Troop Investment Portfolio -- Allowed????

[Billiken]

Our troop has some excess funds in our checking account.

It was suggested that we purchase a CD to get some interest income from the money.

One of our committee members said that this was against BSA policy.
(That is, earning a yield/profit off of a passive activity.)

Does anyone know what the "story" is regarding this?

THANKS

[JazerNorth]

I don't know what the policy is, but I think it is more to do with your CO. The CO is ultimately responsible for all funds in the Troop, so you might want to check with them. If they are a 501(c) (non-profit), they do have very strict rules to follow.

JazerNorth

[Billiken]

Thanks.

Yes, our CO is a 501(c) and their tax id (whatever) is on our checking account.

According to a long-time committee member many years ago the troop had a $2500 CD. Council found out about and confiscated it.

[PaulSWolf]

Thanks.

Yes, our CO is a 501(c) and their tax id (whatever) is on our checking account.

According to a long-time committee member many years ago the troop had a $2500 CD. Council found out about and confiscated it.

Sounds like an "urban legend" to me. I highly doubt the accuracy of that one.

Our units have had interest bearing checking accounts for years, and there should be no problem with a CD - It's simply a savings account. The Council would have no right to, nor any way of accessing the account.
Make sure, of course, that, just like indicated for the checking account, the Tax-ID you use on the CD is the CO's, (i.e. something in the format of 12-3456789, not 123-45-6789, which would be someone's personal SSN),

Since I know you're here in Cleveland, you should also verify this with Tom Gamble, Finance Director at GCC HQ. I'm sure he'll verify that there would be no problem.

[OldGreyBear]

I have to ask, where did the surplus come from? Popcorn? Fundraisers? Where? Whose money is it? Do you buy a CD so in 5 years the scouts who helped amass such a nest egg have little change to enjoy it? WHy not spend it on the those who earned it? is there more to the story?

[Billiken]

I have to ask, where did the surplus come from? Popcorn? Fundraisers? Where?

I'm new to the troop and suppose that the funds have just accumulated over time. (Troop has been active since 1942.)

We greatly discount summer camp and usually don't charge for overnighters.
We still do fund raising, though.

My dad is the CC of the troop where I grew up (small town in Illinois, population 5k).
They have received funds willed to them (several estates).
Also they recycle paper (we're talking many tons/month).

They just did a Philmont trip. Total cost charged to the boys was $280. Included all food and transportation (on troop bus).

The troop recently set up a college scholarship fund that pays $1000/yr for Eagle Scouts.
If someone joins the military instead of heading to college, it pays $3000 (one-time), after competion of basic training.

It's not a wealthy town by any means. However, recently one of the local merchants heard about the scholarship program and sent the troop (the fund) a check for $5000.

Last year a local church, not the CO, sent them a check "out of the blue" for $1000 with a note saying, "we believe in Scouting's values".

I also know of a troop in southern Illinois that has its own building.

[Chief J]

I do not see a problem in a CD or interest bearing savings account. However, I would caution that all assets of the Troop belong the the Charter Organization.

Are they in the loop with what you are doing? Do they support you in their endeavors?

Best Regards,
Chief J

[Lynda J]

A troop DOES NOT belong to a Council. It is solely owned by the CO. This includes any assets that the Unit has, and as one troop in our area rudely discovered this included any equipment pruchased with troop funds.

And for any Council to take money from a troop like what was discribed is not only wrong but probably illegal. It would be stealing from the CO.

I know lots of troops that have CD. Mostly they are set up to pay for something like Jamboree or other special troop activities that can run into big bucks.
We went through this several years ago in the Pack. One gal said that we had to totally wipe out the checking account balance by the end of each year. Seems some sorority she was in was audited by the IRS and they were told that they couldn't carry money over from one year to the next as a Non-profit Org. I talked to a customer with the IRS and he said there was nothing to it. He said about the only thing that will get a NPO auditied is if funds are used for things that do not benifit the group. Like someone using them for personal trips that don't relate to the org.

[Billiken]

Our council finance director echoed what everyone has said....

That it's okay for a troop to have investments (CDs, etc.)

And, yes, the troop assets belong to the CO.