming provided there is a Memorandum of Understanding (MOU) established between the non-profit foundation and the University of Wisconsin-Madison. Options include:
- The University of Wisconsin-Madison Foundation
- The Wisconsin 4-H Foundation
- A local Foundation or Endowment Fund that the University of Wisconsin-Madison approves.
4-H funds including membership dues and staff-led program fees should be deposited in a county government account. This must be done in accordance with a written agreement between the county government and the Division of Extension.
If a county account is not an option, another chartered entity may serve as the fiscal agent for membership dues and staff-led program fees provided that 1) the staff have control of the funds and 2) the designated funds are tracked separately from the other chartered entity funds.
4-H State Level Member Dues
Money collected from individuals for membership in the Wisconsin 4-H program. The amount of the dues and how the funds will be used are set by the Wisconsin 4-H Associate Director.
4-H County Level Member Dues*
Money collected from individuals for membership in the county 4-H program. The amount of the dues and how the funds will be used are set by the 4-H Program Educator.
*Please note that this policy would not prohibit a 4-H Leader Organization from requesting donations from 4-H members to support programming, marketing, and fundraising efforts.
4-H Club or Group Level Member Dues
Money collected from individuals for membership in the club or group. Dues are for the benefit of that specific club or group’s membership. At the club or group level, members vote on the amount of dues and how all 4-H club or group funds are used.
Economic Hardship for Membership Dues
At the club, group, county, and state levels, the ability to pay dues will not be a barrier to 4-H membership. Staff and volunteers must have a system to provide access to 4-H membership.
Money collected from individuals participating in a specific program or activity. Participation fees are charged directly to participants who choose to participate in the program or activity. These fees are separate from membership dues.
The purpose of this section is to describe the responsibilities and procedures related to planning and fundraising.
Chartered 4-H Clubs and 4-H Groups are authorized to use the 4-H name and emblem for educational or informational uses that are in the best interest of 4-H. Thus, they are responsible for helping to plan and implement an educational program in their community.
All 4-H Clubs and 4-H Groups should prepare an annual program budget to establish the allocation of financial resources to fulfill program needs. The proposed budget needs to be approved by the 4-H Club or 4-H Group membership. Approved budgets should be submitted to the local county Extension office for review by the local Wisconsin 4-H Staff.
Budget management is a primary responsibility of 4-H Club or 4-H Group officers. Thus, officers are responsible for ensuring that members are kept abreast of the budget targets as compared to the actual expenditures. If there are deviations from the planned budget, officers are obligated to inform the members to ensure that there is full agreement, support, and approval on any changes. Raising funds with no specific associated 4-H purpose is not appropriate.
Fundraisers should promote healthy youth development. In addition to raising funds, the project should be one in which 4-H members can have an educational experience and learn life skills. Fundraising should only be conducted to meet a specific goal established through broad input from the 4-H Club or 4-H Group’s membership. The need for fundraising should be identified through the 4-H Club or 4-H Group’s annual budget development and approval process. Generally, money raised during the course of the 4-H fiscal year should be spent that same year unless it is for a long-term long-range goal, such as the establishment of an endowment fund.
Fundraising for a long-term objective must be for a specific youth development goal and requires a 5-year plan with specific steps. 4-H Clubs and 4-H Groups cannot hold excess funds beyond the defined limits. See excess funds document. All money raised using the 4-H Name and Emblem must be used for 4-H activities. Because the funds are publicly accountable, they must be used to pay for educational programs, activities, workshops, or supplies. Funds raised in the name of 4-H become the property of 4-H (4-H funds are not the property of individuals who may have helped raise the funds). Funds are not to be raised in the name of a particular individual (member or leader). They must not be used for the personal financial gain of any individual. Pocket money, personal items, and souvenirs are clearly not legitimate uses of money raised in the name of 4-H.
At the 4-H Club or 4-H Group level, members should approve the fundraising goal and the fundraising project being undertaken. Fundraising should not be the primary focus of club/group activities nor exclude any individual from participating. 4-H Clubs and Groups are expected to support the financial needs of the total group and when possible, assist with participant costs with county, state, and national programs.
