What Every Music Booster Group Should Know About Tracking Money

Today's guest post is by Courtney Beard of Vivace Productions.

Accountant

 

Be it band boosters, the gridiron club, or prom committees, some of America's most enduring small businesses have been the informal groups dedicated to supporting the activities of student programs in our schools.

Yet despite the significant amount of money they handle, many of these organizations do identify themselves as businesses and do not operate as such. Several programs struggle for this reason. Oftentimes only the most organized make the effort to incorporate themselves as a 501c3 or keep financial records in a computer based system. Unfortunately, we still hear how some keep their funds in a tin lockbox under the teacher's desks and track income by tally papers and then are faced with unanticipated expenses.

The idea of keeping real financial records may intimidate some booster organizations, but you do not need a CPA within your ranks to implement of simple bookkeeping and reporting procedures, paving the way for greater efficiently and responsible decision making.

Here's a story about The Hometown High School Marching Band and how a single, SIMPLE, financial report helped to keep them on the right track.

The HHSMB is a small group who has long had a rotating group of dedicated parents who every year make arrangement with fundraising companies and then prod the students to go door to door and sell their Florida Oranges. There is also money from the school but they don't really bother to keep track of that because the director uses it to buy the music and hires consultants to assist with the program. The parents keep the fundraised money in a safe in the back of the music closet and use it to bring hot chocolate to the games and pay for the bus and truck to bring the band and their instruments to the 3 local competitions they do every year. Any money left over is used to throw a banquet.

Unfortunately this year it looks like the banquet will be called off because the sousaphone finally fell apart after 5 years of being held together with duct tape and the bari-sax player needs to learn a tenor part because he left his instrument out in the rain and all the pads need to be replaced. The seniors are devastated at the loss of the banquet tradition.

Worse yet, the principal just announced that the school needs to cut back its funding to the band because the state has been reducing the funding to the school. The director had been hoping to replace the 12-year-old uniforms but now it seems they need to last another 15 years before they can be replaced.

Luckily the Hometown Marching Band's new treasurer used to work for a small business and she outlines a plan for the band to be better prepared for expenses.

First she takes all of the expenses of the band and organizes them into categories:

  • Travel
  • Competition Fees
  • Music
  • Staff
  • Game Day Food
  • Banquet
  • Repairs

Next she identifies the bands' money sources:

  • Money from School Fund
  • Cash from Fundraising

She creates a report reflecting where their money has come from and gone to over the past year:

   Hometown Marching Band
School Funding     $12,000.00
Fundraising
Oranges Sale $23,000.00
(Cost of Oranges Sale) $(19,000.00)
Car Washes $3,000.00
(Cost of Car Washes) $(50.00)
Candy Sale $8,000.00
(Cost of Candy Sale) $(4,000.00)
Fundraising Total  $10,950.00 
 Total Cash Available    $22,950.00

 

Expenditures
Bus and Truck $3,000.00
Festival Fees $300.00
Music & Drill $3,000.00
Staff $5,000.00
Game Day Food $1,000.00
Banquet $ —
Repairs $600.00
New Instrument Purchases $8,000.00
Total Expenditures $20,900.00

 

After a quick look she sees that even after he helped with the cost of the new instruments, the band director has not used all of his allocated funds from the school yet.There IS money for a banquet!

She could right away begin planing on a $2,000 banquet, but she pauses. Instead of just reflecting on the past year, she decides to think ahead to next year. She knows they could again be faced with a situation where they need money to cover replacements and other major expenses; if not next year, some time in the future. She goes back to her list of expenses and creates a new category, "Replacements and Future Repairs." She splits the leftover money between that account and the banquet. So now, at the end of the year, the report looks like this:

   Hometown Marching Band
School Funding     $12,000.00
Fundraising
Oranges Sale $23,000.00
(Cost of Oranges Sale) $(19,000.00)
Car Washes $3,000.00
(Cost of Car Washes) $(50.00)
Candy Sale $8,000.00
(Cost of Candy Sale) $(4,000.00)
Fundraising Total  $10,950.00 
 Total Cash Available    $22,950.00

 

Expenditures
Bus and Truck $3,000.00
Festival Fees $300.00
Music & Drill $3,000.00
Staff $5,000.00
Game Day Food $1,000.00
Banquet $1,025.00
Repairs $600.00
New Instrument Purchases $8,000.00
 Replacements & Repairs $1,025.00
Total Expenditures $22,950.00

 

When the year starts over again, most of the categories will zero out because no money has been raised or spent yet. But that $1,025 will still be there as a new line "Cash from previous year." She will use this report to plan the organization's budget, keeping that cash from the previous year available in the future replacements and repairs category for when the marimba player drops the entire bag of yarn mallets into the mud. Even better, they could continue to add to the account and shorten the time they need to wait before they can afford to replace the uniforms.

She shows the other band boosters what she did and they agree to write into the bylaws that such a report should be made every month so they can see if they are on track.

They continue to analyze trends over time and begin to be able budget closer to what exact costs end up looking like. And when the time comes to decide what fundraisers to do, they decide to drop the oranges in favor of something new (cookies this year, promising a 35% return!) and double down on the effort they give the car wash.

In a few years they've become really efficient with their fundraising and allocating of funds, so they decide to try something big: a trip to participate in a parade at Disney. They add a line on the top half "Student Dues Paid In" and a line on the bottom half "Disney Trip Cost". Unfortunately there are a few kids whose families can't afford the dues, so a new line is added to the bottom ("Trip Scholarships") with an agreed amount set aside. They take a little out of the game day and banquets budgets in order for it to balance out.

Just by putting all of the organization's money and expenses on one sheet of paper, a band (or a team or a committee) can greatly improve their ability to not only operate efficiently now, but also be prepared for the long term. $20,000 worth of uniforms is a lot less expensive if they are paid for over the course of 20 years!

The other thing an organization can do to help secure itself is to become incorporated as a not-for-profit organization. In many states it is not terribly difficult for an educational program with a board to become a non-profit organization.

Not only does this mean you save on taxes on all that hot chocolate you buy every October, but it means it is easier to have options when it comes to financing big ticket items, such as leasing instruments or the various costs associated with big trips.

Running a whole program can be a lot of work, which is why coaches and directors turn to parents to help support the program. But don't think you need to be a lawyer or an accountant to keep the group on the right track! A little organization goes a long way.

So next time the treasurer position is open on the Booster Board don't hesitate to raise your hand and fill the void; it's not hard to do a good job and provide excellent support for some deserving students!

Courtney Beard sep2010Courtney Beard has been working on the administrative and organizational side of band programs since 2005. She is currently the Program Coordinator for Vivace Productions and is completing her MBA.

2 thoughts on “What Every Music Booster Group Should Know About Tracking Money

  1. Do you know what tax returns must be filed if the bank booster program is very small and is not a 501(c)3? I am just coming into a program that was very ill managed and trying to clean things up. I want to be sure things are being done right and, most importantly, legal. Thanks for any help you can give to a new treasurer coming in to a mess.

    1. Hi Misti,

      Thanks for your question. Can you tell me what State you are located in? The Department of Revenue in your State likely has a section on their website regarding taxes. It would also be good to review/do a search in your State to see how your business (booster organization) shows up in the register. That will help shape the answer to what filings you need to be doing annually. I am happy to assist if you provide me some additional info. Please send an email to info@amparents.org and I will gladly assist.

      Best,

      Scott

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