Bryn Mawr Alumnae Club Handbook


Chapter 6: Finances

Club Financial Records and Accounts

Club treasurers are responsible for maintaining the club's treasury for the duration of their term.

The responsibilities of the treasurer include:

  • Work with President to prepare a budget
  • Maintain appropriate bank account in the club's name
  • Receive and keep accurate records of all incoming money (dues, gifts, fundraising)
  • Pay all club bills and keep accurate records of all expenses
  • Ensure that the club complies with laws relating to fundraising and taxes; file necessary forms
  • Report on finances at Board meetings
  • Keep a file with bank account numbers, bank statements, copies of tax forms and exemption certificates, bulk mail permit (if any)
  • Send regional scholarship contributions and a list of contributors to the Alumnae Office or keep separate records of regional scholarship contributions if managed by the club
  • File an Annual Finance Report to the Alumnae Office in June of each year
  • Ensure there are adequate funds in the treasury to support ongoing programs

The outgoing treasurer should turn over all financial statements, records, and other related materials promptly to the newly elected treasurer at the conclusion of her term. Newly elected treasurers should perform an audit of the financial records and have a clear understanding of the club financial history. The transfer of financial records should occur following the close of the fiscal year.

The Alumnae Association strongly recommends that club financial records be maintained on a computer accounting/spreadsheet system. For treasurers who do not have access to a computer, financial records of the club must be maintained in accordance with standard accounting practices. The treasurer is authorized under the bylaws to receive and disburse funds. Funds may be disbursed only with the authorization of a club officer other than herself.

Club funds are to be used solely to benefit the club. The treasury is maintained to meet club obligations including the printing and mailing of newsletters and the expenses for club activities. Treasurers should make clear to club officers the system for reimbursing expenses. All invoices should be in the name of the club and payable only after approval is indicated on the invoice by the authorizing club officer. The treasurer should also make clear to all officers the amount of discretionary money that is available for them to spend on a particular project.

The treasurer is required to file the year-end financial statement with the Alumnae Association. The Alumnae Association provides the form (see Appendix) for this purpose. At the annual meeting the treasurer is also required to report on the financial condition of the club. In accordance with the bylaws and the Federal regulations governing tax-exempt status, treasurers must adhere to rules governing disclosure of the club's financial status.

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Budget

No matter what the size of the club or group, it is useful to maintain a budget to serve as a guide for planning. Prepared by the treasurer with the president, the budget estimates income and basic operating expenses such as the cost of newsletters, telephone networking, postage, and officers' expenses.

Sample Club Budget Categories

Category Type
Event Income Income
Interest Income Income
Invest Income Income
Membership Dues Income
Other Income Income
Scholarship Donations Income
Bank Charge Expense
Board Expense
Board postage Sub
Gifts Given Expense
Mailing Expense
Board mailing Sub
Membership mailing Sub
Meeting Expenses Expense
Flowers Sub
Refreshments Sub
Room or production Sub
Misc Expense
Newsletter Expense
Newsletter Postage Sub
Newsletter Production Sub
Other Expenses Expense
Printing Expense
Special Event Expense
F1owers Sub
Food Sub
Room Rental Sub
Special event mailing Sub
Supplies Expense

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Dues

Dues generate income to pay for mailing information to members and conducting programs of interest. The level of dues depends on the plans and goals of the club. Dues range from an annual rate of $15 to $50.

Choose a dues structure that works for your group. A variety of dues categories include:

  • Regular members;
  • Recent graduates (reduced rates);
  • Sustaining members (members who pay higher dues with the understanding they will not be called upon to handle volunteer tasks).

Dues are only tax deductible if the club has it's own 501(c)3 or 501(c)7 exemption with the IRS.

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Bank Accounts

The club treasurer should open the bank account as the principle signature authority. A second officer, usually the president, should have signing authority as well. The account should be opened in the name of the club. To open a bank account the treasurer will need the following:

  • A check;
  • The club Employer Identification Number (EIN number). If your club does not have an EIN number, or you don't know what the number is, contact the accounting specialist at the Alumnae Association. Filing for an EIN number is fairly easy and a number is usually assigned quickly;
  • The club's 501c(3) or 501c(7) tax exempt number, if your club has tax exempt status;
  • The social security number of the second club officer who has signature authority over the account (the president).

