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 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.
Wisconsin 4-H clubs and 4-H 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 4-H 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.
Authorization to use the 4-H name and emblem is the responsibility of the Wisconsin 4-H Program Manager, working in cooperation with each county staff member. The county staff member is responsible for authorizing the use of the 4-H name and emblem within her or his jurisdiction.
The Wisconsin 4-H Program Manager is responsible for authorizing the use of the 4-H name and emblem for statewide or multi-county use.
Revocation and Dissolution of a Charter
4-H Clubs or 4-H Groups must include a statement of dissolution in their written operating guidelines or by-laws similar to the following: Upon dissolution of the 4-H Club, any assets must be turned over to a recognized 4-H club/unit/group, such as the county 4-H Leaders Association, with the approval of county 4-H staff. County 4-H staff will submit final financial report to the Wisconsin 4-H Office at the time the 4-H Club or 4-H Group votes to disband.
III. Bank Accounts and EINs
There are specific rules and regulations that must be followed to ensure proper use and minimal risk. With the oversight from the local 4-H staff member, 4-H Clubs and 4-H Groups have the following options for depositing or investing funds. These are listed in the order of preference.
Option A: FDIC or NCUA Institution: Funds may be deposited or invested in a FDIC (Federal Deposit Insurance Corporation) or NCUA (National Credit Union Administration) insured institution. This option includes the use of savings accounts, checking accounts, money market accounts, and certificates of deposit.
Option B: The Wisconsin 4-H Foundation: Funds may be invested in an endowment fund made available according to the Wisconsin 4-H Foundation polices to produce long-term stable support for a 4-H group, club or program.
Option C: County UW-Extension Account: Funds may be deposited in an authorized county UW-Extension account. This must be done pursuant to a written agreement with county government and with written approval from UW-Extension. These funds may eventually be transferred to a 4-H Foundation fund, pursuant to a written agreement with county government and with written approval from UW-Extension. UW-Extension approval comes from the 4-H Youth Development Program Director and UW-Extension Director of Budget and Fiscal Operations.
Option D: State UW-Madison Division of Extension Account: Funds may be deposited in an authorized state UW-Madison Division of Extension account. At no point in the future can these funds be deposited to a 4-H foundation fund.
Option E: Other 4-H foundation or endowment fund: Under the circumstances described below, chartered 4-H Clubs and Groups may place excess 4-H funds, as defined in section A.3 of this policy, in an approved 4-H foundation or endowment fund other than the Wisconsin 4-H Foundation. To exercise this option, 4-H Clubs/Units/Groups must do all of the following:
- Demonstrate that there are serious obstacles and concerns with creating: a. A plan to spend excess 4-H funds in five years AND b. An endowment managed by the Wisconsin 4-H Foundation,
- Demonstrate that the proposed 4-H foundation or endowment fund will be able to meet any fiduciary responsibilities and tax obligations for such a fund, AND 3) Receive written approval from: a. The 4-H Youth Development Program Director AND b. The UW-Madison Division of Extension Director of Budget and Fiscal Operations. to establish and withdrawal restrictions apply.
B. 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 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 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.
C. Federal Employer Identification Numbers (EIN)
Upon review of the initial charter application, the county Extension office will apply for an EIN from the IRS using the (sample SS-4 form) for guidance.
When a 4-H Club or 4-H Group is chartered, the IRS letter granting the new EIN will be sent to the local 4-H staff. The local county Extension office 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 4-H Group must have their own EIN.
- The local county Extension office address must be the office of record for all 4-H Clubs and 4-H Groups.
IV. Reporting Requirement
All 4-H Clubs and 4-H Groups are required to submit a financial record and audit report to the County Extension Office once each year. This report is included in the annual charter renewal documents. Additional reports required by law must also be submitted to the respective agencies with a copy or verification of submission filed with the local 4-H staff. The yearly financial review is done by a small committee of youth and adults unrelated to the person completing the report and not directly involved with club finances.
V. Planning and Fundraising
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 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. Fund raising 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 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 personal financial gain for 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. Fund raising 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.
- Fund raising 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 a 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 by 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 cancelled check) or a 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 receive an acknowledgement 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 acknowledgement for any donation level. Without a written acknowledgement 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 acknowledgement to the donor.
The written acknowledgement 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 acknowledgement.
* 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 acknowledgement. The acknowledgement can be in the form of a letter, postcard, computer-generated form, or e-mail. The acknowledgement 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.”
VI. Management of Excess Funds
4-H Clubs and 4-H Groups must practice financial policies that retain their nonprofit status and prevents them from accidentally falling into a private foundation status with the IRS. This is the primary purpose for the policy on excess funds and the 5 year plan.
All 4-H Clubs and 4-H Groups must use a cash accounting method. 4-H Clubs and groups are expected to be raising money for the next fiscal year, while spending money that was raised in the previous fiscal year. This means that a 4-H Club and Group may have obligations to pay for expenses that have not been fulfilled, while it is taking in cash receipts for fundraising.
For the purposes of this policy, “excess 4-H funds” are assets in excess of a chartered 4-H Club/Unit/Group’s projected expenditures for two years, or $1,000, whichever is greater. Chartered 4-H Clubs/Units/Groups shall hold no excess 4-H funds, unless that money is being saved for a specific programmatic objective that must be accomplished within five years and has been approved by the county 4-H staff member. (See 4-H Excess Funds and 5-Year Plan Document)