An Executive Director's point of view
July 29, 2015: Online financial needs
Here's how you can deal with this issue:
1. Designate one person (usually the CEO) to apply for and receive a credit card that will be used for association business. Keep in mind that the credit worthiness of the individual, not of the association, will determine whether the card is issued, even if it is called a "company card," the association's name appears on it, and other employees are authorized to use it. Also, the individual's credit record will be affected by late payments or non-payment.
Use that account with vendors who require a valid credit card number be kept on file.
While it is legal to use a "company card" for personal business (since the card actually belongs to the individual, not to the association), it's best to use it only for association business, so time won't have to be spent examining purchases and determining whether or not an expense was for business or personal use.
If you do not have direct control over expense reimbursements, you may not want to use a credit card in your name for association expenses. You may prefer a card issued to the CEO or whomever authorizes reimbursements, so you won't have to wait for late payments or get stuck with charges you shouldn't have to pay for.
When you are no longer employed by the association, cancel the credit card immediately, so you will no longer be liable for association purchases. Don't wait for your successor to acquire a new card.
2. Or, designate one Board member to apply for and receive a credit card that will be used for association business, just as you would designate signators on a bank account. That person is likely to want to cancel the card at the end of a Board term, so be prepared to apply for a new card each time a new Board is elected.
3. Some vendors require credit card payment for the first charge but will accept checks, wire transfers, or PayPal payments for subsequent charges. When that occurs, you may have the option of removing your credit card number from the vendor's record after payment is made. That will help prevent you from being automatically charged for later purchases.
May 29, 2014: You can't budget hope
Well, you can't budget hope. And you shouldn't budget income that has to be hoped for.
When preparing a budget, start with the approved plan for the year. Determine what it will cost to engage in those activities. Then project the amount of income that can REALISTICALLY be expected from various sources.
If projected income is less than expenses, you need to cut some activities. If you decide, instead, to increase budgeted income, how much more will you need to spend to achieve that increase?
Don't say you'll work harder or smarter or better. What will it cost to do that?
Budget what can really be done, not what you "hope" really will be done.
December 15, 2013: Financial article posted
December 09, 2013: It's not just expenses
He believes the ability to identify new revenue sources is the most important attribute of an association finance officer.
Find out more about how associations can benefit from the financial expertise of staff and contractors in Forum.
November 12, 2013: Associate members are UBIT
If you only have a small number of associate members, it may not matter. You may be able to balance off the income with expenses, just as you do with advertising or sponsorship.
But it would be a good idea to check with your attorney or accountant to make sure.
May 14, 2013: Always budget a profit
Well, there is no prohibition against not-for-profits earning a profit. In fact, they always should and it should be budgeted at the beginning of the year, and not merely consist of whatever might be left over at the end of the year.
The only legal requirement is that the profit (or "surplus," as it is usually called) not be distributed to the Board, employees, or members. The profit stays in the organization (but bonuses can still be paid).
A profit provides a cushion in the event of a drop in dues, program registrations, or anything else, and it provides start-up funds for new projects. It's an association's way of saving money - building a reserve - which is not only prudent but may be necessary to maintain the organization over a long period of time.
Many Board leaders, though, work in government, where they are given an appropriation (which they don't have to raise) and must spend it during that fiscal year. Others work in charitable organizations that are accustomed to grant directives mandating expenditures during a particular time frame.
So, they naturally assume that not-for-profits must operate under those same conditions.
You may have to be forceful when educating Board members about the need to earn a profit and build a reserve. When unexpected income is received, they may want to spend it.
Remind them that it's a bad idea to go out and blow a bonus check.
April 15, 2013: Should free lunch be taxed?
January 23, 2013: Stolen event receipts
The next morning, he found the door unlocked and the box empty. Nothing else had been stolen from his office - not even the contents of the petty cash box.
More than a year has passed and the crime has still not been solved.
Message for associations: Always store cash receipts in a secure place.
Not in a box, or a drawer, or a cabinet in your office (not even in a locked drawer or cabinet). Not in a hotel room safe or an office safe that can be picked up and carried away. Not in a container transported with your meeting or expo materials. Not in your briefcase or purse, or coat pocket.
Make arrangements to have cash stored and shipped securely. It not only enables you to comply with legal and insurance regulations - it's just common sense.