Avoid Being a Victim of Fraud – Fall 2008
Save the Day with Good Sales Practices – Spring 2005
Super Sales Secrets – Spring 2005
Ask A Pro: About Making The Sale - Spring 2005
Basics vs. Extras – Fall 2004
Fraud? Say it isn’t so! – Fall 2003
Ask A Pro: About Bounced Checks – Fall 2003
Wish I Knew Then What I Know Now - Record-keeping Advice from Fundraising Pros – Spring 2001
Raising Money or Raising Hackles: The importance of setting realistic goals – Spring 2000
Successfully Navigating Your Cash Flow – Fall 1998
Money Business – Spring 1997
Protect Yourself: Get It in Writing – Spring 1997
Avoid Being a Victim of Fraud |
Fall 2008 |
The amounts of stolen money are hard to believe. $131,000. $35,000. $20,000. These figures, according to police, are how much was embezzled by dishonest parent group volunteers in three separate cases last year. It’s difficult to swallow. But sometimes volunteers – people whom you may have known for years, people you trust – do not always have the best of intentions when it comes to safeguarding your non-profit group’s assets.
“Long after my term as PTA President, I would get these calls from vendors who hadn’t been paid and families who hadn’t received merchandise,” recalls Terry Barr of Redmond, Washington. “I started making phone calls, beginning with the treasurer who was very evasive.”
After further research, Terry learned that the bank account had been closed. The principal was in the dark. And the elementary school, which her children no longer attended, was out $24,000. It’s a story being heard more and more – but there are preventative steps you can take as a PTO leader to avoid becoming a victim of fraud.
Two Heads are Better than One
Always require two signatures on every
check and never leave individuals
alone with cash. A finance committee,
comprised of the president and two
board members, should review all
transactions and bank statements
monthly. A complete audit by a third
party, preferably a certified accountant,
should be conducted annually.
Deposit Cash Daily
Never leave money unsecured in
unlocked containers. Don’t allow
volunteers to take cash home.
Avoid leaving cash at school
overnight no matter how late
it is or how tired you are after
the event is over. Once money is
counted, each person should sign a “funds received” form and put the
money in a locked box for the treasurer
to deposit within 24 hours. Petty cash
should not exceed $100.
Keep it Formal
No payments should be made directly
from daily cash receipts. Develop
a paper trail by requiring financial
requests, vouchers or reimbursement
forms before any payment is made to
a volunteer or vendor. And remember,
two people should always be present
whether counting or distributing
money. A common approach is to have
one person (a secretary for example)
prepare the invoice and check request,
and two others (president and treasurer)
to write and sign the check.
Get Insurance
Even wellcrafted
cash
controls
cannot
protect every
non-profit
group from
theft. By purchasing
a fidelity
bond, groups
insure that if
any money is
stolen, it will
be recovered.
Liability
insurance
to protect
officers,
board
members
and other third parties also is a good
idea. Any agency can provide this
coverage; however, you may want to
contact other parent groups in your area
for references.
Save the Day with Good Sales Practices |
Spring 2005 |
Don't worry that you are not a born salesperson; in truth, few people are. Remember, when conducting a fundraiser, think like a small business owner whose livelihood (a.k.a. the fundraising goal) depends on good planning and getting people involved who want to help the cause — as a volunteer, as a supporter, or both. So, how can you “make it” (or fake it) as the super salesperson who has both the plan and the chutzpa to motivate others to sign the volunteer list and/or sign the check and order form? Frank Miller, a seasoned fundraising sales professional in College Grove, TN, offers five attributes of a super salesperson:
- Listener
- Realist
- Organizer
- Doer
- Sincere
Miller says that these qualities can be applied by anyone who is brave enough to flex some muscle and lead the next fundraiser.