- To ensure safety for 4-H members and leaders, door-to-door solicitation is discouraged. Individual solicitation should be done with family and friends.
- All funds raised become part of the club’s treasury.
- Check with local and state authorities on health, licensing, labeling, labor, and tax laws.
- Fundraising must not be used to endorse or imply endorsement, of a specific business or product.
- In connection with 4-H fundraising purposes, the following disclaimer statement must be used on products or services offered for sale: “A portion of the sales price of this product or service will be used to promote 4-H educational programs. No endorsement of the product or service by 4-H is implied or intended.”
- Raffles 4-H Clubs or Groups that plan to conduct raffles or bingo must comply with state regulations and obtain licenses. Any 4-H organization that plans to hold a raffle must obtain a raffle license from the State of Wisconsin Division of Gaming.
C. Fundraising for an Outside Group or Organization
The Wisconsin 4-H Program holds that the occasional participation of 4-H members in fundraising activities in support of outside groups and organizations as part of a service-learning activity provides a high-quality youth development experience. It is important to note that a group is defined as a “class” of individuals that have a common need and not an individual person or family.
- The local 4-H staff member must approve the proposed fundraising activity as appropriate from a programmatic, youth-development perspective.
- The fundraising effort must not promote or benefit a specific religion, political party, or political candidate. 4-H Clubs or groups can participate in fundraising efforts with an organization that is religious or political in nature if the effort benefits the entire community. An example would be a 4-H club could donate food to a food pantry that is run by a local church, but is open to the entire community.
- The group or organization must not discriminate in their membership on the basis of race, color, sex, handicap, religion, age, sexual orientation or national origin.
- The local 4-H staff must approve the group or organization as an appropriate recipient of fundraising efforts.
- Fundraising activities must be clearly identified as benefiting the recipient group or organization so donors understand who is receiving the goods or services.
- Fundraising efforts must comply with all Wisconsin 4-H Youth Policies.
- All fundraising activities must be approved by the membership either through an adopted budget or action (i.e., vote) by the 4-H club or group.
- 4-H clubs or groups may collect non-cash items or cash contributions that are then used to buy supplies and materials to carry out their service-learning activity.
- When a 4-H group engages in a fundraising activity to benefit another group (e.g., fire victims) or organization (e.g., Red Cross) a sign must be posted to make clear to potential donors that the funds will be used to benefit the other group (e.g., fire victims) or organization (e.g., Red Cross). For cash contributions only:
- Checks should be made payable to the 4-H club or group.
- Cash received during the fundraising activity must be counted by two persons.
- All money received must be processed according to Wisconsin 4-H Policy.
- Checks and cash must be deposited into a 4-H account prior to the purchase of supplies and materials needed to carry out the service learning activity.
All expenditures must be made by check from the 4-H club or group treasury, and properly recorded on the 4-H club or group account ledgers including the purpose.
- If a 4-H group is fundraising to benefit a nonprofit or tax-exempt organization, the 4-H club or group should work with the charitable organization ahead of time to obtain tax receipts that can be given to donors upon collection of their contribution. Donations are only tax-deductible if made to a qualified organization (i.e., a non-profit or tax-exempt organization).
D. Gifts to 4-H Clubs and 4-H Groups
The 4-H Clubs and 4-H Groups may receive funds from their own fundraising efforts from individuals, organizations, or businesses. Funds donated directly to a 4-H Club or 4-H Group by private individuals, groups, agencies or foundations are to be managed in accordance with Wisconsin 4-H policies and procedures.
Any proposals of significant gifts including money and things, (e.g., those in the amount of one thousand dollars and no cents or greater), should follow the procedures outlined in the document (“Considering Expenditures of Over $1,000 – Capital Equipment and Gifts”.)
E. Acknowledging Charitable Donations
Tax law changes enacted under the Pension Protection Act of 2006 have an impact on tax deductions for charitable contributions. Under this provision, a donor cannot claim a tax deduction for any contribution of cash, a check, or other monetary gift made on or after January 1, 2007, unless the donor maintains a record of the contribution in the form of either a bank record (such as a canceled check) or written communication from the charity (such as a receipt or letter) showing the name of the charity, the date of the contribution, and the amount of the contribution.
