One of your responsibilities as an advisor is to assist the chapter in managing its financial resources. For some chapters it can be quite simple, and for larger chapters it can involve handling thousands of dollars each year in revenue and expenditures. You will work closely with the treasurer, and you may be asked to cosign check requests, review purchase orders, and advise the chapter’s officers on financial decisions.
It’s important to document the chapter budget for transitions year after year, and how you do that is up to you. Think about budgets in one of two ways:
Incremental: budget last year is basis for budget next year; income and expenses vary only a small amount. Develop expenditures first then figure out how to generate income to cover. Be careful about this type if expenses are not that similar year to year, but if initiation and a few other programs are it, then this could work.
Zero-based: assumes nothing is repeated. Expenses and revenues start at zero and are built to accomplish tasks. Start by foreseeing revenue and allocating funds for programs, or plan programs and determine how to finance them. More common for student orgs who rely on student government funding – allows for careful examination of programs offered each year, eliminate “tired” programs, allows for clear picture of year ahead.
Create a simple excel document that accounts for income and expenditures. Sample here.
Budgeting for Your Chapter
Budgets provide a plan for how to use your resources, and a means to track revenues and expenditures.
Questions to consider:
- Do you plan programs first then figure out how to pay? Or do you project income first, then plan events?
- How do you plan revenue? Is your membership number consistent year to year? Think about a goal to increase membership numbers, thereby increasing income. This would allow for more programming throughout the year, and starting or further funding a local scholarship.
- Should you plan by position? Do certain positions need funds? Consider the Social chair, Newsletters, Communication, Marketing, Torch scrapbook supplies, and of course, Initiation Ceremony.
Decide what your organizational priorities are for the year:
- What are your organizational goals?
- Where do you want the bulk of your money going? Prioritize your events.
- Review your sources of income.
- Membership dues – try to balance keeping local dues low and funding activities. Note: local dues should only be collected once, when students first join. ALD fees are “one-time, lifetime.”
- Donations – ALD is a 501 c3 org; your chapter can accept tax deductible donations
- Fundraising – see Chapter Activities guide for fundraising ideas
- Student government funds - Try asking your student government for funding. As long as an event is open to ALL students, not just ALD members, you might be eligible to receive funds. Sponsor a speaker, for example.
- Review last year’s budget, where did the organization lose money and what was successful?
- How will you increase your successes?
- How much “risk” does the organization have within their budget?
- Do your homework
- Obtain quotes on potential costs- shop around
- Do not always overestimate- get real numbers
- To ensure safety of funds, always provide monthly updates and have the advisor and/or more than one member/officer approve expenditures
- Keep accurate records
- Budgeted costs
- Actual costs
- Any unanticipated expenses
Major Components of a Budget
- Operational costs (administrative costs)
- Office Supplies
- Does your chapter purchase honor cords for graduating seniors? See ALD Store Guide for an overview of honor cord options, plus information about other ALD items for sale.
Professional Development (Conferences)
- National Leadership Conference Registration Fees, Travel, Food
- Resources (books, subscriptions, etc.)
- Don’t be afraid to ask for discounts, specials, or check for free services.
- Collaborate with other organizations, especially other honor societies. It doubles your human and operational resources.
- When printing banners, t-shirts or other promo items, don’t date it. If you have too many, you can use them for other events or for the following year.
Catering Tips - Food is usually a large expense!
- Bulk quantities tend to be more cost effective than individual.
- Break food up into smaller portions
- Pick up orders instead of delivery
- When serving food for a large group, be sure that members and those that are hosting eat last (in the event that there is not enough food)
Where to Keep Your Money
Check with your student activities office for the policy regarding student organization bank accounts. Some require accounts be held on campus, while others allow for banking in a local/state/federal bank or credit union.
Most Alpha Lambda Delta local chapter bank accounts are on campus accounts, operated through the business office, student government office, or other specified department.
If your account is on campus, there will be policies and procedures in place. Be sure to meet deadlines or risk becoming unfunded or shut down! Be clear about expectations related to advisors having signatory authority. On campus accounts are generally preferable to commercial banking.
If your account is off campus, be sure to follow any campus policies that might be in place. The plus side to off campus accounts is they can typically act faster, provide more services, ATM and debit options, and offer flexibility. The risk or downside is changing signature cards every year. It requires a trip to the bank, new debit cards, etc. If you go this route be sure to change passwords frequently! An option is to only have the advisor as a signatory, to avoid yearly changes.
Overall: avoid using cash if possible. Again, follow the rules of your institution, and be very careful about where cash is held (do not leave it in your desk drawer!). Revenues should be collected by check, money order, or credit card (MHS). This provides a record and less risk of disappearing. Expenditures and reimbursements should also not be paid with cash - people lose receipts, commingle personal purchases, etc. It’s best to create a Payment Request Form. And all checks should require a second signature!
Alpha Lambda Delta is a 501 C3 charitable organization. Each chapter is assigned its own EIN (Tax ID number), and the National Office files a group tax return each year on behalf of all chapters. This underlines the importance of submitting your chapter annual report (due May 10 each year), as we use the information from the reports (particularly starting and ending balances) to complete the IRS form (Group 990).
Failure of a chapter to submit an annual report could result in the local chapter being responsible for filing with the IRS each year.
Normally, chapters can use the institution’s nonprofit status for sales tax exemption for local purchases, so it’s a good idea to check with your budget office for a copy of the certificate. You can also call the ALD National Office, as we have secured sales tax exemption in several states.