Q. Dear Ray,
Our chapter has recently received donations for utilization as scholarships to offset the expenses of OA Trail Crew, attendance at conclaves, assemblies, and other OA events for those who are unable afford the costs and to enhance the chapter ceremonies supplies. We would like to be able to properly account for these funds and be able to issue appropriate documentation to the donors, for their use in filing their taxes. What options do we have as a chapter? Can we, as a chapter, establish appropriate by-laws to account for and oversee the distribution of these funds, to include maintaining a checking account to properly secure and safeguard the funds?
Yours In Scouting,
Joe
A. Dear Joe,
I am delighted to hear that your chapter is helping needy Arrowmen attend OA High Adventure programs and other events. Your concern about proper handling of donated funds is commendable, as is your desire to provide appropriate documentation to donors.
A fair amount of guidance on this topic can be found in the Order of the Arrow's Lodge Finance Manual. Page 6 of this publication provides this important information regarding chapter finances:
CHAPTER FINANCES
If the lodge has chapters, the chapters are integral components of the lodge and as such, their finances are a component of the lodge’s finances. If separate chapter accounts are desired, they must be established as sub-accounts of the lodge account. This can be arranged with the council accounting specialist.
Another important passage, which is relevant to your question, appears on page 3 of the Manual:
THE LOCAL COUNCIL ACCOUNTING SYSTEM
All Order of the Arrow funds will be accounted for in the local BSA council “2371 Custodian Account – Order of the Arrow”. The following quotation is reprinted from page 3-5 of the BSA Local Council Accounting Manual, chapter 3, volume 2:
“2371 Custodian Account – Order of the Arrow
This account records funds held on behalf of the Order of the Arrow. It is established BSA policy that the local council act as the banker for its Order of the Arrow lodge.
It is against BSA policy for the Order of the Arrow lodge to have its own bank account. The local council should not maintain the books of the Order of the Arrow lodge.
Credits to this account will represent receipts from the Cash Receipts Journal representing payment of Order of the Arrow dues, fees for Ordeals, etc. Debits to the account will represent disbursements from the Accounts Payable Journal for invoices approved by the Order of the Arrow lodge for payment.
Supplies purchased by the Order of the Arrow are the property of the lodge and should not be included by the council in Account 1401, Inventory – Supplies for Sale – Council Service Center.
Any other accounts for various chapters of the Order of the Arrow, if in use, are to be maintained by the Order of the Arrow lodge itself.”
In short, our lodges and chapters may not open bank accounts in order to receive and disburse funds. The council is our banker. Also, only the council may issue receipts for donated funds, as it is the charitable entity receiving donations. Of course, you may send a letter of thanks to donors and, perhaps, enclose the council's charitable receipt. Solicitations of donations should always be done with the council's knowledge and approval, and your chapter and lodge staff advisers should be able to ensure that your good works do not conflict with the council's important efforts.
Good luck with your commendable work to make the programs of the Order available to all Arrowmen in your chapter, and thank you for your question!
In service,
Ray