Do not open an account for a club using your personal social security number. This will cause problems with the Internal Revenue Service for the person when she files her income taxes.

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Expense Policy

Most of the expenses of running the club are covered by the club treasury. Some alumnae prefer to contribute their club activity expenses and time to the College. In this case, the alumna is responsible for determining what activities are tax deductible, for retaining appropriate documentation of those expenses, and for applying to the Alumnae Association for a tax deduction voucher.

Certain club officer expenses are the result of voluntary services given for specific Alumnae Association programs (e.g., Volunteer Weekend). Here, the alumna has two choices. She may ask for reimbursement or she may pay the expenses and ask for a tax-deduction voucher from the Alumnae Association to claim a tax deduction. In any case, she must notify the Alumnae Office of her choice within 30 days of the expense payment.

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Non-Profit Status/Federal Taxes

Under Section 501(c) (3) of the Internal Revenue Service Code, the Bryn Mawr College Alumnae Association as a ‚Äúcharitable or educational organization‚ÄĚ is exempt from paying federal income taxes, and contributions to this organization are income tax deductible. These tax advantages are also available to clubs and groups associated with the Alumnae Association in an umbrella arrangement if they have notified the accounting and financial specialist in the Alumnae Association office. Some clubs have their own exemption obtained independently before the Alumnae Association was granted the umbrella exemption.

Since the procedure for obtaining a 501(c)(3) exemption could be somewhat involved and cumbersome for a club, we suggest that individual clubs be listed as subsidiaries under the Alumnae Association's 501(c)(3) exemption. This will necessitate listing a contact person for the club and their address. The Alumnae Association files this information annually with the IRS, in February. The club must obtain an EIN number (Employer Identification Number), if it does not already have one, before the club can be listed as a subsidiary of the Alumnae Association. The Alumnae Association will send the necessary forms and instructions for obtaining an EIN number, or the current number for the club if a number has already been assigned to the club, to the contact person for the club. This number is also referred to as a Tax ID number. It is used when opening bank accounts. The accounting specialist in the Alumnae Association office should be notified when a new club is being formed and when the contact person changes for an existing club, so that the information that we file with the IRS stays current.

While tax-exempt organizations do not have to pay income taxes, they do have to report income. If a club has gross annual receipts (from dues, investments, donations, assessments for special events, etc.) exceeding $25,000, it must file an IRS form 990 or its short Form 990EZ and Schedule A 4 1/2 months after the end of its annual accounting period. All clubs should send an Annual Finance Report or a copy of a filed 990 report to the Alumnae Office at the end of their fiscal year (see Appendix for sample form) regardless of the amount received.

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State Taxes

Because state laws vary, each club should consult an accountant or local tax office for information about state and local filing requirements. If your club is in a city or state with a sales tax and you anticipate many purchases, it would be to your advantage to file the appropriate form for state or city sales tax exemption. Investigate these possibilities on your local level. Sales tax exemptions are not available in all states.

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Financial Records

Clubs must adhere to the following two procedures to maintain tax-exempt status: A club that receives tax-deductible contributions and disburses money must have a separate account in its own name. It is important that club funds not be commingled with any other bank account at any time, however temporary.

In addition to reporting annually to the IRS, some clubs are required, because of location, size, and/or financial status, to have an annual professional audit. Even if this is not a government requirement for your particular club, you might want to protect yourself by having the club's books audited by a paid or a volunteer accountant who is not a club officer.


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Insurance

In most cases, insurance for events is provided under the umbrella policy of the venue in which the event is held. Please contact the Alumnae Association if you have questions about specific insurance issues. Insurance requests will be reviewed on a case-by-case basis.

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Alumnae Regional Scholarship Funds

If regional scholarship funds are handled by the club treasurer, she must keep an accurate record of donations and donors and send the contributions and a list of donors to the Alumnae Office (as they are received) before May 15 each year.



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