District Financial Responsibility

Presented by Claude Carmack, CPANational President 2009/10

Items to cover:

• What is a budget and what should be included?• District Fundraisers• Use of the Foundation 501(c)(3)

Got Purpose?ARTICLE IPurposes

Section 1. The purposes of the district shall be to strive for the attainment of the ideals and purposes of

The National Exchange Club by:A. The building of local Exchange Clubs.B. Increasing fellowship between clubs within the district.C. Strengthening established clubs.D. Promoting the participation of local Exchange Clubs in the Programs of Service of The National Exchange Club.

What is a budget?

• A systematic plan for the expenditure of a usually fixed resource, such as money or time, during a given period

Why Budget?

• To determine funds needed to operate the District effectively

• To keep spending on track• To prepare for a successful year• To maintain fiscal responsibility• To be accountable to our members

How to Start

REVENUE- Calculate all sources of income

• Dues from members• Convention/Conference fees from clubs• Convention/conference registration fees• Special events/Fundraisers

How to Start (Cont’d)

Expenses – Calculate all expected costs Officer & Directors Expenses

DP/DPE Training Expenses – Nat. Mid Winter conferenceTravel costs

District Operation CostsDistrict BulletinBoard meeting costsConvention/conference costsSupplies/Postage

Committee Expenses – New Club Building Training Costs and VFR Reimbursements

Budget for GROWTH

Having a line item for club building is a must.• Charter Fee• Club Builder Expenses• Advertising a new Club FormationBudgeting for Growth contributes to new club building being a priority in the District.

Who is Responsible?

You and your District Board!!Treasurer/Finance Committee prepares from

information provided by the Board and Committees prior to start of fiscal year - July 1st.

BOARD REVIEWS/APPROVES

District Fundraiser

• Can a District have a fundraiser?• What do the Bylaws state?• Will it interfere with the clubs?

Should a district have a 501(c)(3) – The Foundation?

Tax Status of ClubsClubs are part of the NEC’s group exemption.

Exchange Clubs501(c)(4)

– Exempt from income taxes on dues revenue.

– Donations & contributions are exempt from federal income taxes.

– Donations are NOT tax deductible by the donor.

– Sales tax is handled individually in each state.

NEC Foundation501(c)(3)– Donations are tax

deductible by donors.– Pass through grants are

available to clubs.

Benefits vs Cost Analysis of becoming a 501(c)(3)

Other Financial Considerations for Districts

• Annual Audit• Annual IRS reporting (IRS Form 990-N) – Nov 15th• Club warning signs seen in district financial

statements