Let's Start With Perception
“Many people perceive the best salespeople to be ‘look at me' types,” Miller says. In fact, a selling situation is less about what the salesperson says and more about what the salesperson hears. “A good salesperson is a listener who quietly motivates others,” says Miller. In the case of gaining volunteer support of a program, it is the Committee lead (principal, parent or teacher) who “sells” members of their group toward a common goal.
There are ways of making the goal meaningful: Make sure it specifies where the money will go and quantifies the group effort. Set a realistic sales goal and break it down. For instance, suggest a total dollar amount for the group and for each individual salesperson. If you have someone whose inclination is to sell nothing, get them to sell just two or three items. That still helps with the group's overall goal. The concept of “the whole is greater than the sum of its parts” applies here, and you can reinforce that in your sales pitch to your group.
The Reality Of Being Prepared
Super salespeople are prepared and organized. You should give written instructions or mini job descriptions of what is expected from each support role, including an estimate of time commitments. You can break time blocks into two, four, eight-hour or more increments, increasing the likelihood of a match with potential volunteers. Prepare your sales force, parents and children alike, with a short script that focuses first on the school's specific need (goal) and follows with the product(s) you are selling.
Distribute the script to your sales team and encourage members to practice it with their families. Something to think about: A parent's commitment to a program rubs off on their child and the more likely the child will reach his or her individual goal. Take note: Genuine enthusiasm and eye contact are important to the scripted sales pitch. The first 30 seconds—and in some cases less—will determine whether you capture your listener's attention.
A Few Can Really Fly
A super salesperson is a doer, according to Miller. Not only do they serve as the team lead and champion for the cause, they get right in there with the team to make sales calls, to count orders, to deliver products, to solve problems. They walk the walk, which in turn spurns others on to emulate them. Miller says the best practice that a super salesperson can offer is sincerity. “If a volunteer knows they are genuinely wanted and needed, they are more likely to sign on with you. If a potential customer knows their support means everything to the success of your program, and you present your product in a positive light, they are more likely to buy from you.” Miller sums up: “Fundraising works better with a lot of people doing a little — not a few people doing a lot.” And, Fundraising Success (with a capital “S”) happens when a few super salespeople fly along the fundraising chain to make everything and everyone feel worthwhile.
Super Sales Secrets |
Spring 2005 |
- Emphasize setting a personal challenge goal Have volunteers make a commitment to be their group or subgroup’s best salesperson. Structure their sales efforts to emphasize achievement, not failure.
- Sellers state their solo goal out loud By publicly stating what you’ll accomplish to your peer group, you’ve reinforced the commitment.
- Make a prospect list Volunteers should make a list of prospective customers before they start. Review it and make sure they have at least ten targets.
- Define your best customers Stick to the people you know— friends, relatives, neighbors, etc. Don’t forget coworkers and out-of-town contacts for your major fundraisers.
- Rehearse the sales pitch Have everyone practice your group’s sales pitch at home, making sure the goal is stated. Fine tune your two-sentence value proposition and make sure that every seller uses it.
- Be armed and dangerous Be prepared. Volunteeers should carry their order form and sales materials wherever they go. You never know when a good prospect will emerge!
- Use the power of “because” Use the word “because” when stating the group’s goal and your first request for help. It’s an extremely potent trigger word.
- Ask for the order Always include a direct request for an order in your sales script after the because statement. “Can you help us meet our goal?”
- Personalize by picking favorites Tell each volunteer to find one or two items that they like and then promote those enthusiastically.“These green ones are great.”
- Ask for more business After the initial order is placed, offer supplemental items for more revenue or ask for referrals, etc. Ask these questions:
“Can I show you another program we’re offering because it’s a great deal too?”
“Can you think of anyone else I should contact?”
- Make it easy to buy Do everything you can to make buying your offering easier. Offer to fill out the form yourself. Remind the prospect that a certain item makes a good gift and that it’s all for a good cause.
