Riverside-Brookfield High School District 208 Interim Superintendent David Bonnette is telling fundraising groups associated with the school that they need to establish a legal identity separate from it.
Groups such as the RB’s Booster Club, the Patrons’ Council, the Music Sponsors and the Art Patrons have in the past often operated without bylaws, state incorporation as non-profits and without a separate tax identification number issued by the Internal Revenue Service necessary to qualify as a tax exempt organization.
Without this IRS tax identification number donations to the groups may not be tax deductible.
Until now many of these groups at RB have used the school’s tax identification number.
“It really is improper for them to use the school district’s tax ID number,” Bonnette said, acknowledging that has been the practice at RB.
Although these groups exist to support the school and its activities, they are separate organizations and are they are not controlled by the school board. As such, they need separate legal status, Bonnette said.
“It is the correct way for them to maintain their independence as a separate entity,” Bonnette said. “The school board has no control over what they do to raise money and/or how they spend it, and that puts them in an independent category.”
Bonnette is also telling these groups that they should have their own insurance if they conduct fundraising events off school property.
Because of this new policy, the Patrons’ Council, which functions much like a PTA, has had to cancel a planned March fundraiser that was to be held at the Brookfield Zoo, since the Patrons’ Council does not yet have its own tax identification number or insurance for its board.
“We had everything planned out,” said Alice Glavin, Patrons’ Council co-president. “It was kind of sad. We have to also get insurance for the whole board, and that way, when we have things off school property, we’ll be protected.”
Glavin says that the Patrons’ Council hopes to have a smaller fundraiser at RB in April. Last year the Patrons’ Council raised close to $17,000 at its fundraiser held at the zoo.
Glavin said that the Patrons’ Council board never realized that it needed a separate tax identification number or insurance until some members began bringing up the topic at meetings in the past year.
“Usually when we used the school’s tax ID number in the past all the money we’ve raised has gone right back into the school program,” Glavin said. “We’ve never raised more than $20,000, and it goes right back. We’ve never thought we needed [the tax ID number], but I guess we do.”
Money raised by the Patrons’ Council typically has been used to fund college scholarships for RB graduates and grants and gifts for teachers and staff, Glavin said.
The process to incorporate as an Illinois not-for-profit corporation and as a tax exempt 501(c)(3) corporation is neither cheap nor easy and sometimes requires the assistance of a lawyer and an accountant.
It costs $850 just to get a tax identification number from the IRS. Annual tax returns must be filed even thought the organizations pay no taxes.
“When all is said and done it’s going to cost us $1,500 to $2,000, and that’s money right out of the kids,” said RB Booster Club President Gary Zeleny.
At a recent Booster Club meeting, Zeleny described the entire process as “long and arduous.”
Bonnette said that he is aware that the process can be burden on smaller groups such as the music sponsors or the arts patrons and said that he is looking at ways to make things easier.
“They’re several possibilities there,” Bonnette said. “They could umbrella. We don’t want to them to have to unnecessarily expend money to be separate, but there does legally need to be a separation between their authority and the authority of the school district.”