While the new law does not change the prior-law requirement that a taxpayer receives an acknowledgment from a charity for each deductible donation (either money or property) of $250 or more, an organization can assist a donor by providing a written acknowledgment for any donation level. Without a written acknowledgment from the organization, the donor cannot claim the tax deduction unless they have a bank record. The 4-H entity receiving the donation would be responsible for providing the written acknowledgment to the donor.
The written acknowledgment should include the following information:
- name of organization
- amount of cash contribution
- description (but not the value) of non-cash contribution*
- statement that no goods or services were provided by the organization in return for the contribution, if that was the case
- description and good faith estimate of the value of goods and services, if any, that an organization provided in return for the contribution+
Note: It is not necessary to include either the donor’s social security number or tax identification number on the acknowledgment.
* Provide a description of the property donated. Valuation of a noncash donation is the responsibility of the donor, in consultation with the donor’s tax advisor and individuals qualified to appraise items of this nature. It is not appropriate for a 4-H group, staff member, or volunteer to place a value on items donated.
+ If the donor received something of value in return for their contribution (such as a meal or gift), the acknowledgment of the contribution should specify the donation or purchase amount, and an estimate of the value of the goods or services received.
There are no IRS forms for the acknowledgment. The acknowledgment can be in the form of a letter, postcard, computer-generated form, or e-mail. The acknowledgment can be provided to the donor as a paper copy or electronically.
Examples of Written Acknowledgements
“Thank you for your cash contribution of $300 that the __________ County Happy Worker’s 4-H club received on December 12, 2017. No goods or services were provided in exchange for your contribution.”
“Thank you for your cash contribution of $350 that the ____________ County 4-H Leader’s Association received on May 6, 2017. In exchange for your contribution, you received a cookbook with an estimated fair market value of $30.”
“Thank you for your contribution of $450 to the _____________ County 4-H Leader’s Association made in the name of its International Programs fund. No good or services were provided in exchange for your contribution.”
“Thank you for your contribution of two used sewing machines that the Johnson Street 4-H After-school 4-H Club received on March 15, 2017. No goods or services were provided in exchange for your contribution.”
All 4-H Clubs and Groups with a checking and/or savings account must submit an Annual Financial Report and supporting documents to the 4-H Program Educator by September 1 or the date set by the 4-H Program Educator. The Annual Financial Report and supporting documents include:
- Wisconsin 4-H Clubs & Groups Annual Financial Report
- 4-H Club or 4-H Group Audit Checklist
- Copy of the checkbook and/or savings registry, covering July 1 – June 30
- Copy of the bank statement ending June 30 or July 1 for each account. Any differences between the bank statement(s) and the ending balance reported must be reconciled. Upload the reconciliation with the Annual Financial Report.
- Current inventory of land, buildings, property, or project equipment with individual values of $2,000 or more.
- Monthly Treasurer’s reports for 4-H Clubs or Groups with annual income greater or equal to $20,000
The Annual Financial Report allows the 4-H Club or Group to qualify for federal tax-exempt status under the University of Wisconsin Board of Regents General Exemption Number (GEN) for Wisconsin 4-H Clubs and Groups.
Failure to submit a completed Wisconsin 4-H Clubs & Groups Annual Financial Report and supporting documents by the due date could result in loss of tax-exempt status and forfeiture of all financial assets.
Audits of the 4-H Club or Group are required at the end of the fiscal year. They should also occur when a new Treasurer takes office.
- Two persons must conduct the audit of a 4-H Club or Group’s financial records. The Treasurer, any persons authorized on the 4-H accounts, or anyone related to them cannot conduct the audit.
- The 4-H Program Educator may choose to identify an audit committee to conduct an additional audit.
- The audit committee should consist of both youth and adults.
- Auditors must use the Wisconsin 4-H Club, Group, or Committee Audit Checklist.
