Finance

Funds of the club are to be used for purposes which support the stated mission of the organization. The organization may not operate for private or commercial gain and the organization’s earnings may not inure to the benefit of any person having a personal and private interest in its activities. The faculty/staff advisor has the responsibility of supervising the organization’s management of its finances and helping to see that the organization’s and university’s fiscal procedures are enforced. Financial commitments should only be made with the advisor’s approval (SL-SO-PO-06).

The organization, under its advisor’s supervision, is to implement processes and procedures which ensure monies are received and spent for authorized purposes and without irregularities. These controls include separating key financial duties among two or more officers; developing program budgets; depositing all funds into an account; avoiding cash transactions where possible; requiring co-signatures on all checks; reconciling bank/bursar statements against transaction logs; periodic reporting of finances to the leadership and membership; and auditing the organization’s financial records each time there is a change in treasurer/president.  

An organization is to maintain an accurate and complete record of all income and expenses. This should include supporting documentation for all transactions such as receipts, invoices, balance sheets and account statements. These records are subject to audit or inspection by the university at any time. Whenever there is a change in leadership or advisement of an organization, financial records need to be passed on to whomever will be responsible for maintaining the records.  

Each student organization must submit a complete and accurate record of its fundraising operations and activities at the end of each fall and spring term to the Office of Student Organizations (SL-SO-PO-06). The record shall be a complete report showing total fundraising expenditures and income for that reporting period. Organizations must submit the Profit/Loss Report to the Office of Student Organizations via MavEngage. Reports must be submitted by the organization's treasurer (or other equivalent/designated officer) and reviewed by the faculty/staff advisor.  

Should the organization disband or cease to exist, its money and assets may be donated to another non-profit/charitable organization; however, they may not be given to any individual, group of individuals or business. Organizations are encouraged to state in their constitution how residual funds are to be disbursed or file a written agreement filed with the Office of Student Organizations.

The university is not responsible for debts contracted by registered student organizations. However, organizations are expected to conduct themselves honorably in all commercial transactions (Regents’ Rule 50303, Sec. 1 & SL-G-PO-02). An organization with a past-due debt due to the university shall have a hold placed on its registered status and be suspended from activity until the Office of Student Organizations receives confirmation that the delinquent bills are paid.  

The recommended method of keeping funds is in an account with the university’s business office. While not a bank in the traditional sense, the Office of Student Accounts (bursar) offers basic services to registered student organizations free-of-charge. These include receiving deposits, issuing payments (university checks), cash withdrawals and periodic statements of account activity. The university requires that the advisor and at least one authorized officer co-sign on all withdrawals from a student organization account.

If the organization wishes to establish a commercial bank account, there are additional factors that need to be taken into consideration. The advisor must consent to the organization’s holding of funds off-campus and be willing to supervise financial activities to ensure that they are in accordance with university rules.

Commercial banks may assess service fees or usage conditions that can impact the organization’s budget or access to funds; the organization ought to consider the impact of these costs carefully before proceeding. The organization will need to have a federal tax identification number (EIN) which can be obtained through the Internal Revenue Service. Organizations are not permitted to use UTA’s tax ID. See the section on Taxes for more information.  

It is important to note that organizational funds should not be deposited in a personal or other private account nor should they be set up under the auspices of an individual’s personal tax payer ID (e.g., a social security number). Commingling organizational assets with personal or other non-organizational assets is prohibited.  

Holding fundraising events on campus can be a helpful way to defray operating expenses. These activities must be registered with the Office of Student Organizations and approved in advance. The sales must be for the benefit of the registered student organization and may not involve another entity that is not a registered student organization (SL-SO-PO-06).  

Member dues, fees, fines – Organizations may collect dues or member fees/fines in accordance with its university-approved constitution or bylaws.  

The sale of merchandise, publications, food and nonalcoholic beverages is permitted in approved campus locations.  

The sale of items obtained on consignment is also prohibited (CO-UF-PO-02). Organizations are allowed a one-day, tax-free sale each month. In consideration of this rule and also to reasonably moderate on-campus solicitation, the Office of Student Organizations normally limits the frequency of public, on-campus sales fundraising activities for each organization to once per month (Also consult the “Sales Tax at Fundraisers” section under Taxes).  

In order to accept payments via debit/credit cards, an organization must utilize a merchant account provider. Although there are multiple companies that provide these services, as with other types of financial services, student organizations must ensure that these accounts are set up using the organization’s tax ID and not under the ownership of an individual. It may be required that these accounts be linked to a bank account which can accept deposits, in which case the organization must have its own off-campus bank account. Money received via card payments should never be deposited into or comingled with a personal bank account.