Kimberly Reynolds left a career in high-tech sales to apply her business expertise to the world of fundraising for non-profit groups. Author of Fundraising Success, Reynolds has helped hundreds of school, church and youth groups maximize their fundraising success. This article excerpt was edited and reprinted with permission, all rights reserved.
Ask A Pro: About Making The Sale |
Spring 2005 |
As we spring into another fundraising season where warm weather competes for your attention, Fundraising Edge
went forward and got answers that can help your school raise more funds at the next drive.
We asked two fundraising pros how they coach their groups to succeed.
"If your group presents a quality product line to the community, to which the buyers respond favorably, your profit will stay consistent and grow through the years. Parents, friends and relatives actually look forward to your annual sale, increasing their order from year to year, telling their friends how good the products are. Oftentimes a school changes fundraising companies annually, thinking that another company or program might work better. However, if the quality of products is inconsistent or service provided is inferior, community trust is broken. The buyer loses confidence in the product sold and, therefore, credibility of the school or school group suffers. People are less likely to support the sale next time. It takes years to build community loyalty and support! If something works for you, stay with it!"
- Elisabeth Jonas, Fundraising Professional, Duluth, GA
My focus is on what will cause the kids to get the program materials out of their backpacks and out of their football or cheerleading gear bags. The chance for something to happen is great if they get the catalog out of their bags and into the hands of mom or dad. Once in the right hands, the program has to cover a wide variety of interests, appealing to singles, moms, dads, older adults, teenagers, adolescents, and children. Then the program has to cover categories of interest, whether it is food, seasonal and holiday items, kitchen gadgets, accessories, and more. More variety means more selling tools on the front line. But it still all comes back to motivating the kid to take the brochure out of the backpack. Strong incentives and a good product mix work well with my groups."
- Gary Ulrich, Fundraising Professional, Carlisle, PA
Basics vs. Extras |
Fall 2004 |
Most baby boomers remember selling candy, fruitcakes (popular holiday food), and other items to help finance “extras” such as school field trips or language camps. But as financial pressures strain educa-tion budgets, many schools are turning to product fundraisers to pay for “basics”—like classroom supplies— fast fueling a debate on the merits of fundraising for
basics.
What are some key considerations when it comes to where the money will be spent?
Fundraising Edge talked to key education and industry representatives who offered their opinions about spending fundraising dollars on either the basics or the extras:
“In making fundraising decisions, it is important that parents feel money is being raised to help students. If they see a direct correlation between the money and academic progress, they are usually very willing to participate.”
—
Dr. Vincent L. Ferrandino,
Executive Director, National
Association of Elementary School
Principals
“As kids, we considered the basics to be music, art, drama, and other classes that enriched our core education. For kids in school today, these programs are often the luxuries paid for by fundraising, and that is unfortunate. The new basics are now supplies and other operational budget items.”
—Jan Harp Domene, Secretary/Treasurer, National PTA
“The line has definitely been moving, as PTOs are being asked to fund more things that were once considered basics. ‘Appropriate’ has to be determined by the local group, as only they can gauge the actual need and what will be lost if the group doesn’t support an expen-diture. The extras that PTOs have commonly funded—like field trips and arts and enrichment performers and playgrounds—can’t be a casualty of this trend. Those are exactly the things that make schools special and create communities beyond brick and mortar.
Moreover, when PTOs move the focus to basics, participation levels drop. It’s much easier to gain enthusiastic support for a field trip than it is to get everyone behind paying for the school copier.”
—Tim Sullivan, President and Founder, PTO Today, Inc.
“In some areas of the country, gaps in educational funding
exist and fundraising is required. To the credit of the local parent
groups and school administrators, they’re taking the initiative to fill
the gaps. In the case of public schools, parents don’t have the luxury of waiting for government to grant them more tax dollars.”
— Russell Lemieux, Executive Director, Association of Fund-Raising Distributors and Suppliers
Fraud? Say it isn’t so! |
Fall 2003 |
Did you know that the average fraud scheme goes undetected for 18 months? Or, that 93 percent of frauds are by first-time perpetrators? How about this? Dozens of parent organizations were victims of embezzlement by dishonest volunteers last year.
