WHY DO WE NEED A HOUSE BOARD?

Transcription

1 WHY DO WE NEED A HOUSE BOARD?

2 Presented by Suzanne Giffen Alpha Province Coordinator of Chapter Support Donna Koppert House Board Support, Kappa Headquarters

3 Function, responsibility, and duties of a house corporation and its trustees Business of the corporation State and IRS filings Finance Record-keeping Chapter property Chapter relations

4 What does Kappaland L ook Like? 62 house corporations own houses 7 own lodges (only one of these has beds) 33 have university dorms or houses 9 have university meeting rooms or suites 7 rent property from non-university landlords 23 chapters are totally unhoused Chapter sizes range from 34 to 472 members Value of property owned by house corporations $210,738,100 (as of 6/30/13)

5 What Does a House Board Do? Provide for the continuity and maintenance of the physical property of the chapter Administer all business relating to the property With the chapter and AB, develop the house rules and live-in rules (if applicable) Submit to the Fraternity an annual financial report and budget Maintain (on KeyReports) a current list of HB officers Notify the CCS of any fundraising, or plans for building, remodeling, purchasing or renting of a chapter facility

6 House Board Meetings The Board should meet a minimum of 4 times a year, including the Annual Meeting of all members of the corporation Ex officio members should be included in all meetings Minutes should be taken and sent to the CCS, the PDC and all HB members Bylaws should be reviewed regularly, and updates sent to Headquarters, the PDC and the CCS. The BL must allow for virtual meetings and/or electronic voting, if applicable Each state has its own rules about virtual meetings (Skype, voice, ), and votes taken virtually must be ratified at the next in-person meeting

7 Term of Office House Board trustees are elected annually at the Annual Meeting to manage the business of the corporation. (i.e. to serve as the House Board) Trustees are elected for a 3-year term House Board officers are elected by the trustees and their term of office is 1 year No officer should be elected to the same office for more than 3 terms Ideally, there should be 7 trustees, per Fraternity Model House Corporation Bylaws Trustees must be members in good standing (i.e. members of their local alumnae association or have paid their dues via Dues Direct)

8 T he Government Stuff EIN number: This is the first step in forming a House Corporation. It is the HB s Tax Identification number. It is issued by the IRS. (EIN= Employee Identification Number). This is a Federal number. The state will issue a state identification number that is used only for state correspondence. You need an EIN number to open a bank account. Corporate status: Each state has online resources for incorporating as a non-profit corporation. Applications are available at the Secretary of State website, and usually require sending Articles of Incorporation, Bylaws, and the payment of a fee. Tax-exempt status: Kappa House Corporations apply for 501(c)(7) status via Forms 1024 and This status relieves us from paying income tax on our member income.

9 Some Information About Taxes All House Corporations must file an IRS return, regardless of income It is due to the IRS on or before November 15 If your income is under $50,000, it is a simple 990-N e-postcard form Refer to the IRS guidelines to determine which 990 form to use, depending on income and assets Refer to your state for filing requirements

10 ???? UBTI???? Unrelated business taxable income Non-member income It s wonderful to have it! BUT... All UBTI over $1,000 must be set aside and used for 501(c)(7) allowable purposes (or pay the tax!) Page 6 of the Annual Report (HBT-01) has the statement that should be included in the minutes of your first HB meeting in fall, setting aside the UBTI portion that exceeds $1,000

11 What does set aside mean? UBTI income must be spent on allowable purposes Generally, this is only educational or charitable expenses subject to IRS definitions Amount over $1,000 must be recorded in minutes each fall (usually at first HB meeting) Proper wording is on Page 6 of House Corporation Annual Report There must be a clear enough paper trail to pass an IRS audit! See the IRS Record Retention Schedule on the website for how long minutes, bank statements, etc. must be kept

12 Documents to Retain per the IRS Articles of Incorporation Corporation Bylaws and Standing Rules Minutes of corporation meetings IRS Letter of Determination and other tax records External financial audits Employment records Financial records Legal records Property records See Record Retention Schedule for complete listing

13 Documents to Retain per KKG Current copy of Fraternity Policies General correspondence Current training manuals: ie. Blueprint for House Boards Annual Report and Budget Personal property inventory (updated yearly) Insurance certificates Conflict of Interest Policy Whistleblower Policy See Record Retention Schedule for complete listing

14 So What Do We Do? If you have a common area Make sure it is safe and comfortable for the members Make sure it is decorated to the standards of the other sororities on campus Make sure it is well-maintained, clean and that the chapter is properly using it, and is handling situations if rules are being broken Hold an orientation to discuss finances and expectations

15 What Else Can We Do? Have a pizza party! Help the chapter plan a Founders Day dinner/event Pay for the storage facility, if applicable Send a House Board member or an additional chapter member to Convention or Regional Meeting Bring treats during exam week(s) Listen to their input on things they need clickers for recruitment, new furnishings, additional ritual equipment, additional security (if the landlord allows), new shower curtains, etc.

16 H ow Do We Pay For T hat? Income RENT From the chapter, not individual members Sample House Corporation/Chapter Lease (HB-18) Covers loans, taxes, routine upkeep, and small projects MAINTENANCE FEE Should be paid by ALL members Covers insurance premiums plus routine upkeep/maintenance of the facility and contents HOUSE CORPORATION FEE Paid by new members during their first year of membership Should NOT be used for operating expenses, but should be put into savings for larger projects, remodeling, major expenditures

17 Other Possible Income Sources Chapter / House Department excess (non-taxable) This should be transferred only in May/June, not at the end of each semester! Other HB Fees charged to members (non-taxable) Parking fees House Fee* Gifts / Donations From whom??? From alumnae (non-taxable) From parents clubs, other non-kappa sources (UBTI) Investment income (UBTI) Interest on bank accounts, savings account Other investment income

18 Invoice Sample, by Semester Number of active members returning: 120 Number of new members: 45 Maintenance Fee: 165 X $100 = $16,500 House Corporation Fee: 45 X $150 = $6,750 Total fall fees: $23,250 1/3 due October 1 ($7750) 1/3 due November 1 ($7750) 1/3 due December 1 ($7750)

19 H ow Do We Know What to Charge? E xpenses What did you spend last year? Was it enough? Is the common area looking shabby? After you pay the insurance bill (approx. $25 per member, plus another $80-100)and any other fixed annual expenses, what is left over? Do a 3-5 year plan on major decorating and prioritize it. How much do you need each year to accomplish it? Have you budgeted for sending someone to Convention or Regional Meetings? What does the chapter need?

20 General Rule of Budgeting Plan your income based on 95% of the number of members you expect Plan your expenses based on 105% to 110% of what you expect to spend Your reserves / savings should be 1.5 to 2 times annual expenses

21 Chapter Relations Communication, communication, communication Regular communication with Chapter House Chairman, Chapter Treasurer Ex-officio members must be part of any house corporation meetings Copies of minutes sent to all House Board members, PDC, CCS With the Advisory Board and Chapter Council develop house rules Hold orientations in the fall and the annual meeting in the spring

22 Resources Blueprint for House Boards Your CCS Chapter Support Chairman Donna Koppert, House Board Support MJ Insurance Kappa website Documents Webinars

23 Questions?

24 Wrap Up Purpose Duties and responsibilities Government stuff Finance Chapter relations

25 Thank you for all you do for our chapter women Volunteers are the backbone of our chapters