Financial Management Overview:
Regardless of the source, all 4‐H funds must be used for 4-H Youth Development educational programs. All 4-H funds are public funds and must be publicly accountable. This includes compliance with federal and state laws as well as University, National, and Wisconsin 4-H Youth Development policies. 4-H Clubs and Groups must practice financial policies that retain their nonprofit status and prevents them from accidently falling into private foundation status.
Federal Tax Exempt Status: What does this mean?
Chartered 4-H Clubs /Groups qualify for federal tax exempt status under the Wisconsin 4-H Clubs/Groups Group Exemption Number (GEN) 5968 held by the Board Regents of the University of Wisconsin System, doing business as UW-Extension.
- This means chartered 4-H Clubs/Groups are exempt from paying federal income tax on funds raised on behalf of
4-H, or to support educational programs; and donors may deduct contributions to 4-H Clubs/Groups and affiliated 4-H organizations such as bequests, legacies, devises, transfers, or gifts as applicable under the IRS Code.
- The. IRS GEN Determination Letter outlines the accountaility, responsibilites and reporting requirements to maintain the Group Exemption Number. (4 pages, 159 KB)
- Letters of Documentation of Tax Exempt Status –.
If you need a letter that confirms a group's tax exempt status, contact Kandi O'Neil or Lori Murphy via e-mail; they will work with the UW-Extension Controller to have a letter issued.
- E-mail should include:
- 4-H Club or Group official name;
- EIN number
- Purpose for request.
- Volunteers need to contact their 4-H Youth Development Educator for this request.
- Employer Identification Number (EIN)
- This nine-digit number also known as a Federal Tax Identification Number, is assigned by the IRS to business entities.
- 4-H Clubs/Groups need an EIN number to open a bank account.
- Personal social security numbers are not allowed on 4-H accounts.
- Use IRS Form SS-4 to apply for Employer Identification Number (EIN)
Sample Form SS-4 - This form is used to obtain an Employer Identification Number (EIN) for a 4-H club or other 4-H unit. (3 pages, 343 KB)
- Sample Form SS-4 form includes specific information required; including 4-H Group Exemption Number.
- This is a fillable form. You can overwrite the instructions in the filled cells and delete the content in cells you are required to provide information.
- Mail - Internal Revenue Service, Attn: EIN Operation, Cincinnati, OH 45999
- Fax - (859)-669-5760
- More information available on the IRS Website.
Annual Reporting to the IRS – 4-H Club/Groups are exempt from Federal income tax; however, there is filing required by the IRS of tax-exempt organizations, IRS Form Series 990. The specific return filed is based on the organization’s gross receipts and assets for the last fiscal year.
- Gross receipts normally $50,000 or less, electronically file IRS Forms 990-N, known as the e-Postcard. 4-H Youth Development Staff will do the filing. Instructions for completing Form 990-N (e-Postcard). (5 pages, 720 KB)
- Gross receipts over $50,000 file Form 990 EZ or Form 990. Volunteers contact your 4-H Youth Development Staff who will assist with proper and timely filing
- November 15 is the filing deadline.
4-H money is public money and is publicly accountable. Specific rules and regulations must be followed to ensure proper use and minimal risk. 4-H funds must be used for 4-H Youth Development educational programs.
- Wisconsin 4-H Youth Development Policies provide 4-H financial guidelines.
- UW-Extension asks all 4-H Clubs/Groups to use a cash accounting method.
- Each 4-H Club/Group must annually complete the Financial Report in the 4-H Charter Renewal Packet.
- The 4-H fiscal year is July 1 through June 30.
Wisconsin 4-H Clubs and Groups may have this year’s projected expenditures and one additional year’s expenditures in their accounts OR $1,000 whichever is greater. The Excess Funds and 5-Year Plan (43 KB) Explanations document will assist 4-H Clubs and Groups in determining the ceiling for excess funds and developing a needed 5-Year Plan.
If a 4-H Club or Group is consider a major expenditure (over $500), purchasing capital equipment (an asset which has a useful life of more than one year), or accepting a capital equipment gift, the 4-H Club or Group must secure approval from the 4-H Youth Development Educators prior to the purchase or acceptance of the item. The Considering Expenditures of over $500, Capital Equipment and Gifts guide and decision tree will assist in this process.
Under certain circumstances and with UW-Extension approval, chartered 4-H Clubs and Groups may place excess 4-H funds in an approved 4-H foundation or endowment fund other than the Wisconsin 4-H Foundation. This is Option E of the financial policies of the Wisconsin 4-H Youth Development Policies . This includes all current local 4-H foundations, endowments, trusts or long term investment accounts. All new accounts must be approved before any contracts are signed or financial accounts are open. The Application for Review and Approval of Local 4-H Foundations and Endowments (20KB) starts the approval process. They are due to the 4-H Youth Development Program Director and Director of Budget and Fiscal Operations. This is PDF of the application may be useful. Application for Review and Approval of Local 4-H Foundations and Endowments (122 KB) The System for Submitting and Storage of Applications for Local Endowments, Foundations and Long Term Investment Accounts (76 KB) provides critical information for requesting the review and approval.
