Student Organization Funding
Funding Information for Student Organizations
This website provides pertinent information, forms, and deadlines to all student organizations. Many of your questions will be answered by the information provided on this site; however if it does not please feel free to email or call our office. The below tips and recommendations should not replace the advice from a Certified Public Accountant, or other financial advisor.
Organization Funding Types
Senate: The Student Government Association allocates a portion of Student Service Fees received from the university specifically for student organizations. These funds are to be utilized for non-academic programs and services for the students in the organization.
There are strict rules and policies regarding how the senate money can be utilized. These rules can be found in the SGA Funding Regulations Handbook.
Purchasing with Senate funds is handled through the Purchase Request system in HSC Net. Purchase Orders (PO's) and Purchasing Credit Card (Pcard) are the methods of payment. Pcard Process with Senate Funds
Agency: Student organization agency accounts have been moved off campus. We have included below information on how to get a EIN (Employer Identification Number), opening a bank account, and more to help with the process of creating an off-campus account.
Opening a Bank Account
When trying to open an off-campus bank account, the bank will request your organization's tax ID number (a.k.a. Employer Identification Number). If the organization is tax-exempt, then give the bank your tax-exemption number.
Steps for opening an outside bank account.
- Apply for an Employer Identification Number, or EIN, for your organization through the IRS.
- At the bank of your choice, using your nine-digit EIN, open a business account in
your student organization's name.
- Make sure to setup the bank account under the organization name on file at TTUHSC. NOTE: The name cannot include "Texas Tech University Health Sciences Center", "TTUHSC" or "Texas Tech".
- You may need a letter from the Office of Student Life confirming your status as a registered student organization. If so, please contact our office for that letter.
- For the physical address, we recommend using your Advisor's HSC Mail Stop to ensure delivery of important communications from the bank.
- For the e-mail address, we recommend using a non-TTUHSC email for the organization. Please ensure to maintain proper access for officers and advisors from year to year.
EIN FAQ
An EIN, also known as an Employer Identification Number, is a number used to identify a business or other organization.
No, registered student organizations cannot use TTUHSC's EIN.
The EIN can be used to open a bank account, file a tax return (electronically), and to make any payments to the IRS. It can also be used when filling out a W-9 form when hosting giveback nights.
To apply for an EIN, please visit the IRS online EIN application. At the bottom of the page, click on Apply Online Now to get the application process started.
- Make sure to use the exact name your organization has on your agency account.
- TTUHSC or Texas Tech University Health Sciences Center cannot be included in the name of your organization.
- Your organization will need to have one officer use their personal information to setup the EIN. The IRS calls this person a Responsible Party: https://www.irs.gov/businesses/small-businesses-self-employed/responsible-parties-and-nominees
- Our office recommends having a student officer of the organization submit the EIN application.
- The organization's advisor can be a backup for submitting the EIN application.
- There is an option for changing the Responsible Party as changes to organization leadership occur. A Form 8822-B, Change of Address or Responsible Party can be submitted to the IRS in order to make a change to the Responsible Party for an EIN.
No, the Responsible Party's personal information, including personal taxes, will not be impacted by the activities of the organization.
The EIN is not the same as the tax exempt number. Tax-exempt status is a different process handled with the IRS.
If your organization previously applied for an EIN, and do not know what it is, you can contact the IRS at 1-800-829-4933 to locate your EIN. You will need information from the Responsible Party who setup the EIN. Organizations should not apply for an EIN if the organization previously had one.
Things to consider
Texas Tech University Health Sciences Center and the Office of Student Life will no longer regulate student organization bank accounts (Agency Funds) after March 1st, 2021. Therefore it will be important to provide some internal financial controls to prevent fraud.
- Require two signatures in internal operations for checks, purchases, or other expenses.
- Debit cards are discouraged.
- If used, ask your student organization advisor to maintain the card and only use for purchases that cannot be made with a check.
- Separate financial responsibilities, where it requires more than one person to complete
a task. A reconciler, is a person who checks bank statements, and should not be able
to sign off on student organization purchases. This should be done each month.
- The person who takes custody of the money in every circumstance, should not reconcile or make purchases (without a second approval).
