FundSvcs Community

We've recently learned that our wrestling team is running their own fundraiser using an external platform, and further, that they are operating a separate "foundation" of sorts and collecting donations completely outside the colleges standard fundraising channels (we are a small private college, therefore donations to all areas of the college are handled by our advancement office). This has all come to light yesterday and we don't know to what extent this "foundation" operates, but our athletics director has been aware of it for several years and implied that he believes they have their own 501(c)(3) (they don't, we've at least verified that much).

While I've certainly encountered teams running their own fundraisers on external platforms before (without knowledge or involvement from advancement) and am aware of all the red flags and best practices this violates, this is the first time I've encountered a team with their own fundraising entity. We intend to seek legal counsel on this as well, but I wanted to reach out here to find out the legality of this, and whether there are best practices or legal implications of a team conducting their own fundraising that's not channeled through the college.

Thanks all!

Thanks, John and Joel!

Hi,

Our institution's fundraising policy requires all fundraising efforts to be approved by our Advancement department. Enforcing this policy can be challenging, but it is very important for many reasons. 

Management of the funds after the fundraiser would be a significant concern.  Any funds raised should be disbursed with the appropriate oversight, which is not the only reason that would be problematic, but a serious, ethical one. 

By outside platform do you mean something like Vertical Raise, or Giving Zone? 

When we receive money from one of these platforms, we account for the platform as the "donor" and categorize the gift type as "other", so we know it is not an actual "gift".  We do not issue any tax receipts. Sometimes we may attempt to collect the individual donor gift activity, if available, and file it for future use, but it's typically nominal amounts, and not something we're overly concerned about. 

Aside from the fact that the fundraising group is paying high fees on the funds collected, and potentially missing out on the fundraising support the Development and Advancement Services teams could offer, if the fundraising efforts are disclosed and approved, what other concerns do you have about groups using external platforms for a fundraiser? 

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Michele Whitaker
Baton Rouge Community College Foundation
[whitakerm@mybrcc.edu]
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Thanks for your thoughts, Michele. Yes, the management of the funds is of significant concern currently as we simply don't have a good sense of how that's been done. I did find that this "organization" has its own constituent record in our database and we have received checks from this entity in the past - presumably the transfer of funds from this outside platform (Snap! Raise). My concerns are less about their use of this platform, and more about 1) the management of their funds, and 2) any violations of IRS/NCAA, etc, regulations regarding the team operating an entirely separate fundraising entity/organization/foundation falsely purporting to be a nonprofit.

I'm curious if any schools that have also seen this happen have experienced direct consequences outside their own administration, like from the IRS or NCAA. While our office has been working hard over the last two years with our athletics department to establish proper protocol and processes, the relationship is strained and enforcement is lacking. Now that this situation has come to light, we're working to compile the potential real-world consequences of their activities to hopefully help them understand why they need to stop and work through us on their fundraising instead.