GUIDELINES FOR LWVEF

STATE AND LOCAL GRANT SERVICE


2002-2003 Edition

League of Women Voters Education Fund

 

CONTENTS


Introduction

Using the Education Fund

Helpful Hints

General Instructions

Final Checklist

 

INTRODUCTION

 


THIS PUBLICATION DESCRIBES HOW THE GRANT SERVICE WORKS AND LISTS THE STEPS YOU MUST FOLLOW IN USING IT.


”Why does the League of Women Voters have a State and Local Grant Service?”

Short Answer: So that state and local Leagues can solicit tax-deductible donations.

Long Answer: All state and local Leagues are classified by the IRS as 501© (4) nonprofit organizations. As such, donations to them are not tax-deductible.

Your donors must make their checks payable to the “League of Women Voters Education Fund”

 

The League of Women Voters Education Fund (LWVEF) was established in 1957 as a separate, tax-exempt organization with a 501© (3) status. Organizations with 501 © (3) status are allowed to solicit contributions that are tax deductible as charitable donations. Oftentimes, state and local Leagues may wish to solicit tax-deductible donations for educational funds to their own to accept such gifts. By allowing the LWVEF to act as their agent or “sponsor” in the fundraising process, Leagues can solicit tax-exempt donations. The way this works is simple: Leagues solicit donations, donors write out checks to the LWVEF, the LWVEF deposits the funds, and finally, the LWVEF cuts checks to the state and/or local Leagues.

There are, of course, rules and conditions that go along with the process, as well as steps that must be meticulously followed.

It is important to abide by these rules. Otherwise, the LWVEF risks losing its 501© (3) status.

Using the Education Fund

In order to use the grant service for your funding, your project must meet IRS and League criteria.

The IRS criteria are:

1. The project must be educational. The project must be completed for the purpose of informing the public in a fair and objective manner. Through the project, your League cannot advocate a particular position on legislation or urge any action to affect legislation (federal, state or local). The project cannot involve the development of a League position by consensus or other form of agreement nor can it promote a League position. The project cannot involve work with political parties or candidates for office, other than nonpartisan voters service activities. It cannot influence the outcome of an election.

2. The project must serve the general public, not League members exclusively.

3. The project cannot be at all related to League membership activities. The project’s resource cannot be used to support the membership recruitment or membership maintenance activities of your League. Education Fund resources cannot be used to promote League membership. Thus, internal membership materials would not qualify for funding under this service.

The League criteria are:

1. New projects cannot be started before the approval application is submitted and approved. LWVEF trustees must ensure that it will meet IRS and LWV criteria.

2. The project must not give direct grants to outside organizations.

3. The project must be nonpartisan.

4. If you project generates income, the income must be used for educational purposes only.

5. The LWVEF must be properly credited.


The trustees reserve the right to review materials and require changes. If the project differs from the concept submitted on the initial project approval request form, or if the project does not meet the above criteria, funds cannot be disbursed.


Step By Step

 

The following list describes each step in the process of using your LWVEF Grant Service account. This is followed by a Helpful Hints section.

STEP 1. Select a project and develop a budget.

STEP 2. When you get donations, submit funds with the deposit form. Make sure you indicate on the deposit form how you want the funds you are depositing distributed. There are different lines to designate where the funds should go. The LWVEF will send acknowledgement of all deposits received.

STEP 3. When you are ready to spend your funds, mail (or fax) the withdrawal form. NO funds can be distributed without the withdrawal form.

STEP 4. Within two months of the project’s completion, submit the final report, along with any results of your project that can be mailed (i.e., pamphlets, press clippings, videotapes, etc.).

 

Keep your own records of Grant Service transactions. Your League treasurer should keep a permanent record of all deposits and withdrawals form your Grant Service account so they can be reconciled with the LWVEF records. The names and addresses of donors should also be a part of your records.

Retain documentation on all project expenses for seven years. You are legally required to keep an accounting (including receipts) of all project expenses.

 

 


Helpful Hints


Project Development

“I’d like to do a project, but I cannot think of anything to do!”

Here are some examples of educational projects your League can do:

• Voters service and /or citizen information projects (forums, debates)
• Publications (listings of elected officials, balanced information on issues)
• Educational public meetings (seminars, conferences, forums or workshops)
• Media programs that discuss issues in an unbiased way (radio, TV, slide presentations)
• Purchase and distribution of educational League publications
• Public interest lawsuits, monitoring the implementation of laws


Budget Development

Once you have selected your project, you can begin to estimate expenses and develop a budget. Your budget should include the following components:

• Direct Costs
Direct costs are expenses specifically for the project. Examples of direct costs are printing, editing, layout, postage, supplies, distribution, promotion, phone charges, out-of-pocket expenses of volunteers and salaries.

• Indirect or Overhead Costs
These costs are general operating expenses incurred when completing a project, such as office rent, equipment use and utilities. A portion of these expenses can be attributed to the project based on use. However, to prove this, records must be maintained that show the project used these services or items.

