Booster clubs and local businesses are vulnerable to fraud and the bad actors know it.
A practice that has been in place for years now, has scammers contacting local businesses to sell a sponsorship of their local high school athletic teams. They have gotten quiet savvy at it as well. With a little bit of research, they will have the names of the booster board members and will cite a name to lend credibility. They will go through a well rehearsed sales pitch explaining how it benefits the school and community. They will even go as far as promising a banner that will be displayed on the field and in the gym, or specific merchandise.
The strange thing is that in some cases, the scammers will send the promised merchandise to the school, with no one the wiser. A friend that is on the board of her school’s booster club recently told me about how one local business has been paying $1,000+ per year for 4 four years in support of the school which has never seen a single penny.
The hurt to the booster club is that they are missing out on monies that they would have normally been able to get. The story mentioned above also said there were around ten local companies within 2 miles of where we were sitting that have fallen victim to this. If you think about it, one school has missed out on roughly $10,000 in donation revenue and for many schools this is about 20 percent of their annual fundraising. In Fairfax County Virginia, there are 32 high schools. If the scammers have had the same success with all of the local communities, that would be an astonishing $320,000 annually, for one school district in Virginia.
Now let’s really put this to scale, there are 386 public schools in Virginia, if we take the same success that they had in Fairfax County, that would come to $3,860,000. Even if they were half as successful as the example I was told about, that is still quite a haul for providing no service.
My friend, who is also an attorney, was able to track down the company that was committing the fraud. She took the time to file grievances with the attorney general of Virginia and Texas, where the company is based and neither cared to look at it.
The real loser in all of this is the local business that was trying to do a good thing by supporting their local community. They are thinking that they are making a donation and are getting nothing in return.
What can these local businesses do? Not much really, but they can do their homework. Ask if it is tax deductible and ask for the tax ID number. Almost all booster clubs are registered non-profit organizations and the sponsorship is tax deductible. Ask for the website of the booster club and verify the contact is listed. Lastly, never send a check or payment to a company that is not the official booster club.