We simply write a check for the total amount collected every quarter and send it to this organization. This money travels through our bank account. How does this get reported on a Schedule C at the end of a year? Since the other organization is reporting it on their taxes, do we have to also pay any taxes on this money?
As long as you keep very clear records and the disbursements always equal the receipts, there are no tax implications. I would avoid going anywhere near the business' income and expenses accounts. When funds are received, book them as a liability, as they are owed to the other organization. When disbursed, reduce this liability account.
I would suggest looking for a better solution to this in the long run. Perhaps having the organization set up a bank account in its name, that you could make deposits to, but only they could write checks to draw out the funds.
As long as you keep very clear records and the disbursements always equal the receipts, there are no tax implications. I would avoid going anywhere near the business' income and expenses accounts. When funds are received, book them as a liability, as they are owed to the other organization. When disbursed, reduce this liability account.
I would suggest looking for a better solution to this in the long run. Perhaps having the organization set up a bank account in its name, that you could make deposits to, but only they could write checks to draw out the funds.