- It is suggested that two officers, and/or an advisor approve purchases that require reimbursement for other student organization members.
- Use your student organization advisor's mailstop as an address to mail all bank statements if approved by advisor. This ensures that bank statements will not be sent to individuals and lost during any transition process.
- Use your student organization's bank account instead of your personal bank account. Any
organization can open a bank account, and student organizations wishing to open a
bank account will need to obtain an EIN from the Internal Revenue Service.
Also could prevent fraud, as the bank statements go to the correct location.
It is recommended that there are 2-3 signers on a checking account to ensure one officer is not the only one who has access. - Update your bank account information yearly. Officer transitions will require most
student organizations to update their bank accounts on a yearly basis.
- Remove officers no longer in the organization, and add officers who take new leadership positions in the student organization. If the officers have signature privileges, the new officers and the advisor will need to update the signature cards soon after the transition.
- Student Organizations are responsible to apply for tax exempt status if desired. Organizations are required to pay sales taxes on purchases that are made with an off-campus bank account and cannot use the TTUHSC tax exempt number.
- Keep good financial records. Financial records should go back five years. You can keep track of your financial records in HSC Net if you like by uploading bank statements into the Documents section.
Taxes
No, TTUHSC's exemption status does not extend to student organizations. Student organization registration does not imply tax exemption. Only university departments and offices may use TTUHSC's tax ID number.
Student organizations do not fit neatly into IRS categories for non-profit and tax exempt status.
- National social fraternity and sororities are tax exempt under their parent organization as defined in I.R.S. code 501(c) and should contact their national office for information on how to use their tax-exempt number.
- Some other organizations who are nationally affiliated may be tax-exempt. Contact the national office to determine your group's status.
- Groups not affiliated with a national organization are probably not tax-exempt unless they have applied directly to the I.R.S. for this status.
It is understood that an organization that have less than $5,000 in gross receipts a year, will be considered tax exempt, as long as they meet the 501(c) requirements.
If the organization has over $5,000 in gross receipts a year, and it is operated exclusively for tax exempt purposes then the organization needs to file form 1023 with the IRS.
In order to qualify for the 501 (c)(3) status, organizations must fulfill the following requirements:
- An organization must not "benefit the private interests, such as the creator or the creator's family, shareholders of the organization, other designated individuals, or persons controlled directly or indirectly by such private interests."
- What does this mean? No net earnings from the organization can benefit a member who
has an "invested" interest in the organization.
"It may not attempt to influence legislation as a substantial part of its activities and it may not participate in any campaign activity for or against political candidates."
An organization wishing to apply for tax-exempt status must realize it is a complex and cumbersome process. An attorney specializing in this area is probably necessary because the laws and procedures written for qualifying as a tax-exempt organization are very confusing and constantly changing. If a student organization is qualified for tax-exempt status, it would most likely be covered under 501(c)(3) or 501(c)(7) sections in the IRS tax code and would file a form 1023. There is also a possibility that an organization with a primary purpose to support the university or a department could qualify under 501(a). These groups would file a form 1024 with the IRS. The application process will take a minimum of six months, but may last more than year before a tax-exempt certificate is issued.
Student organizations must be aware that they may be liable to pay sales tax on some fundraising efforts. Even if the have a tax-exempt number, sales tax is to be collected on items and services such as amusement services (live or recorded performances, movies or plays, exhibits or displays and spectator sports), ready-to-eat food items, items for resale (t-shirts, posters, decals, etc.), and rental of tangible personal property. University and college student organizations will be exempt from taxes if the student organization sale of taxable items lasts only one day and does not hold more than one of these sales per month. All funds collected from these special sales must go to the organization and must not be used to pay officers or individual members. The organization must file a certificate with the state comptroller's office and provide proof they are affiliated with an institution of higher learning. Student organizations selling items more than once a month or for longer than one day must obtain a tax certificate number and pay the appropriate sales tax on the item sold.
Invoices
When billing a TTUHSC department or a company for an expense (table at event, registration, e.g.) you will need to send an invoice. We have an example invoice below to provide an idea of what information should be included.