It’s hard to swallow. But sometimes volunteers – people whom you may have known for years, people you trust – do not always have the best of intentions when it comes to safeguarding your non-profit group’s assets.
“Long after my term as PTA President, I would get these calls from vendors who hadn’t been paid, and families who hadn’t received prize merchandise,” recalls Terry Barr, Redmond, WA. “I started making phone calls, beginning with the treasurer who was very evasive and now won’t take my calls.”
After further research, Terry learned that the bank account had been closed. The principal was in the dark. And the elementary school, which her children no longer attend, was out $24,000.
“The police confiscated the treasurer’s records and they say they’re investigating, but no arrests have been made,” reports Terry. And now, because of her fiduciary responsibilities as a PTA officer at the time the theft occurred, Terry has stepped in to help the school recover the loss and its reputation. How did this happen? And, more importantly, how could it have been avoided?
The Fraud Triangle
Many parent groups and non-profit organizations start by having clearly written by-laws and strong policies and procedures that detail punitive action for misconduct by one of its officers or members. But the best way to avoid being swindled, most organization leaders report, is to institute a few simple checks and balances and respect a 50-year-old theory developed by sociologist Donald R. Cressey.
According to Cressey, three circumstances must be in place to entice a seemingly trustworthy person to steal.
- Motive — Even “good” people sometimes find themselves financially stretched (sick parent, unemployed spouse, child in college) or suffering from an addiction to drugs, alcohol, gambling or the inability to live within their means.
- Opportunity — While carrying out their duties, vulnerable volunteers may be tempted if they believe they “can get away with it” because of lack of oversight stemming from poor business practices.
- Rationalization — First – second – and even third-time embezzlers will convince themselves that they “deserve more for their hard work,” or that the organization “will never miss the money.”
According to Terry and others who’ve been burned, the best defense is to dismantle the triangle. Remove “opportunity” from the equation. “You must have security measures and no one person totally responsible. I repeat NO ONE PERSON should have sole custody of the money.”
Two heads are better than one
Always require two signatures on every check and never leave people alone with cash. A finance committee – comprised of the president and two board members – should review all transactions and bank statements monthly. A complete audit by a third-party – preferably a certified public accountant – should be conducted annually.
Deposit cash daily
Never leave money unsecured in unlocked containers. Don’t allow volunteers to take cash home. Avoid leaving cash at school overnight – no matter how late it is or how tired you are after the event is over. Once money is counted, each person signs a “funds received” form and puts the money in a locked box for the treasurer to deposit. Petty cash funds should not exceed $100.
Keep it formal
No payments should be made directly from daily cash receipts. Develop a paper trail by requiring financial requests, vouchers or reimbursement forms before any payment is made to a volunteer or vendor. And remember, two people should always be present whether counting OR distributing money. A common approach is to have one person (a secretary for example) prepare the invoice and check request, and two others (president and treasurer) to write and sign the check.
Get insurance
Even well-crafted cash controls cannot protect every non-profit group from theft. By purchasing a fidelity bond, groups insure that if any money is stolen, it will be recovered. Liability insurance to protect the officers and members and other third parties also is a good idea. Any agency can provide this coverage, however, there are a couple of agencies that specialize in group insurance for parent groups and may offer better rates: Association Insurance Management (AIM Insurance) out of Dallas, TX; and R.V. Nuccio and Associates, based in California.
Additional Resources: “Stealing from the PTO,” by Michelle Bates Deakin for PTO Today Magazine, October 2002; “Essential Business and Practices Protect the Money You Earn” by Tim Dwyer for Momentum Magazine, February/March 2003
Ask A Pro: About Bounced Checks |
Fall 2003 |
It happens. We don't like it when it happens. And it's usually a simple oversight. But how you handle the situation can make or break how you and your organization's fundraising efforts fare - now and in the future. We asked a couple of fund-raising veterans to tell us how they counsel non-profit groups faced with the dilemma of a bounced check.
