New Team - Storing Sponsor Funds

Hello VEX Forum,

    As a new team this year, we are encountering some issues with how to deal with storing funds from our sponsors and would greatly appreciate it if anyone could suggest/provide some solutions. (I don't know if location will matter in the answer to this question, but we are a high school team based in Houston, TX)

Although we definitely have sponsors who can buy parts for us from the VEX website, we don’t know where to put the funds of those who would rather give us money. We’ve already looked at the following two options but feel that they will not meet our requirements, and were wondering if there are any other ways we can store funds or if there are some new deeper details (about these 2 options) that we don’t know of yet.

Banks like Chase typically require someone’s signature to retrieve money, but no teacher or school administrator is allowed to have any money stored under their name (indirectly or otherwise). Having a student sign isn’t good either, because they will eventually graduate and future students will have to create new accounts in order to continue storing funds, not to mention the hassle of transferring existing funds.

Online companies like Paypal, Venmo, and Square typically require some sort of identification to prevent fraud like your SSN (Social security #) or a credit card, which also links the account to a person. We aren’t completely sure of whether or not any systems are flexible enough to where one person (student/teacher) can just “start” the account under their name as a label and the team (and future generations) can just retrieve funds using a login because we haven’t looked too deeply into these companies. Other than that, these online companies still feel kind of limited from their details & descriptions.

Again, we feel that these two options aren’t flexible enough to suit our needs, and were wondering if there are any other ways we can store funds or if there are some new deeper details (about either of these 2 options) that we don’t know of yet and would greatly appreciate it if anyone could suggest a new option or bring up any knowledge they know about these existing options.

     Thanks in advance!

If none of the options that you listed are suitable, you can have your sponsors buy the parts for you!
This is what 523 did this year, as I’m a minor and I haven’t had the time to register 523 as a Non-Profit org.
You can put together a budget of everything you may need for the year, and then send it off to your sponsors!

Upon second inspection, I noticed that you said that they’d rather donate money.
To which I’d respond, either form a Non-Profit org, and then have the funds located in an account for that, however incorporation costs money, and you still have to pay some taxes, which may seem like a lot.
Unlike with traditional businesses, which can choose which ever state they’d like to incorporate in, you must incorporate in your home state. (Which means Delaware, which is generally used for incorporation of larger entities is off limits, unless you’re actually from there)
While I can’t speak for Texas, It costs ~400 to get a Non-Profit set up in California, additionally, you’d need a bookkeeper, so you can make sure you don’t fudge any of your numbers, which would cause a seizure of your funds.

If you want info on incorporation in texas, check this out:

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We work with our local PTO which is a not-for-profit organization. Donors will then get the tax incentive and you can get additional help in your fund raising event.

Fifa 16 coins are a good suggestion for storing cash, but possibly not the most efficient both time-wise and in terms of getting out the same amount of money you put in.

You can’t be the only school club that needs to use a bank account. You can probably ask your school and find out how other similar clubs get around this problem.

However, it’s definitely an advantage to keep the club separate from the school if possible, so that the school can’t unilaterally make decisions about the club’s assets and so on (particularly if you have recieved sponsorship from local organisations and companies).

Make sure you look into the rules before you decide to set up your club as a non profit organisation, because depending on the jurisdiction you might be required to let the authorities audit you if they decide they want to. If that happens then you will probably get in trouble. Even if you have kept track of where all the money came from and went, which is difficult enough, you probably won’t have followed all the arcane rules that accountants made up to give themselves job security. It’s better just to avoid the possibility of being audited.

If you can’t get a bank account then maybe you can just use a safe? That’s what businesses have to do when they can’t use bank accounts (for example some marijuana dispensaries in the US). But don’t use a safe that somebody could pick up and walk off with, make sure it’s very securely attached to the floor.

This might be your best bet if you’re in a hurry. As people have already pointed out, setting up a non-profit has up-front costs and paperwork, but if you can get your local PTA to “launder” the cash for you, they can deal with all of the paperwork and your donors can get their tax write-off. Some employers will provide matching funds, so if parents are donating, maybe check on that. Also, some companies have a policy of not donating to government organizations (which includes schools) but they will still give to a PTA. Just make sure your PTA is reputable and happy to earmark the funds specifically for your activity.

Is this a libertarian thing? Or is there some kind of legal reason?

How about your PTA or like group in your school. Have checks written to them earmarked for the Robotic club. They already have a account and budget system. Now I read the rest of the post. This was mentioned so I second that idea.

I don’t know. Maybe when they give directly to government organizations, they don’t get the same tax credit. ???

I would hope you could get a sub-account from the school district if you are affiliated with the school. That way you can have restricted donations funnel to robotics that can only be used for robotics.

Does your school district have an educational foundation? You can try and see if that works in yous school district. In PA, this can save on some local taxes even more than a normal non-profit contribution. I am not sure how prevalent these are in other states or if your district already has one of these Educational Improvement Organizations you could work with for getting corporate funds with a bigger write off than a normal 501c3.

But the district needs to be working with you to do this. You will need to work with the accounting and administration for making sure you have the proper funds for robotics.

So that leads to option number two. You can go solo like we did and formed our own non-profit. Incorporation and then 501c3 status takes a while and a lot of paperwork and some expense. We then got designated as a “group C” in our local district for preferential billing rates for facilities use.

Many banks also waive a ton of fees for 501c3 organizations. So you may end up paying fees for the first few months until that comes through. We use TD Bank but I don’t think they have branches in Texas.