• Office Expenses
Your League can charge a portion of office or telephone expenses associated with your yearly ongoing citizen information service or other ongoing Ed. Fund projects. These costs should be documented through financial records and logs. The proportion of League time and funds spent on this educational activity needs to be tracked and recorded to ensure the percentage of office expenses charged to the Ed. Fund is proportional to the project Vis-à-vis all League activity. For example, if 20% of your League’s time and resources go to conducting the citizen information service—then 20% of the cost of phones, rent and office expense can be paid for out of Ed. Fund monies.


• In-Kind Contributions
In-kind contributions such as equipment, materials or services cannot be considered as tax-deductible contributions to the LWVEF for state and local Leagues. A business that wants to make such a gift might instead consult an accountant or attorney to investigate classifying the gift as a deductible business expense.


Frequently Asked Questions

“Can I buy a computer with the money I raise?”

Equipment such as computers may be purchased with Education Fund dollars provided that the equipment will be used for education projects only. Under certain legal restrictions, a League (the 501© (4) entity) may pay to share the equipment. (Call the Grant Administrator prior to selecting this option.)

“Can we use our Grant Service account to pay our Per-member-Payment (PMP)?”

Funds already deposited in your Grant Service account can be used to meet PMP obligations. Leagues may also raise new, unrestricted tax-deductible contributions to satisfy up to 50 percent of their PMP obligation. (Refer to the President’s Packet for details.)

“What about when I combine an educational project with a membership project, such as inserting something into a League newsletter?”

In your League procedures educational issue inserts for your newsletter, you may pay for only the insert pages with Grant Service funds. Additionally the material must be distributed to the public to meet the diversity criterion. Therefore, that distribution cost also should be included in your budget.

Project Approval

“What if we do not have time to wait for approval?”
In an emergency, you may request and receive approval over the phone. Call the State and Local Grant Administrator at 202-429-1965. Make sure you follow up with a written request. No funds will be disbursed without a written request. The LWVEF reserves the right to reject a follow-up written request that differs from the original phone description.


“If we do the same project every spring, do we have to submit a new project approval form each year?”

No. Only if the project changes in a significant way – for example – you used to use the funds to print “They Represent You” and now you’re deciding to put that on your website rather then print hard copies. On every request for withdrawal for ongoing projects – we require that you submit a short description of the project (see the approval form). We use this to continue to monitor and make sure the project still meets 501© (3) requirements.

 

Project Fund Deposit

• Allow a minimum of three weeks for processing of your request.
• Do not exceed your LWVEF Grant Service balance.
• Do not exceed your approved project budget by more than the established percentage as indicated in the deviation chart below.

Sometimes, project budgets will exceed original projections. If this happens, the LWVEF Grant Service allows you to spend additional funds without completing more paperwork. However, there are established limits (see chart below) on how much the project can exceed the approved budget before you must seek approval.

 

Budget Deviation Chart for Project ReApproval
Approved Project Budget ($) Accepted Total Deviation from the Approved Budget
1-1,000 25%
1,001-3,000 20%
3,000-5,000 15%
5,000+ 10%

 


General Instructions

 

Donation Follow-Up

Always thank donors for their contributions. It is important that you thank donors as it will continue to keep you in a good relationship with them. (The LWVEF will acknowledge donations that are over $250 in accordance with IRS regulations) but a donor can never be thanked too many times. Keep track of the names and addresses of all donors.


Additional Record Keeping Tips

• Keep records of Grant Service transactions for reconciliation with LWVEF records.
• Retain documentation on all project expenses. Under the law, you must keep accounting (including receipts) of all project expenses for seven years.
• Keep accounts balanced.
• Leagues will receive an annual statement of Grant Service account activity.


Credits

The LWVEF must be credited on project material. Publications for community distribution, including programs for meetings or seminars, must credit the LWVEF. Donors may be credited on publications as well, but check with them first. Some donors prefer to remain anonymous.

Examples of wording for credits on project materials:

“Prepared by the League of Women Voters of (name of your League),
published by the League of Women Voters Education Fund, and financed by contributions from (name of donors).”

“This seminar conducted by the League of Women Voters of (name of your League) and has been made possible by a contribution from (name of donors) to the League of Women Voters Education Fund.”

“Published by the League of Women Voters of (name of your League) and funded by contributions to the League of Women Voters of (name of your League) and the League of Women Voters Education Fund.”


FINAL CHECKLIST

 

Make sure your planned project is educational in nature; no advocacy or membership activities allowed.

Complete a mail (or fax) the project approval form.

Make sure checks are made out to the “League of Women Voters Education Fund”.

Submit funds with the deposit form. Please be sure you local League number is on the form to ensure proper credit to your account.

Request withdrawals by mailing (or faxing) the withdrawal form. Please be sure your local League number is filled out on the form to ensure proper debit from you account.

Submit the final report form.