Run the check through the bank a second time. If it bounces again, place a courtesy phone call to the person who wrote the check. Some call the bank first before making the second deposit attempt. If the check-writer is non-responsive, send a certified letter stating the check was returned and for what reason (e.g., insufficient funds) and that the party has 10 days to provide a cashier's check or money order for the appropriate amount. Act fast, the longer you wait, the tougher it is to collect.
— Judy Monroe, Former Treasurer, Texas State PTA
Our programs are all pre-paid. Before product is ordered, groups have the money in-hand. If a check bounces, the product won't be released until payment is received. Many groups still prefer payment on delivery - or post-pay - but the opportunity for bad debt increases along with the potential for profits. Some groups tackle the problem by asking the parents of the enrolled student to have supporters write personal checks made out to them. The parent then writes one check to the school PTA or PTO to cover all the orders their family has collected. It's easier for the parents to follow-up with friends, neighbors and co-workers and it cuts in half the time spent on collections.
— David Crede, Fundraising Professional, Lincoln, Delaware
Wish I Knew Then What I Know Now - Record-keeping Advice from Fundraising Pros |
Spring 2001 |
Ever felt like that before? Ask any former fundraising chair that question and you'll get an unequivocal, "YES!" Then they'll tell you how their predecessor could have made their job easier.
"Keep good notes. Include procedures for tracking money, organizing volunteers. No information is too trivial," according to one fundraising volunteer.
Otherwise, as California principal Susan Van Zant put it, "First-time volunteers are left to devise their own systems which often create more work for the group and the company." Indeed, with a good record-keeping system in place, experts say organizations can save a lot of time.
Cynthia Francis Gensheimer, an avid school fundraiser and author of Raising Funds for Your Child's School, agrees. "Imagine how much easier your job would be as first-time chair of an event if you were handed a file from your predecessor containing a report of what he or she had done the year before,"she notes. "When it comes to fund-raisers that are annual events, keeping good records from year to year is imperative."
Just what is a good record-keeping system? One state PTA describes it as easy-to-use and understand; reliable and accurate; and designed to provide financial information quickly. Most office supply stores carry products for simple record keeping with complete instructions for their use. There also are com- puter software programs available. Members of the National PTA may access the organization's Money Matters which contains very specific guidelines useful to PTA treasurers.
Many professional fundraising companies offer suggestions, if not written guidelines, for how their particular program should be conducted, along with appropriate materials (e.g. order forms, collection envelopes, tally sheets, etc.) to help groups execute the fundraising drive. After all, it is in their best interest that the fundraising chair is organized and successful in keeping track of the program's progress.
The Music Booster Manual, published by the National Association for Music Education, suggests that each fundraising project file contain a permanent record of: financial goal and results; number of participants and total work-hours expended; breakdown of areas of responsibility; support requirements; committee assignments; problems encountered and recommendations for improvement.
According to Gensheimer, the best-run PTAs and PTOs ask the people who chair their fund-raisers to submit reports a few weeks after the event. These reports should contain information mentioned above, as well as a calendar or timeline - when to begin interviewing fundraisers, soliciting volunteers, promoting the event and so on. She also suggests keeping copies of fliers that were sent to parents, memos to teachers, signs posted at school, and simple reminders.
Once the fundraiser has been evaluated and a report filed, it's a good idea to provide a copy to the school administrator or advisor and the fundraising company with whom you partnered. That way everybody will be in the loop and ready to make next year's fundraising activity better than ever.
References: Raising Funds for your Child's School, publisher Walker and Company, NY, NY.
