How does the source of 4-H funds affect using the funds in your 4-H group?
The source of money for a 4-H group can influence how the funds can be used.
Many 4-H groups have group treasuries with funds to support the educational mission of the 4-H program. Funds may come from a variety of sources and what those sources are has an influence on how the funds can be used. 4-H groups need to record and track the source of funds to ensure the funds are used appropriately in consideration of the source.
Consider the following information with some of the most common sources of funds.
Group dues are the funds that 4-H groups may choose to collect from members to support the educational goals and plans of the group.
- Only collect dues if the group has a planned use for the funds outlined in its annual budget at the beginning of the 4-H year. Work together to determine and mutually agree on how the money is used. Clearly document this discussion and decision in the meeting minutes and group’s annual budget.
- Using dues money is more flexible than other forms of income, but Michigan 4-H requires the usage be educational, discussed and voted upon by all members, and be available for all group members.
Fundraising can be a double win for 4-H groups and their members—youth can learn valuable life skills and the group will add resources to its treasury for future educational opportunities.
- Fundraising should not be the main focus of group activities nor should it exclude any individual from participation. Profits should be used to benefit the entire group’s youth whether or not they participated in a fundraiser.
- An educational component needs to be part of all fundraising activities and a group needs to be able to clearly state the educational value and purpose of the fundraiser.
- Local groups may include fundraising for an occasional community service-based project, however, it is not the intent of 4-H to regularly raise money for others.
- Promotional language matters when using fundraising funds. Fliers and fundraising promotion should outline why the funds are being raised and how they will be used. “All proceeds will go towards…” means all the money raised will go towards that purpose; whereas, “All profits will go towards…” allows the group to cover any expenses of the fund-raiser from the money raised.
- When using fundraiser money, the use must be consistent with the advertised purpose. If the fundraiser did not identify a specific use for the funds outside of 4-H, the public’s assumption is that the money will stay in and be used by the 4-H group. In this instance, the money may not be donated to a group or organization outside 4-H and must remain in the group’s treasury. The use must meet all Michigan 4-H usage requirements.
Sometimes a donor wishes to support the work of the 4-H group. Cash donations do not have to be accepted if the group does not feel they will be able to meet the expectations of that donation.
- If the gift is restricted, meaning the donor asks the funds be used for a particular program or purpose, it is expected the 4-H group will track those funds separately and use them only as requested by the donor. The specific restrictions should be put in writing when the donation is accepted. Even if the restrictions are only implied, it is expected the group will follow those restrictions. Note: The donor cannot specify a certain youth to receive the funds, but can donate to a particular program or event.
- If the gift is unrestricted, the main requirements are to meet the Michigan 4-H criteria for fund usage and have the money used by the 4-H group, not donated to another organization.
- A group’s leadership should meet with the 4-H staff whenever they have questions about the appropriate action for accepting and managing a cash donation.
For more information on sources of income for 4-H groups, the Financial Manual for 4-H Volunteers: Leading the Way to Financial Accountability and the Financial Manual for 4-H Treasurer: A Guide to Managing Money Wisely support 4-H leaders and youth officers in their important fiscal roles.
Michigan State University Extension and Michigan 4-H Youth Development help to prepare young people for successful futures. As a result of career exploration and workforce preparation activities, thousands of Michigan youth are better equipped to make important decisions about their professional future, ready to contribute to the workforce and able to take fiscal responsibility in their personal lives.
To learn about the positive impact of Michigan 4-H youth career preparation, money management and entrepreneurship programs, read the 2016 Impact Report: “Preparing Michigan Youth for Future Employment.”