4-H Clubs and Groups that are paying a volunteer beyond reimbursable expenses must be aware of the legal issues that accompany this practice. See Paying Volunteers Frequently Asked Questions located with the Agreement for Personal Service template located on the Risk Management Web Page.
Appropriate Use of 4-H Name and Emblem in Regards to Livestock Sales, Auctions and Similar Events - Fact Sheet located on the National 4-H Headquarters Website. The income received and the funds paid at these events are subject to Federal tax laws and Internal Revenue Service (IRS) regulations. The following FAQ is available to assist local groups: Livestock Sales and Prize Winnings Related to 4-H Programs: Taxable Income and Charitable Contributions
State Tax Information
- State Tax Facts (2 pages, 26 KB) - Document outlines Wisconsin tax exempt status for 4-H organizations.
Sales and Use Tax
- Wisconsin Sales and Use Tax Exemption Certificate
- Wisconsin Department of
Revenue - The Wisconsin Department of Revenue web site includes
helpful information regarding sales and use tax, and application
and information for sales tax exemption certificate.
Sales Tax Exemption for Nonprofit Organizations - State
of Wisconsin, Department of Revenue - Publication 206, provides
detailed information on sales tax exemption for nonprofit
organizations (8 page publication).
Wisconsin Sales and Use Tax Certificate of Exempt Status Application
(CES), Form S-103 - To assist retailers in identifying organizations that qualify for exemption from Wisconsin sales and use tax, as provided in section 77.54(9a)(f) Wis Stats, the Department of Revenue issues the organization or governmental unit a Certificate of Exempt Status (CES) number. A CES number can be obtained by submitting a completed Application for Wisconsin Sales and Use Tax Certificate of Exempt Status Application Form S-103 and the following documentation:
- Articles of incorporation or bylaws
- Statement of receipts (income) and disbursements (expenses) for their last accounting period.
- Federal Internal Revenue Service (IRS) determination letter. Submit an email to Lori Murphy requesting this letter. Your email should include: the 4-H Club or Group official name; EIN number and purpose for the request. Please allow 10 days for processing.
- Sample Form S-103
Sales and Use Tax Information for Nonprofit Organizations - Provides information on the types of organizations that qualify for a certificate of exempt status and the application process.
Wisconsin Sales and Use Tax Information - Publication 201, provides detailed information on Wisconsin Sales and Use tax (106 page publication).
for Business Tax Registration - To obtain a seller's
permit, a nonprofit organization must complete Form BTR-101,
Application for Business Tax Registration, and mail to the
Department of Revenue. This application form may also be obtained
from any department office. Online registration is also available.
State Charitable Organization Registration and Reporting
Wisconsin Charitable Organizations Registration and Reporting
(1 page, 34 KB) - A charitable organization planning to solicit
and receive contributions in excess of $5,000 during any 12-month
calendar or the organization's fiscal year must register with
the Wisconsin Department
of Regulation and Licensing. Updated 5-2011. For 4-H Clubs and Groups, common areas are donations of equipment, land or money, bequeaths, grants, sponsorships for camps or events, corporate solicitations and donations, and Platt Book Advertising solicitation. It is better to error on the side of filing than not.
Statement - Organizations meeting the registration condition
should request a Charitable Organization Registration Statement
from the Department of Regulation & Licensing.
- Charitable Organization Annual Report - Once an organization is registered with the state, it must
prepare annual reports, using forms prescribed by the Department
of Regulation & Licensing. The annual report (Form 308) must
be submitted within six months after the close of each 12-month
calendar or fiscal year.
Fund Raising and Donations
- FundRaising: Private Support for the 4-H Program (1 page, 76 KB) - National 4-H Headquarters Fact Sheet providing an overview of critical elements of the Code of Federal Regulations and USDA Guidelines that pertain to 4-H fund raising.
- Fund Raising (2 pages, 36 KB) - Covers key points of the purpose
of fund raising, guidelines for fund raising and special considerations
in conducing raffles and using the 4-H name and emblem in fund
- Acknowledging Charitable Donations (2 pages, 48 KB) - Document outlines recommended procedures for acknowledging cash and non cash donations.
Additional Information, resources and tools on 4-H Charters and financial accountability are located at 4-H Name & Emblem Web Page and at Money Matters on 4-H Community Club Central. Volunteers should direct all questions to the 4-H Youth Development Educator in their county.