Your group may wish to support a particular charitable cause outside of the group. Organizations may sell items or solicit for donations on campus for up to 14 days (whether continuous or intermittent) each academic year. In order to do so, you must pick a charity that has been granted 501(c)(3) charitable status by the Internal Revenue Service. The fundraising timing and location of the fundraising must be registered and approved in advance by the Office of Student Organizations. The name of the student organization as well as the beneficiary of the funds raised must be made visible through signage or display materials at all on-campus fundraising activities. In the case of special drives for disaster relief, the Office of Student Organizations may approve of limited fundraising activities (CO-UF-PO-02). The organization’s treasurer or responsible financial officer must keep receipts and other necessary records documenting the funds collected and donated as evidence of the fundraiser. This information should be included in the Profit/Loss Report.  

Any organization may conduct a free drawing, at which no purchase is necessary in order to win. Organizations may solicit donations at events where a drawing occurs; however, no contribution may be required of someone wanting to enter the drawing. The terms for winning drawing prizes should be predetermined, fair, impartial and made known to all persons wishing to participate.

As opposed to a drawing, a raffle involves selling a chance to win something of value. It is defined as the award of one or more prizes by chance at a single occasion among a single pool or group of persons who have paid or promised a thing of value for a ticket that represents a chance to win a prize. In order to conduct a raffle for its own benefit, an organization must qualify to do so under the Charitable Raffle Enabling Act (See info from the Texas Attorney General). Most registered student organizations would not qualify under this law to conduct raffles on their own behalf. However, organizations can sell charitable raffle tickets on behalf of an organization that is authorized to conduct such a raffle. Authorized raffles are subject to the rules on solicitation; the student organization will need to register the sale and conduct in areas designated by the Office of Student Organizations (CO-UF-PO-02) and for no more than the maximum number of 14 days allowable per year.

Organizations may, under certain conditions, receive contributions from individuals, businesses or agencies. If your organization is holding an event at which a significant amount of the funds are being donated consult with the Office of Student Organizations for procedures regarding acceptance and recognition 

Donors are to be made aware that their contribution is toward the organization and not to the university. Further, the organization must provide its own, not the university’s, tax ID number (EIN) on W-9 forms and other tax forms. Donations to the organization are usually not tax-deductible unless the organization has been granted tax-exempt status by the IRS under section 501(c)(3) of the Internal Revenue Code. The Office of Student Organizations can provide a letter explaining the registered status/standing of the organization upon request. See additional information below on Non-Profit and Tax-Exempt Status.

Registered student organizations often need to raise funds on campus. It is important that organizations realize the importance of being recognized as educational entities and the need to direct their solicitations toward charitable causes—either inside the organization, the University, or the community- at-large. A registered student organization may advertise or sell merchandise, publications, food, or nonalcoholic beverages, or request contributions for the benefit of the organization, for the benefit of another registered student, faculty, or staff organization, or for the benefit of a non-profit 501(c)(3) organization. UTA (Policy SL-SO-PO-03 & CO-UF-PO-02) has specific rules regarding solicitation on campus. If an organization contacts you to solicit on campus, please do not hesitate to contact the Office of Student Organizations.

NOTE: Student organizations may not serve as a joint sponsor with outside entities for fundraising activities. See section on Banking & Funding for more information on off-campus co-sponsorships.

While planning an activity, organizations should take care to note that the event must not:

• Disturb or interfere with the regular academic or institutional programs being conducted in campus buildings.  
• Interfere with the free and unimpeded flow of pedestrian or vehicular traffic on sidewalks, streets, and places of entrance and exit from buildings.  
• Harass, embarrass, or intimidate the person or persons being solicited.  
• The University reserves the right to regulate time, manner, and place of all solicitations. 

Traditional Fundraisers  

These events are great ways to bring in extra funds and to promote your organization. Many organizations host traditional fundraisers such as cook-out/barbeques, car washes, bake sales, requesting donations, or ticket sales for an event. The Office of Student Organizations limits the number of simultaneous sales taking place in any on-campus location.

Tax-Free Sales

Texas Tax Code §151-321  

Texas law allows a registered student organization to be relieved from state sales tax liability for one fund-raising sale per calendar month. The sales must be for the benefit of the registered organization or a non-profit organization. The items offered for sale may not be items that the organization has obtained on consignment.    

