Four Reasons Not to Accept Cash

One of the greatest challenges a booster organization could ever face is theft by a volunteer. Last week, I shared 5 Proven Ways to Insulate Your Booster Club from Embezzlement. In addition to these, prudent booster clubs do not accept cash. If your school system does not already prohibit you from accepting cash, institute this policy on your own.

Institute a “No Cash” Policy

Cash is the least secure method for a booster organization to conduct its financial transactions. Here are four risks that cash presents to an organization:

  1. Cash is “liquid.” Cash is accepted everywhere. Because it is not traceable, stolen cash may be spent without question.
  2. Cash increases the potential for theft. Even with the best safeguards in place, vulnerable volunteers, both adults and students, may be tempted to steal.
  3. Cash transactions may be inaccurately documented, or not documented at all. Receipts must accompany all cash transactions. If a mistake is made, it is very difficult to identify the inaccurate receipt. Additionally, a dishonest volunteer may intentionally neglect to give a receipt and keep the incoming cash.
  4. Invoices may be falsified in order to cover up a fraudulent payment of cash. Outgoing cash may be easily diverted to a dishonest volunteer by creating a false invoice to account for the transaction.

The advantages of a “no cash” policy extend beyond the risk of theft. My booster organization’s funding model requested a student payment prior to band camp each year. A parent new to the organization once claimed to have sent $75 in cash with her daughter on the opening morning of band camp. The parent claimed to have run out of checks, so she sent cash instead. This turned out to be a calculated move on her part, as she realized how hectic the first day of band camp would be for the band directors and volunteers. Because cash cannot be traced, and she claimed to have sent it on one of the busiest days of the year, she wagered that the booster executive team would assume the error was on our side. However, we stood behind our clearly stated “no cash” policy. She later sent a check for the outstanding amount.

If cash is inherent to a fundraiser, handle it securely and promptly.

Many booster organizations work concession stands and other events where cash is received from customers. In this case, be prudent with the handling and security of the cash. Designate two people to count the cash and prepare the bank deposit. Have them both sign off on the bank deposit slip. Deposit the cash into the bank as soon as possible – no later than 24 hours after the event. Here’s a best practice – if you work concessions for a game with police security, ask an officer to accompany you to the bank to make the deposit. This will help ensure your personal safety, and it will enhance transparency and speed in the cash handling process.

A “no cash” policy is a great first step in preventing theft in your booster organization, but there is much more that you can do to keep your funds secure. In my book, The Booster Leader: 35 Leadership Essentials for a Thriving Booster Organization, I have dedicated eight chapters to the finance leader. You’ll learn how to comply with the IRS, segregate financial duties, develop a comprehensive budget, and more. If you are ready to lead a thriving booster organization, check out The Booster Leader today!

Question: How do you keep your organization’s funds secure? You can leave a comment by clicking here.