Easy Fund-Raisers for Homeschool Organizations
- Carol Topp, CPA The Old Schoolhouse
- 2009 12 Dec
Many homeschool groups bring in needed income through fund-raisers. Through experience, I have found that some fund-raisers are much easier to conduct than others.
Although a very common practice, selling products door to door is one of the hardest ways to raise money, because managing the orders, delivering the product, and storing inventory involves a lot of hard work. My homeschool group had tried selling products in the past, but we wanted an easier way to bring in funds. We found several ideas that have worked well for homeschool groups, including coupon and reward programs, fund-raising dinners, donation drives, and website income.
Coupon and Reward Programs
Several grocery stores and retail businesses make donations to nonprofit organizations, such as homeschool groups, as a reward for shopping with them.
Box Tops for Education: This General Mills (GM) program is a coupons-for-cash program. Your members cut off a small 10-cent coupon from General Millscereal box tops (or packages of other GM products), collect them, and then turn them in. In exchange, GM will mail a check made payable to your organization. What could be easier? Little organization is needed. You just need to apply to the program and find someone who is willing to be responsible for collecting the coupons. Everyone in your organization can do his or her part, and even small contributions add up. Here are some tips to get the Box Tops programworking for you:
- Offer an incentive for participation. For every donation of box tops, our coordinator rewards participants with a piece of candy or a sticker.
- Use a visual display. Make a poster that illustrates the goal (a thermometer or perhaps a big box of cereal!), and chart your group's progress.
- Establish a financial target. For example, perhaps your homeschool co-op wants to purchase recreational equipment for preschoolers or some specialized school supplies. You can motivate families to collect box tops if they support the end result of the fund-raiser.
- In order to participate, homeschool groups should meet the requirements described on the Box Tops for Education website: "Accredited home school associations, K-8, in the United Sates that are organized and operated primarily for educational purposes and have 15 or more students." General Mills does not define accredited, and many homeschool groups use this program as an easy fund-raiser choice.
Shopping Reward Programs: Reward programs return a portion of a shopper's purchases (typically 2-4%) to a nonprofit organization of their choice. My co-op of fifty families received $500 when we participated one year. The amount earned can vary widely, depending on your members' participation. Typically the store issues a pre-paid card. The card is then used to make purchases and can be reloaded for more purchases. These reward programs are easy because your organization doesn't have to sell products door to door.
eScrip is a fund-raising program that is similar to the store reward programs, in which businesses contribute a percentage of your credit card and debit card purchases to the organization of your choice. One homeschool group in California earned $1,468 by using eScrip. Visit the eScrip website to learn how it works.
Food as a Fund-Raiser
We have pizza day once a month at our homeschool co-op. It has been an enjoyable and easy way to generate income. We announce (a week beforehand) that pizzas will be ordered the next week. We take orders for whole pizzas for $10 each. To keep it simple, we order only two types: cheese and pepperoni. Everyone brings his or her own drinks, paper plates, and napkins. Pizza Day has been very popular in our co-op. The kids love the food, the moms love the low price, and our co-op makes about $1 in profit on each pizza, even after tipping the deliveryman. It adds up every month!
Other homeschool groups host dinner theaters and spaghetti suppers to raise money. I wouldn't classify these as easy fund-raisers, but some groups enjoy the collective efforts required to put on a production. The children can help serve and clean up after the meal. Some groups like to combine the dinner with a program such as a play, talent show, or an end-of-year show and tell.
For generations, nonprofits have been raising money for their mission through donation drives. Homeschool groups could follow their pattern with a unique angle. Nancy Carter's support group in Kentucky has a read-a-thon each year. The kids find sponsors who commit to make donations for every book that a student reads during a designated two-week period of time. The support group asks local businesses to donate prizes, and then they have a party for all who participated. It has been a great fund-raiser and a fun time for Nancy's group!
When Kristen Fragala was a support group leader, she composed a simple fund-raising letter for members to send to grandparents, friends, and neighbors who were supportive of the family and homeschooling. The letter asked these friends and relatives to make a donation to the support group for any amount. This approach is very straightforward and can be quite successful.
Your organization must be a qualified tax-exempt organization in order for these donations to qualify as tax deductions by a donor. If your donation drives are successful, your group should consider obtaining 501(c)(3) status. This status usually increases donations because the donors are eligible to receive tax deductions for their gifts. Visit http://www.homeshoolcpa.com/ for more information.
Income From Your Website
Your group can bring in funds by putting an Amazon.com link on your website and encouraging members to shop at Amazon via the link. Amazon will pay your organization 5% of all purchases or 15% if you link to a specific book title. Visit http://affiliate-program.amazon.com/gp/associates/join to learn more about this easy way to earn money.