Raising Money or Raising Hackles: The importance of setting realistic goals |
Spring 2000 |
Her son's school needed two new baseball fields and Kim Whittemore didn't have the patience to wait for the glacial pace typical for most school acquisitions. So her first move as the brand new PTA president for the Cumming, GA, elementary school was an obvious one. She went to the the local county parks and recreation department; found out how much money it would take to build the fields; and took her proposal to the school's PTA and principal.
"Everybody was behind it. The students. The teachers. The parents," says Whittemore. She didn't know it at the time, but Kim's "first move" was a masterstroke in fundraising according to professionals in the field.
"There's nothing more important to a fundraiser's success than a meaningful goal. If its something they believe in, parents and kids will always rise to the occasion," according to Russ Colombo, vice president of sales for a regional fundraising firm based in Houston, TX.
Jesse Kenney, owner of a fundraising company in Watkinsville, GA, agrees. "We can't really get started until we know more about the group's goals."
Indeed, Whittemore's school rallied behind the baseball field project netting $40,000 in school profits (instead of the required $30,000) leaving enough money to eliminate a spring fundraiser and still pay for the school's planned sock hop and tennis tournament.
"If you build it, they will come"
Jesse Kenney's company had the formidable task of working with Whittemore's school to raise the necessary funds to build the baseball fields. And they did their homework.
"One of the first things we try to do is keep everybody focused on the Big Picture. How much money do you need and what kind of program and service mix is going to get you there?" reports Kenney. He knows before he arrives at any school, what the enrollment is and, has a good idea (based on experience) of the average number of items each family is likely to sell. Taking those numbers and the profits the school will make per item sold, Kenney can predict for the sponsor how much they can expect to put in the bank at the end of a fundraising sale.
"Do a few and do them well"
The key to fundraising success, according to Kenney and others, is participation -- a chronic problem in those schools where too many fundraisers have led to burnout. Colombo warns groups to make sure their goals are realistic and that people have time to "recover" before launching another fundraiser. "If people come to expect one fundraiser after another, they won't know which one to grab on to. They'll say 'I'll wait for the next one' and they never get it done."
It's a mantra heard among successful fundraising experts: Do a few and do them well. When faced with lofty fundraising goals, Colombo, a former coach, approaches his groups with a year-round plan featuring two major product sales — one in the fall and one in the spring — interspersed with only a couple of service projects that promote camaraderie, like a car wash and a spaghetti dinner. "That way volunteers still feel good about what they're doing without jeopardizing the overall impact of product sales which, frankly, are the bigger money makers."
Once a band director himself, Kenney, also knows how to build enthusiasm and motivate kids. According to Whittemore, "We gave Jesse a few minutes in an assembly with each grade level to explain the particulars," says Whittemore. "It was more like a pep rally for the school, the baseball fields, and what we were all going to do to make it happen." She reports that her "field of dreams fundraiser" had 95% participation with each family selling an average of 11 items each. Better yet, six weeks later the North Georgia school had two new baseball fields.
Successfully Navigating Your Cash Flow |
Fall 1998 |
According to a survey by the Association of Fund-Raising Distributors & Suppliers, product fundraising programs raise nearly $2 billion net profit each year for schools, school groups and other non-profit organizations. Schools and school groups account for 88 percent of those profits. The money pays for computers, field trips, athletic, music and art programs no longer covered by shrinking school budgets. Clearly, the practice of fundraising is serving an increasingly significant role in providing resources for thousands of school and youth programs. "Fundraising is simply a means to an end," according to Carol Talbot, a parent in Columbus, GA, and current treasurer for the Georgia State PTA. The typical school fundraising drive lasts only the few weeks it takes to reach an immediate goal. But despite its short-term nature, Talbot believes fundraising activities should be approached in a professional manner and run like a business. "Most of running a fundraising program is common sense," says Talbot. But, she cautions that a well-meaning and overly trusting volunteer is vulnerable to careless mistakes — sometimes with devastating results. "I know of units who went thousands of dollars in debt due to mismanagement," Monroe reports. Ohio PTA's Executive Director Barbara Sprague agrees, "We have PTAs with budgets that range from $3,000 to $100,000. And, I'll bet most of these units, regardless of their ability to absorb a significant loss, have paid a price, at one time or another, for carelessness." These losses can severely hamper a parent group's ability to meet their organization's goals or fund new student programs. But, many believe these costly lessons can be avoided with careful recordkeeping and a strong buddy system.
