Question:
Do you know of any rule or federal law that prohibits us at the State level (SILC) from selling T-shirts or doing any other type of fundraising or collecting donations to our organization. Our funding is minuscule and we are all volunteers. Your help is appreciated.
Answer: The Rehabilitation Act, Title VII, is the law that establishes the SILC and sets out its duties (required) and its authorities (allowed if included in your State Plan for Independent Living (SPIL)).
Section 705 of the Rehab Act includes this language: (2) AUTHORITIES.—The Council may, consistent with the State plan described in section 704, unless prohibited by State law— … (B) conduct resource development activities to support the activities described in this subsection or to support the provision of independent living services by centers for independent living
This means that you are allowed, but not required, to conduct resource development activities that assist the SILC in their duties or that assist the CILs IF the plan for resource development is part of your SPIL.
There are also regulations that apply to whether or not an expense is allowed with federal funds. 75 CFR 403 states that the cost must be necessary and reasonable for the performance of the Federal Award. Then beginning in 75.420 the regulations give a number of examples of costs that are not typically allowed. These include advertising and public relations (§75.421), so T-shirts are not typically allowed. If you purchase them with non-federal funds, of course you can do whatever you want, but you cannot pay for most promotional items with federal dollars. If you want to sell them as a fund raiser it is even more important that funds other than your grant pay for the purchase, and that your proceeds are only the profit you make on the shirts, not the full income.
There is an interesting exception that may apply. You are allowed to purchase whatever you need to perform the goals in your SPIL. If you have a goal in your SPIL related to outreach to youth, for example, you may be able to justify buying T-shirts or other promotional items to reach out to them and assist them in connecting with the IL Network in your state.
One more thing that may or may not apply. You notice the regulation quoted above says you may “conduct resource development activities”. It does NOT say fund raising, and in fact, fund raising is strictly prohibited with federal funds (§75.442). Be very careful that you never say your are “fund raising” with federal dollars. We don’t have a definition for resource development so it is up to each entity to determine what resources in your state can develope and how you want to do that. If it is included in you SPIL you should be able to develop resources.
*CFR =Code of Federal Regulations