Taking advantage of Google's Adsense program on your homeschool group's website can bring in additional revenue too. Be aware that you cannot choose the ads that will appear on your website. You can, however, designate a target audience based on key words you supply, such as homeschool. Visit www.google.com/adsense to read the details.
Can a Family Homeschool Have a Fund-Raiser?
So far, I have discussed fund-raisers that are sponsored by homeschool groups, but your family homeschool can have a fund-raiser if you follow a few guidelines. Here are some tips from fund-raising expert, Jim Berigan, a former Christian school principal and nonprofit director (TSFundraisers).
- Check with the fund-raising organization first. Some fund-raising organizations limit their programs to groups or organizations and will not allow an individual family to participate.
- Understand the tax implication of your fund-raising income. Speak with an accountant or tax preparer before you attempt a fund-raiser. Your profit from the fund-raiser will need to be reported as income on your tax return.
- Keep excellent records of everything you earn and everything you spend.
- Reach out to the leadership of the local homeschool network in your area to ask their advice and learn from their experience.
Reporting Fund-Raiser Income
Sometimes your fund-raising efforts will be so successful that you may wonder if your group owes anything to the government in taxes. For the most part, fund-raising is not considered part of your group's mission; it is just a means to an end. After all, your group's mission is to encourage homeschooling, not to sell ads, pizza, or other products.
The Internal Revenue Service calls the money you raise "unrelated business income," meaning it is money collected in a trade or business that is not related to your primary mission. The IRS does assess a tax on unrelated business income; it is called the Unrelated Business Income Tax or UBIT. The purpose of this tax is to prevent nonprofit, tax-exempt organizations from having an unfair advantage over the for-profit marketplace. The best example is a gift shop in a nonprofit hospital. The income from a gift shop is not related to the hospital's primary purpose of giving medical treatment, so the profits from the gift shop are taxed. Fortunately the IRS has several exceptions to the UBIT tax:
- A $1,000 threshold allows that the first $1,000 in profit from an unrelated business will not be taxed.
- If the fund-raiser (or unrelated business) is run by volunteer efforts (i.e., no paid staff) then the proceeds are not taxed.
- If the fund-raiser is not regularly carried on, such as a once-a-year spaghetti supper, then the proceeds are not subject to UBIT.
- If you are selling donated items, like in a garage sale, the income raised is not taxed.
The rules regarding UBIT are complex. You can read more about UBIT in IRS Publication 598, Tax on Unrelated Business Income of Exempt Organizations (www.irs.gov/pub/irs-pdf/p598.pdf).
Your state may have reporting requirements if you are representing yourself to the public as a nonprofit organization. In my home state of Ohio, groups that do public fund-raising must file a charity registration. One year, my co-op sold candles door to door and had to file a seven-page financial report with Ohio's attorney general's office. That report was such a nuisance (and the fund-raiser was so much work) that we no longer do sales to the public. Investigate what your state requires of groups that conduct fund-raisers. This website documents nonprofit reporting requirements by state: HA.
A homeschool group in Ohio was paid $1,000 for cleaning a fairground. This was not really a fund-raiser. It was work for hire, but because the workers were all volunteers and the money went to the homeschool group, no one claimed it as income or paid taxes on it. I wouldn't say their labor was easy, but they raised a significant amount of money in a single day.
A Texas homeschool group sponsored a group garage sale. Families brought donated items to sell and volunteered their time during the sale. Also consider hosting a homeschool curriculum sale. Your organization could charge a small fee to the buyers and sellers and allow the sellers to keep their own sale proceeds.
For more ideas visit FM, Suzanne Wouk's website. She has a lot of experience with different fund-raisers and specializes in fund-raisers your group can conduct via the Internet.
Raising money for your homeschool group may never be effortless, but these ideas have been tried and tested by several homeschool groups and found to be quite easy! They take minimal investments of time, organization, and energy. After all, you have better things to do with your time—like homeschooling. I wish you the best of success in your fund-raising efforts!
*This article published Dec. 8, 2009
Carol L. Topp, CPA is a homeschooling mother of two daughters and is the author of Homeschool Co-ops: How to Start Them, Run Them and Not Burn Out. She enjoys using her accounting skills to help homeschool organizations, and she enjoys serving on her homeschool co-op board. Carol's website address is www.HomeschoolCPA.com.
Copyright 2008. Originally appeared in The Old Schoolhouse Magazine, Winter 2008/09. Used with permission. Visit them at www.TheHomeschoolMagazine.com. For all your homeschool curriculum needs visit the Schoolhouse Store.