How to Handle Cash Donations Properly (and Protect Your Volunteers in the Process)

After a fish fry, the treasurer counted $1,840 in the cash box. The event chair remembered collecting roughly $2,100 at the door. Nobody could explain the difference. There was no documentation of how much was collected, who had the box at what times, or when the count was done. No one accused anyone of stealing — but no one could rule it out either. The volunteer who ran the cash box that night never volunteered again.

The fix is a simple counting procedure that takes 15 minutes and protects everyone involved.

The Two-Person Rule

Never handle your organization's money alone. This is not optional.

• Two people count every time — from the moment counting starts to the moment the sheet is signed
• Both people sign the count sheet with the final total
• Neither person should be related to the other, or in a position where one supervises the other in the org
• If you're short on volunteers, count in a visible location in front of the remaining crowd — not in a back room

This rule exists to protect volunteers just as much as the money. Accusations of theft can end long friendships and fracture organizations that took decades to build. The two-person rule does not prevent dishonesty — it makes accusations impossible to sustain, in either direction.

Setting Up the Cash Box Before the Event

Good cash handling starts before the first dollar comes in.

• Record your starting cash — write down exactly how much change you started with ("Starting cash: $150 in small bills and coins") on the count sheet before the event opens
• Use a lockable cash box — not a coffee can, a zippered pouch, or an envelope
• Assign the cash box to one named person — not "whoever is at the table"; write their name on the count sheet
• Give that person a list of expected ticket prices or suggested donation amounts so they can make correct change without guessing

If you do not record the starting amount, you cannot calculate net proceeds at the end. You will be estimating, and estimates are how you end up with a $260 gap and no explanation.

During the Event

Once the cash box is open, the rules are simple.

• No one removes money from the box without documenting it — if you need to pull cash for any reason, write it down
• If you break a large bill, document it explicitly: "Broke $100 bill — added four $20s to box, removed $100 for change"
• If a second collection starts — a 50/50 raffle, a separate donation jar, a silent auction envelope — use a completely separate container; never mix it with the main cash box
• Assign someone to periodically check that the box is secured and attended throughout the event; do not leave it unattended on a table while the crowd thins out

The goal during the event is to end up with a box where every dollar in has a corresponding record. You will not get there perfectly — but the closer you are, the easier the count becomes.

The Count

Do this before you leave the venue. Do not take an uncounted cash box home.

1. Remove all bills and sort by denomination
2. Count each denomination separately and write it down: "$20s: 14 = $280. $10s: 8 = $80." and so on
3. Count coins separately
4. Add everything together — that is your total collected
5. Subtract the starting change you recorded at the beginning
6. The result is your net proceeds
7. Both counters sign the sheet — name, not initials

Keep the count sheet. It is your paper trail. If there is a discrepancy between this number and what was estimated during the event, you now have documentation of exactly what was in the box and when. That documentation is what separates an unexplained gap from a resolvable accounting question.

The Count Sheet

Every cash event should produce a one-page document with:

• Event name and date
• Starting cash amount
• Total counted (broken down by denomination)
• Net proceeds (total minus starting cash)
• Two signatures with printed names
• Deposit date — the date the money physically went to the bank

File it with your treasurer records. Do not throw it away after the deposit clears. If your bylaws specify a record retention period, follow that. If they do not, keep cash event records for at least three years.

Depositing the Money

Deposit within 24 to 48 hours. Cash sitting in someone's car or on a treasurer's kitchen counter is cash at risk — not from theft, necessarily, but from confusion about where it went.

• Use a bank deposit bag if your bank provides them; most will
• Keep the deposit receipt
• Record the deposit in your treasurer records: amount, date, and which event it came from
• The deposit amount should match your count sheet net proceeds exactly; if it does not, find out why before moving on

If you regularly deposit event proceeds at odd hours using a night drop, note in your records when the bag was dropped and when the deposit posted. The gap between those dates is normal — make sure your count sheet date matches the drop date, not the posting date.

IRS Rules for Cash Donations

For most event cash collections — admission tickets, general donation jars, 50/50 raffle proceeds — donors are not making a designated contribution. No receipt is required, and the IRS is not looking for individual donor records.

The situation changes when someone hands you a specific cash donation over $250.

• Get their name and mailing address
• Provide a written receipt: your organization's name, the donation amount, the date, and a statement that describes what — if anything — they received in return ("No goods or services were provided in exchange for this contribution" or "Donor received one dinner ticket valued at $25")
• Keep a copy of that receipt in your records

If your fish fry or annual dinner regularly attracts large individual cash donations, create a simple receipt template you can fill in on the spot. A half-page with your org name and the required language printed on it, with blanks for name, amount, date, and a signature line, is all you need.

Reducing How Much Cash You Handle

Every dollar that moves through a payment processor instead of a cash box is automatically recorded, accessible from anywhere, and not subject to "we think we raised about $X" accounting.

Offering an online payment option alongside cash does not replace cash at community events — it supplements it. Many attendees at a car show or bingo night prefer to pay by phone and will look for a card option if one exists. Some will even increase their donation because a round number is easier when they are not counting bills.

Potluck gives you a payment link or QR code you can post at your event — donors pay on their phone, the transaction is recorded automatically. Cash still happens; it just happens less often.

The setup takes a few minutes and does not require technical knowledge. You print the QR code, tape it to the table next to the cash box, and let people choose.

A Quick Reference for Event Day

Post this at the cash table if it helps.

• Starting cash recorded before the first dollar comes in
• Cash box assigned to one named person
• No money removed without documentation
• Separate containers for separate collections
• Two-person count before leaving the venue
• Both counters sign the sheet
• Deposit within 48 hours
• Receipt filed with treasurer records

The fish fry situation at the top of this article is not rare. It happens at car shows, bingo nights, annual dinners, and clubhouse fundraisers across the country every year. The organizations that avoid it are not more honest — they just have a 15-minute procedure that removes doubt entirely.

If you're tired of the two-hour post-event cash count and the "we think we raised about $X" accounting, Potluck handles the digital side automatically. Free to start.