It depends what you mean by "account". A lot of accounts are just fictions created in your computer software, and you can create those to your heart's content without jeopardizing your nonprofit status. Surely you don't mean creating actual bank accounts for them? Anyway, nonprofit refers to what you do with the money once you get it, not how your organize your accounts. And certainly if by "credit" you mean you want to acknowledge your best fundraisers, I can assure you every nonprofit does that.

I am not sure if this could change from state to state in the USA.  It is a common practice in this area for members to have "trip accounts".  They can raise money for these accounts and also pay directly.  It is important to get the advice of an accountant familiar with non-profits to help set this up and make sure everything meets non-profit practices.  It would be great to have an accountant on your board.

 

As I (not an accountant) understand it, the important issue is what is done with funds that are in excess of those needed for the individual's travel.  Money that has been paid for the trip can be refunded.  Money raised through fundraisers can not be refunded.  There should be policy for what is done with this money.  Whenever you are raising money you should be clear about the purpose for raising the money and what will be done with it if you exceed the amount needed for the stated purpose.

 

 

Hi, Doborah.

 

Like Allen and Robert, I can't really answer without more information. What kind of choir do you have? Since you mention non-profit, I assume that you are a community choir rather than a school choir or church choir (both of which, of course, are about as non-profit as you can get!).

 

As a community choir, whether you have non-profit status or not you MUST have a treasurer as one of your elected officers, with responsibility to account for all funds coming in and all funds going out. Since this is an elected office your treasurer is not required to be a CPA, or even to have the ability to keep books properly, although there are computer programs that make that fairly easy these days (except for the daunting task of getting them set up in the first place, which IS a job for a professional!).

 

I'm involved in several community music organizations: a community band, a community orchestra, and a community organization that produces a Summer Musical each year. They all have treasurers who report to the Board on a regular basis. With this kind of setup any questions of tracking individual contributions is taken care of because one individual has that responsibility.

 

With my college ensembles, there's a lot more variability. My predecesor at this school (both of them, actually) were pretty free-wheeling and had private accounts in an area bank for all incme and all expense payments. When I took over, the state accounting system was revised, that kind of freedom was shut down, and now every penny has to go through the University Treasurer. Within our Music Department each ensemble has its own budget (such as it may be these days!), but that is simply a bookkeeping entry in the Departmental account and is NOT a separate account in any way.

 

But I believe (and I claim no expertise) that Allen and robert are quite correct in that there is no legal limit to the amount a non-profit can raise, no matter how it is done. (Well, assuming that it's done legally, of course!) There MAY be limits on how it can be spent, once it is raised. We had a fairly famous example right here of a String Quartet in Residence which broke up, one of whose members took the others to court over the distribution of assets, and the individual WON because his lawyer convinced a judge that the required accounting procedures had not taken place.

 

The bottom line is to get good legal advice, not based on what you believe or on what other choral conductors believe, but on what is considered both legal and good accounting practice. The follow that advice. No dilema at all!

 

All the best,

 

John

 

 

My choir is a community choir.  I have an excellent  CPA on our board and she is saying that our practice of crediting our fundraiser accounts is akin to keeping two sets of books.  She is saying that all fundraising money no matter if one chorister raises it or all of them raise it, must go for all of the choristers.  That instead of keeping individual accounting eg Susie sells $100.00 of goods with a  40% return.  I then let Susie know she has $40.00 in a fundraising account earmarked towards her trip, instead of $40.00 towards the entire group's trip.  I am not keeping separate accounts, just keeping track of each chorister's contribution.  W have choristers who sell nothing or a great deal.  The incentive for the ones who raise a lot of money through our fundraisers is to help finance the annual trip.  We will have to stop traveling with the choir if we have to raise money for everyone.  Any comments or solutions? 

Hi Deborah,

I use Charms music software... they usually charge something like $250.00 per year or slightly less for a multi year subscription and you have many options with that management software including creating accounts for each choir member/tracking music lent out via a bar code scanner/grading (for school teachers) and attendance (also using the bar scanner)

It really seems to help a semi-organized person such as myself keep more organized.. and you can offer the option of allowing Internet access to see their account balance with a login name and a password they create.

They aren't paying me to say this by the way... I just got tired of doing pen and paper year after year and getting out my abacus everytime the kids finished up another fundraiser.

-Mike

Hi, Deborah--

   You might consider just keeping track of how much each chorister has fundraised in an Excel spreadsheet and putting the money into one large account.  You can disperse the final amount of funds raised by each chorister to each chorister assuming you've kept good records and that they've gotten their money to you to deposit.  This way there are "accounts" and not literal accounts, but it is one way of handling the problem.

 

Good luck!

AJ Lund

Deborah:

 

We fundraise every year for a HS choir trip. Our Music Boosters are the 501c3 rather than the choir itself. We have a general account for the department and a student account for trip related funds. We do not disperse money to students. I maintain an index card for each singer (I find this easier to access because the computer is not always available in our shared office). The singers fundraise and solicit donations, I notate the specific amounts on individuals' index cards, and I then turn the money into our Booster treasurer to deposit into the student account. When trip payments are due they singers let me know how much to credit them from their "account" and the students write the Boosters a check for the balance. Trip bills are paid using one check from the Boosters' student account. Any remaining money rolls over to the next year.  When students leave the group or graduate their accounts become donations to the choir.