Handling Money:
Two heads are better than one
Whenever money is involved, experienced fundraisers say that two people should share the job of handling the money. "If two people are counting, recording and verifying each other's amounts, you'll catch each other," according to Monroe. Ideally, each will have experience and feel comfortable working with money. But Kerry McCullough, a fundraising company owner in El Paso, TX, believes math skills are secondary to good organizational skills. "To be successful, treasurers and fundraising chairpersons need an accurate paper trail." It's also a good idea to assign money handling responsibilities to individuals from separate households. Even innocent mistakes made by a husband and wife can be misconstrued, experts say. Further-more, many groups provide fidelity bond insurance to cover losses resulting from honest mistakes. Band booster Susan Farris says her group uses a "drop box" buddy system. "We've got 360 students and just as many booster members. You can imagine how difficult it is to collect all the forms and money on a particular day and at a pre-determined time." Her club installed a "drop box" to which only she and the president have a key. "That way, we control who has access to the money. And the kids have a central, secure place to deliver their money."
Before deposits, think like a teller
"Fundraising groups can make it easy for themselves and their bank if they prepare their deposits properly," according to Lou Gresham, branch manager, Premier Bank in Acworth, GA. Her first advice: make sure all checks are signed and endorsed properly with your organization's name and account number. Many groups encourage student and parent volunteers to include the student's first and last name on every check. That way, if a check bounces, the affected student is easily identified and the product order can be adjusted. When counting the money, use a calculator. Better yet, Gresham suggests using a printing calculator to actually record each check amount. Then attach the tape printout to the bundled checks. She also recommends that bills be "strapped" together by denomination using pre-printed, self-adhesive paper straps. Many volunteers use recordkeeping systems or accounting software, to manage cash flow. However, Talbot warns that any bookkeeping system is only as good as the data it receives. It must be updated regularly and accurately for fundraising organizers to reap the full benefits. Deposits should also be made in a timely fashion, daily if possible and, again, by at least two people. Lisa Newburn, a representative of North Carolina-based First Union, also suggests that volunteers vary the times they make deposits and avoid forming any type of pattern that may be observed. Between visits to the bank, make arrangements to keep money under lock and key.
What to do when checks bounce
Unfortunately, fundraising is not immune from the occasional bad check. So, as a prudent business owner would take measures to collect the debt, so should fundraising organizations, experts advise. "You are serving as a steward for your organization and as such you must watch the money wisely and pursue it legally if necessary," says Texas PTA Treasurer Monroe. In her workshops, she suggests running the check through the bank a second time. If the check bounces again, many fundraising coordinators will place a courtesy phone call to the person who wrote the check.Others suggest calling the bank first before making the second deposit attempt. At most banks, a check can be presented 2-3 times for deposit. In most cases, it is simply a matter of timing. However, if the person who issued the bad check is non-responsive, Monroe and her colleagues suggest the same procedure followed by most businesses: n Send a certified letter (which requires a signature and provides the sender with a proof of mailing) to the person who issued the check;n State in the letter that the check was returned and for what reason (e.g., insufficient funds) and that the party has 10 days to provide a cashier's check or money order for the appropriate amount. Experienced fundraisers agree that timeliness is critical. The longer you wait to follow-through on bad debts, the tougher it is to collect.
