4-H belongs to the United States.
It's the U.S. Secretary of Agriculture who oversees 4-H and makes sure that anyone who uses the 4-H name is using it for the good of its members. 4-H clubs have permission to use the 4-H name and the Clover emblem, but we must follow all federal, state and local laws. Here are the most important rules for 4-H clubs. The majority of money which funds 4-H comes from local, state and federal tax revenue. Therefore, 4-H clubs are held to a high degree of accountability. Each year, clubs must indicate whether or not they will have financial activity in their club by completing an Indication of Financial Activity form and turning it in to the County Extension Office.
If a club decides to have funds for special club activities, they must open a checking account in a financial institution. This Fact Sheet will help 4-H Clubs understand club finances.
- A 4-H Club must secure an IRS Employer Identification Number before it can open an account. Do not contact the IRS directly. The County Extension office must make the request for an EIN number. Adult volunteers and bankers should not apply for an EIN since they would not be able to provide the appropriate GEN identification information needed by IRS.
- Leaders should not use their personal Social Security number on any fiscal accounts or documentation for the 4-H club.
- Once an EIN number is secured, the club may open a checking account at a local financial institution.
- In addition to the youth elected as treasurer, at least two adults must also be signatories on the account.
- No certificate of deposits or other long term investments are allowed.
- Illinois 4-H clubs are not allowed to obtain or use ATM, debit, or credit cards in the name of the University of Illinois or 4-H.
- Two signatures are required on all checks, preferably that of the treasurer and that of one adult not related to the treasurer.
- Some banks have implemented new policies that do not allow youth less than 18 years to sign checks. In this case, the club should still elect a treasurer, who will fulfill the remaining tasks, including, but not limited to: prepare the financial reports (monthly and annual), write the checks, and balance the bank statements.
- No checks can be written or money spent until a majority of club members have approved it through a vote at a club meeting.
- The motion and vote to spend money must be recorded in the club secretary book.
- Adult volunteers may not unilaterally make decisions about the management and expenditure of club resources without consent of its members.
Raising excessive funds should never be the goal of a 4-H club; conducting educational programs for youth is a club's main purpose. Clubs may only have money in its account equivalent to two years worth of expenses. On the rare occasion the treasury exceeds two year, clubs must prepare and submit the Long Term Spending Plan to the County Director for approval showing how they plan to reduce the amount of money in their account.
Instead of getting approval prior to each expected item, club members can write and approve a yearly budget. For example, members budget $100 for club refreshments at the beginning of the year, the treasurer can write checks for refreshments without additional votes until the total reaches $100. The treasurer should inform members each month how much of the budgeted amount was spent and provide receipts for the expense. Things which come up which were not part of the club budget must still get prior member approval before the expenditure is made.It is important that all budgets and motions be recorded in the secretary's book, including what member made the motion and the vote on the motion. Click here to download a 4-H Club Budget template.
4-H clubs should plan fundraisers only when additional funds are needed to meet the needs of their budget and goals for the coming year. Clubs should not plan and conduct fundraisers every year just because they always have done so. All money raised using the 4-H name and emblem must be used for 4-H educational programs and activities.
- The maximum number of tax exempt fundraisers allowable by Illinois Department of Revenue for 4-H clubs and other charitable organizations is two per year. CHECK HERE for a review of the law.
- Clubs must receive approval at least two weeks prior to any promotion of the fundraiser from the County Extension staff by completing the Fundraising Approval Form,
- Planned fundraisers that are expected to generate more than $1,000 require the additional review of the Unit County Director.
- County Director approval is required for all livestock and horse show fundraisers. In some cases, a club may wish to raise money through a competition event that charges an entry fee. It is important that all risk management policies are followed in these cases. Competition activities represent a higher risk activity and the 4-H American Income Life policy only covers such activity for youth ages 8-18. Adult competitors are not covered by 4-H insurance and should not be allowed to participate. See the complete policy HERE.
- Whether selling a product, soliciting donations, or requesting in-kind support, it is the goal of 4-H to project an image of a high quality, educational organization. Fundraising projects that contain poor quality products or services, that violate general community standards, or that are inconsistent with a youth-oriented educational program, should be avoided.