Paying Wisconsin Sales Tax for 4-H Program-Related Expenses
Wisconsin 4-H Clubs/Groups are exempt from paying state sales tax. A Certificate of Exempt Status (CES) number can be obtained by submitting a completed Wisconsin Sales and Use Tax Certificate of Exempt Status Application Form S-103 and the following documentation:
- S-103 Form
- Articles of incorporation or bylaws
- Statement of receipts (income) and disbursements (expenses) for their last accounting period (example: monthly treasurer’s report)
- Federal Internal Revenue Service (IRS) determination letter.
To obtain a Certificate of Exempt Status (CES) number, 4-H Clubs and 4-H Groups must work with their 4-H Program Educator to complete a S-103 form and request Federal Internal Revenue Service (IRS) determination letter.
Collecting Wisconsin Sales Tax
4-H Clubs and Groups should review the Wisconsin Sales and Use Tax Information for Nonprofit Organizations (Publication 206) which provides information on the types of organizations that qualify for a certificate of exempt status and the application process.
In general, 4-H Clubs or Groups would not be required to collect and submit sales tax unless ANY of the following conditions are met:
- The 4-H Club or Group sponsored a fundraising entertainment event that had proceeds of $10,000 or more.
- The 4-H Club or Group conducted fundraiser(s) on taxable products for 75 days or more in a calendar year.
- The 4-H Club or Group had fundraising proceeds of $50,000 or more in a calendar year.
A Wisconsin 4-H Club or Group must register with the Wisconsin Department of Regulation and Licensing as a charitable organization with the State of Wisconsin if the entity solicits or receives $50,000 or more charitable contributions (donations) in a single year and/or has any paid employees. For 4-H Clubs or Groups, common areas are donations of equipment, land or money, bequeaths, grants, sponsorships for camps or events, corporate solicitations, and donations.
If a 4-H club or group is considering a lasting purchase (an asset that has a useful life of more than one year), the 4-H club or group should follow the steps outlined in the Wisconsin 4-H Expense Tip Sheet prior to purchasing the item.
This Tip Sheet provides guidance for offering cash awards, cash prizes, scholarships to attend 4-H programs, scholarships for higher education and memorial gifts for members or volunteers.
Chartered 4-H Clubs and 4-H Groups must retain their nonprofit status. Excess funds can cause a 4-H Club or Group to unintentionally become a private foundation as defined by the IRS.
Excess 4-H funds are a 4-H Club or Group’s monies that exceed the maximum limits outlined below. Clubs or groups with less than $2,000 do not have excess funds.
Calculate if a 4-H Club or Group has excess funds using the steps below. You will need Annual Financial Reports from the last three years.
- Find the average of the last three years’ annual expenses for the 4-H Club or Group
- Add the value of Box C (Total expenses) from the Annual Financial Report for the last three years. (Example: $1,800 + $700 + $1,100 = $3,600.)
- Divide the total by three (3). This is the average annual expense. (Example: $3,600 ÷ 3 = $1,200. $1,200 is the average annual expense.)
- Multiply the average annual expense by two (2) to calculate the maximum limit of money the club or group can hold. (Example: $1,200 x 2 = $2,400. $2,400 is the maximum limit.)
- Compare the maximum limit to the Ending Balance (Box D) on the most recent Annual Financial Report.
- If Box D is greater than the maximum limit AND has over $2,000, the club or group has excess funds.
- If Box D is less than the maximum limit or less than $2,000, the 4-H Club or Group does not have excess funds.
Chartered 4-H Clubs and Groups cannot hold excess 4-H funds.
If a club or group finds that they have excess funds, that money can be saved for a specific programmatic objective; however, there must be a 5-Year Plan Plan that has been approved by the 4-H Program Educator. (See 4-H Excess Funds and 5-Year Plan Document) If the programmatic objective will take longer than 5 years, the 4-H Program Educator AND the Wisconsin 4-H Associate Program Director must grant approval of the plan.
This page is optimized for printing
A statement of dissolution is required in a 4-H Club or Group’s written operation guidelines or by-laws. If a 4-H Club or Group dissolves, assets must be turned over to another recognized 4-H Club or Group. The 4-H Program Educator must be notified of a pending dissolution immediately.