Look to the professionals
There are almost as many fundraising programs as there are products and services available today. Some are structured as a pre-pay — orders are paid for upfront. Other programs are set-up as post-pay — orders are placed in advance and product is paid for upon delivery. Each organization must work with their fundraising company to determine what system will work best for their group. Fundraising companies will provide simple instructions to volunteers on how to complete the paperwork. They also have the knowledge and expertise to provide information on tax laws, recordkeeping and other administrative issues. "We have an obligation to make this easy on sponsors," says Frank Miller, a Tennessee-based professional fundraiser. "You can't always avoid problems, but you can show people how to be prepared for and deal with them." For example, Miller's company provides sponsoring organizations with collection envelopes, order forms and other necessary paperwork along with detailed instructions on how to complete the paperwork, samples of completed forms, as well as computer generated reports to track results. These are just some of the innovative services available to help make fundraising drives painless and profitable for volunteers. Such services however, may affect the cost of the program. It is important that sponsoring organizations understand and thoroughly evaluate services before reaching an agreement with a fundraiser. Summing up her feeelings about fundraising, band booster Susan Farris notes, "We aren't doing this just to make money. We're doing this so our kids can have instructors, new sheet music, participate in local and national competitions." Indeed, fundraising has become a significant resource for American youth. It is more important than ever that fundraising activities and the monies raised through these activities be handled professionally and with great care.
Additional Resources: The Official Football Fundraiser's Guide by J. Alden Briggs, Jr., published by Boosters Clubs of America; PTA Money Matters, published by The National PTA; Raising Funds for Your Child's School by Cynthia Francis Gensheimer, published by Walker and Company, New York, NY and Earning More Funds by Chip and Ralfie Blasius published by B.C. Creations, Fort Wayne, IN.
Money Business |
Spring 1997 |
Sometimes non-profit groups will assign an inexperienced volunteer to track money during a fundraiser. This can lead to problems. Here are some money handling tips to consider:
- Assign at least two people (appoint one to serve as treasurer) who are experienced and comfortable with handling money. Both should be present when money collected from fundraiser is counted (preferably in the school) and always using calculators.
- Both individuals should sign all requests for money, using a numbered receipt book for all cash disbursements.
- It is a good idea for both of these individuals to be from separate households and perhaps covered by a fidelity bond to cover losses resulting from honest mistakes or the rare dishonest acts.
- Accurate records of incoming revenue and outgoing expenses should be recorded by the treasurer and regular reports submitted to organization leaders.
- Deposit money in a timely manner — preferably daily. In between bank deposits, make arrangements to keep money under lock and key.
References: PTA Money Matters © 1994 National PTA and the 1993-94 Georgia PTA Handbook.
Protect Yourself: Get It in Writing |
Spring 1997 |
More and more fundraising companies are asking for written contracts. It’s a good idea because it protects you, your organization and the fundraising company to have all major decisions in writing. With a contractual agreement, you both assume responsibility for complying with the terms, but you also begin the fundraising project with a clear understanding of who is responsible for what. Here are some things to look for when reviewing a fundraising contract:
- Double check all the numbers. Are the costs, percentages, etc., the same as those you agreed on?
- Are all of the services you want included? (For example: kick-off presentations, incentive programs, tallying, packing, shipping.) Is it clear that the company covers the cost for these services?
- Are the promotional materials you reviewed and approved listed? (take-home brochures, display kit, sample packs, etc.)
- Are dates for payment and product delivery included and consistent with your verbal agreement?
- Is there a clause covering the procedure for handling damaged, unsold, or returned merchandise?
- Also, make sure the contract is clearly an agreement between two organizations, NOT between two individuals. Signatures on the written contract should appear:
___________________________________
(fundraising company name)
by:________________________________
(company’s representative)
___________________________________
(organization’s name)
by:________________________________
(organization’s representative)
References: PTA Money Matters,© 1994 National PTA The Official Soccer Fundraiser’s Guide/Booster Clubs of America “Improving Your Fund-Raising Sales,” John R. Olsen, Ph.D., Athletic Purchasing & Facilities, July 1982. AFRDS, model contract