Raffles or Other Games of Chance
Raffles cannot be conducted by University of Illinois Extension. This policy applies to all Extension Units, 4-H Federations, and other Extension offices. 4-H clubs are also included in this policy. According to Illinois state statutes, a person under the age of 18 years may participate in the conducting of raffles only with the permission of a parent or guardian. To protect our youth and ensure compliance of this statute, 4-H members are not allowed to purchase or sell raffle tickets for any organization sponsoring a raffle which benefits 4-H. Check out the Raffles, Lotteries, Gaming and 4-H Fact Sheet HERE.
Raising Money for Other Groups
If members of a club approve, 4-H clubs may make financial donations to an organization or charity.
- Illinois 4-H clubs must secure approval from the County Director or his/her designee prior to making a contribution of $100 or more to any organization or charity.
- If a club conducts a fundraiser for the purpose of giving the money raised to another organization, you must be sure to inform the public the charity's identity and tell them it won't be kept by the 4-H club.
- The preferred method of payment is for checks to be made directly payable to the designated charity instead of the 4-H club. However, if checks are received in the name of the 4-H club on behalf of the charity, these funds can be deposited into the club account using a separate deposit slip. A single check should be issued to the charitable cause/organization in the exact amount reflected on the deposit slip.
All cash received should be acknowledged with a printed receipt (numbered and dated). The receipt should include the source of the funds (such as a car wash, fruit sales, etc.), the date, and if possible, the name of the person making the payments.
End of Year Financial Audit
Each year in August, clubs must conduct an audit of their club finances. The audit must be conducted by three people (a member, a leader, and a parent) who are not a signatory on the checking account and should not be related to the club treasurer. In performing the fiscal review, the following information should be examined – bank statements, cancelled checks, copies of bills paid, deposit slips, receipts for cash received by the club. The following steps should be followed:
- Ensure the bank statements for the club account are included with the Illinois 4-H Treasurer’s Record Book, so that they can be reviewed during the fiscal review.
- Ensure new signature cards are completed annually. The club minutes should reflect who has authority to sign checks. The club Secretary’s Record Book must be submitted along with the Illinois 4-H Treasurer’s Record Book for annual fiscal review. Ensure that a copy of the signatory card is included with the Illinois 4-H Treasurer’s Record Book information.
- Ensure all income is deposited into the account.
- Ensure all expenses are paid by check.
- Ensure that all receipts for the past year are in chronological date order in the receipt record, or are attached to an event financial sheet.
- Ensure the vendor and the amount of the check match the invoice.
- Ensure all expenses are reviewed and approved by the appropriate authorizing person (noted in club minutes and approved by the leader).
- Ensure checks have proper signatures and that signatures have been registered with the bank. Two signatures are required on all checks. Checks should not be pre-signed.
- Ensure that all bank statements have been reconciled. They should be initialed and dated by the person who reconciled the bank statement.
- Ensure the end of month book balances agree with the balances on the bank statement reconciliation.
- Review the two page Illinois 4-H Club Annual Financial Statement form along with the Illinois 4-H Treasurer’s Record Book.
- Check the following in the financial statement:
- Check income and expense balance figures
- Ensure 4-H club checking/savings account(s) numbers and EIN are included
- Check Treasurer’s signature line for signature
- Check last page of the Illinois 4-H Treasurer’s Record Book to be sure club inventory was completed.
- Ensure the figures appearing on the record of club finances agree with the financial statement.
- Review reconciled bank statements. These should also be included with the 4-H Club Annual Financial Statement form.
- The auditors must complete the 2-page Illinois 4-H Club Annual Financial Statement in the front of the Club treasurer book.
- The club treasurer book must be submitted to the local Extension office by the required date.
Sales Tax When Purchasing Items
4-H clubs are not eligible to use the University’s sales tax exemption certificate and must pay all Illinois sales tax on items purchased.
“Ownership” of 4-H Club Funds
Funds raised in the name of 4-H belong to 4-H and not an individual or group of individuals. Should a 4-H club decide to disband, the money in the treasury must be used for 4-H purposes only. Upon dissolution of the 4-H club, any assets shall be permanently distributed to the local Extension Unit, County Extension Office, County 4-H/Extension Foundation, or another recognized 4-H club with the approval of the County Extension Director.