Fundraising events are often held by non-profit organizations to promote the mission of the organization and raise funds to support the organization and its programs. Sporting events and activities are also very common, especially at secondary-level schools. Such events can often generate a significant amount of revenue for the organization. Revenue generated may include donations, ticket sales, table sponsorships, auction revenue, and concession sales. While many donations and event sales are made using credit cards and checks, cash remains a popular form of payment at these events, especially sporting events.
To better ensure the proper handling of cash receipts during events and activities, organizations should provide volunteers with a detailed list of cash collection and deposit procedures in advance of the event. Consider having each volunteer acknowledge that they received and understand the cash collections and deposit procedures. Additionally, a list of these procedures should be kept in the cash box as a reminder. Such procedures may consist of the following and should help mitigate the risk of improper collection processes:
- Upon start up, utilize a log to document which individuals were given a cash box and the amount of the start-up change/currency.
- Keep a standard amount of start-up change/currency in each cash box.
- Require the individual checking out the cash to sign the log indicating his/her agreement with the start-up amount.
- Do not allow commingling of personal money with donations.
- Never utilize cash collections for last minute purchases the day of an event.
- Refrain from making change unless a patron has made a purchase/donation.
- Each event's collections should be documented via standardized forms.
- The forms should be remitted to the Finance Office, along with the physical cash collections, immediately following the event.
- Accept checks made out to the organization only.
- Immediately endorse the checks with a restrictive endorsement payable to the organization.
- Two volunteers or employees should independently count the cash immediately after the event. The two cash counts should be compared to make sure the collections are counted properly.
- Utilize lockable bank bags to secure cash bag and collections.
- For concession-type activities, consider reconciling inventory to cash receipts.
- Consider tracking the average cash receipts per individual per event and investigate anything not meeting your expectation based on the average receipts per event.
For events with ticket income:
- Use pre-numbered tickets.
- Document all volunteers who were issued tickets and which numbers.
- Reconcile tickets sold to cash received.
For events taking place over several days:
- Collect funds daily and deposit to Finance Office.
Other considerations include encouraging the "responsible party" (Athletic Director /Principal/ Executive Director/ Director of Development) to be present at all events and to transport the cash box to and from the fundraising event. Cash should be safeguarded when not in use and maintained in a safe in a secure location at the organization. Additionally, limit, as much as possible, the number of volunteers who have access to the cash box during the event. In advance of the event, the organization should establish a limit regarding the acceptance of larger bills, such as $50 or $100.
Adopting these controls will better ensure the safe and appropriate handling of cash at fundraising events and activities.
Under U.S. Treasury Department guidelines, we hereby inform you that any tax advice contained in this communication is not intended or written to be used, and cannot be used by you for the purpose of avoiding penalties that may be imposed on you by the Internal Revenue Service, or for the purpose of promoting, marketing or recommending to another party any transaction or matter addressed within this tax advice. Further, RubinBrown LLP imposes no limitation on any recipient of this tax advice on the disclosure of the tax treatment or tax strategies or tax structuring described herein.
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