Hot/Cold Food Sales

Campus Dining Services has the primary responsibility to provide food and beverage service on the campus; however, it is understood that from time to time, registered student organizations may wish to conduct food sales as fundraising activities. Individual organizations may conduct such sales for a maximum of (10) ten days each long semester. Events involving the sale of any outside food items must be approved in advance. Outside Food Verification forms must be completed two weeks (14 days) before the event. 

Baked/Prepackaged Food Sales 

All sales must be registered with the Office of Student Organizations. Sales of shelf-stable prepackaged food items do not require an Outside Food Verification Form provided they are otherwise authorized.  

Student organizations are expected to abide by all State of Texas laws. Gambling as a form of organizational fundraising is not permitted. Types of gambling include:  

• Gaming – where the outcome is decided largely by chance. Examples include bingo, raffles, and card games including blackjack.  
• Betting or wagering - on the outcome of a future event. Examples include horse racing, Sports betting, and Internet betting. 
• Speculation - such as gambling on the stock market.  

Raffles or “Chance Drawings”  

These activities can be conducted by a student organization twice per calendar year (according to the Charitable Raffle Enabling Act, effective January 1, 1990.) The raffle tickets should have the name of the organization, the price of the ticket, contact information, and a general description of the prize (if the prize to be awarded is over $10.) The prize cannot be money. Only members of the organization can sell the tickets. Visit the Attorney General of Texas’ website for more tips and information:

https://www.oag.state.tx.us/consumer/raffle.shtml

Poker/Casino Nights  

Poker and/or Casino night events are only permitted if each participant has an equal chance to win—it cannot be a “pay per play” set up and the outcome cannot be based on the participants’ skill or performance. To conduct this type of event in keeping with state laws and University policy, your organization would need to charge a one-price admission fee to all participants. Prizes can be awarded to those that are participating; however, these prizes cannot be cash.  

If your organization is planning an event such as casino night, raffle “chance drawing,” or poker tournament, you must meet with the Office of Student Organizations.  

Student organizations that collect and keep funds should have their own federal tax ID, known as an Employer Identification Number (EIN). Government, financial institutions and others use this number to identify the organization as a distinct entity with the Internal Revenue Service. Registered student organizations cannot use the university’s tax ID for their own finances. Additionally, personal taxpayer identification numbers, such as one’s social security number, should not be used for conducting business on behalf of the organization.  

When applying online (www.irs.gov) for an EIN you will need to identify the type of legal structure pertaining to your organization. Unless the organization has been incorporated with the State of Texas (this is rare), RSOs should normally select the option “View Additional Types, Including Tax-Exempt and Governmental Organizations” and then the most appropriate of the following: Social or Savings Club, Community or Volunteer Group, Church-Controlled Organization, Political Organization, Sports Teams (community), Other Non-Profit/Tax-Exempt Organizations. It is the responsibility of the organization and its leadership to maintain up-to-date records with the government where applicable and to file the necessary annual returns.

Although registered student organizations operate not- for-profit and are exempt from federal income taxation, they are not automatically granted the same  

501(c)(3) status as the university or other charitable organizations as defined by the U.S. Internal Revenue Code. Practically speaking, this generally means that:  

• sales tax must be paid on the organization’s purchases, and  
• donations the organization receives from individuals or businesses are not tax deductible  

In order to obtain 501(c)(3) tax-exempt status an organization would need to receive its own exemption from the government. This involves some intricate legal steps and processes with both the state and federal government that are beyond the scope and needs of the typical student organization.  

Registered student organizations should normally be exempt from the requirement to pay federal income tax under the IRS rules for non-profits. However, these types of clubs are still generally required to file annual returns of their income and expenses with the IRS. Most student organizations whose annual gross receipts are ≤ $50,000 per year should qualify to file their return using an IRS Form 990-N (e-Postcard). For more information on how to file your group’s annual tax return, please visit the IRS webpage on annual reporting and filing for non-profits: https://www.irs.gov/charities-non-profits/annual-reporting-and-filing

In order to raise funds, organizations may wish to sell goods or services (such as holding a car wash, bake sale, or selling t-shirts or club merchandise); these sales are subject to state regulations concerning sales and use tax. The Texas Comptroller of Public Accounts permits organizations to hold a one-day, tax-free sale each month. The organization must have a primary purpose other than engaging in business or performing an activity designed to make a profit, and the purpose of the sale must be to raise funds for the organization. This exemption does not apply to items sold for more than $5,000, unless the item is manufactured by the organization or the item is donated to the organization and not sold back to the donor. If the organization holds more than one sale per month (off-campus), it is responsible for the collection/remittance of sales tax. More information available from the Texas Comptroller of Public Accounts.