4-H Financial Accountability

4-H Money = Public Funds

• A 4‐H Charter is the only document that officially recognizes a 4‐H Club or Group and authorizes their use of the 4‐H Name and Emblem to conduct 4‐H Youth Development programs.
• All money received by a 4‐H Club or Group is public money because 4‐H is a public organization.
• Federal regulations governing the continued use of the 4‐H Name and Emblem require annual financial reporting and accountability.
• Funds raised in the name of 4‐H must be publicly accountable and must be used for 4‐H educational purposes.
• All moneys received from 4‐H fund raising programs, except those necessary to pay reasonable expenses, must be expended to further the 4‐H educational program.
• The 4‐H treasurer is responsible to all members, volunteer leaders, 4‐H Youth Development Agents, and the public.
• Colorado State University Extension has oversight for 4‐H programmatic and financial accountability.

Accountability for Colorado 4-H Funds

• The 4‐H Name and Emblem are protected by federal law (1948: Public Law 772, protecting the 4‐H Name and Emblem, giving it a higher order of protection than a trademark or copyright). The USDA, United States Department of Agriculture, is responsible for overseeing its proper use.
• At the state level, the Director of Extension and the State 4‐H Youth Development Program Director are responsible for authorizing and monitoring the use of the 4‐H Name and Emblem, including the charter and renewal process. This includes educational programs and financial accountability.
• At the county level, the 4‐H Youth Development Agent is responsible for authorizing and monitoring the use of the 4‐H Name and Emblem. This includes both educational programs and financial accountability.
• 4‐H members and volunteers are permitted to use the 4‐H Name and Emblem if they are part of a 4‐H Club or Group that is officially chartered by CSU Extension 4‐H Youth Development. Permission to use the 4‐H Name and Emblem and 4‐H Charters may be revoked at any time.
• Each 4‐H Club and chartered Group is accountable to the CSU Extension 4‐H Youth Development Program and the Colorado 4‐H
• Foundation for its educational programs and finances. All 4‐H Clubs and Groups are accountable to federal and state government and must follow IRS rules and guidelines. The Colorado 4‐H Youth Development Policies provide the guidance to 4‐H Clubs and Groups for this compliance.
• 4‐H Clubs and Groups are nonprofit groups as provided through a General Exemption granted to the Colorado 4‐H Foundation by the IRS.
• The general exemption recognizes a group of organizations as federally tax exempt if they are affiliated with a central parent organization. This avoids the need for each organization to apply for exemption individually.
• The Group Exemption Number (GEN) has the same effect as an individual organization but the subordinates of the parent organization do not have to file reports with the IRS separately.
• The 4‐H Charter and Annual Renewal process identifies and acknowledges 4‐H Clubs and Groups as subsidiaries of the Colorado 4‐H Foundation and grants the rights and responsibilities of the nonprofit status to them.
• As a subsidiary, 4‐H Clubs and chartered Groups are exempt from paying federal income tax on funds raised on behalf of 4‐H to support youth educational programs. Donors may deduct contributions to 4‐H Clubs and Groups as applicable under the IRS codes. This includes gifts, bequests, legacies, transfers, etc.

Changes in the Colorado 4-H Youth Development Policies Financial Policies

• Since 1948, the USDA through 4‐H National Headquarters held the GEN for 4‐H. All chartered 4‐H Clubs and affiliated 4‐H organizations were considered subsidiaries.
• With the passage of the 2006 Pension Protection Act, the financial accountability for all charities and non‐profits were called into question and the rules and regulations adjusted accordingly.
• In 2010, CSU Extension 4‐H Youth Development was informed that the GEN held by the USDA through 4‐H National Headquarters would be sunsetted. Each state was required to submit a plan for providing federal tax exempt status for their own 4‐H Clubs and Groups that complied with federal and state laws.
• CSU Extension and the Colorado 4‐H Foundation determined that the Colorado 4-H Foundation would apply for a GEN to cover Colorado 4‐H Clubs and Groups.
• Changes in the Colorado 4‐H Youth Development Policies/Financial Policies have occurred to ensure:
  • Safety and accountability for volunteers, members, and 4‐H funds and assets.
  • Rules and regulations are in place to ensure the proper use of funds.
  • Programmatic and fiduciary responsibility required for the use of the 4‐H Name and Emblem are in place.
  • Compliance with current federal and state laws for nonprofit, non‐ foundation status, financial accountability and General Exemption Number and IRS reporting.
  • Prevent 4‐H Clubs and Groups from losing nonprofit status and accidently become classified as a private foundation. The burden of proving the status of a nonprofit lies with the 4‐H Club or Group.
  • If a 4‐H Club or Group loses its nonprofit status or becomes classified as a private foundation, it will no longer be covered under the General Exemption Number for Colorado 4‐H Clubs and Groups and will lose its Colorado 4‐H Charter. It will not have the protections and support of the University. The 4‐H Club or Group will not be able to use the 4‐H Name and Emblem or function as a 4‐H group.

Responsibilities for 4-H Money