1. Business Matters 2013 Club Leader Workshop Jerry Sigler

2. Agenda Club Operations Tax-exempt Status Insurance Considerations Sales Tax Exemptions Raffles Sponsorships

3. Club Operations Bank Accounts – Keep operating funds and scholarship funds separate Reporting to Club Members – Expectation is that club board meets regularly, i.e., a minimum of four meetings per year – Annual budget approved by board – Treasurer’s report (in writing) at every meeting – Minutes prepared for every meeting Reporting to AAUM – In order to account for the utilization of our tax-exempt funds, the Alumni Association requires a general accounting of how each club utilized the funds it received from AAUM.

4. Club Operations Why have Bylaws? – Bylaws –provides the basic rules for the conduct of the club’s business and affairs – Provides clubs with a road map for conducting business – Conveys to volunteers what their responsibilities are and the length of their terms – Legitimizes that volunteers are working in an official capacity for the club (for insurance and other purposes) – AAUM has developed a set of model bylaws

5. Tax-exempt Status Recognized clubs benefit from AAUM’s tax-exempt status, but are not themselves 501(c)(3) – cannot separately accept tax deductible contributions Clubs are not encouraged to apply for own tax- exempt status (some have been turned down; if approved, record-keeping and reporting is onerous and some have lost exempt status due to failure to submit reports) Cannot participate in or contribute to political campaign activities or attempt to influence the outcome of an election

6. Insurance Considerations U-M Insurance Coverage ends June 30, 2013 AAUM working with non-profit insurance consultant to obtain new coverage by July 1 st Make NO assumptions about coverage after June 30 AAUM will communicate with all clubs as soon as coverage issues are resolved

7. Insurance Considerations-Events AAUM’s insurance extends to official activities of AAUM’s recognized clubs Events requiring “proof of insurance” – contact Regional Relations staff, allow sufficient time for Insurance broker to review contract Co-sponsored events – depends on documented level of U-M club’s involvement Get participants to sign Liability Waiver for strenuous or risky activities

8. Insurance Considerations- Individuals Coverage for club officers and directors, while acting within the scope of their duties Alumni volunteers are covered—but only to extent they are acting within the scope of their duties, so board minutes or other documents should define Does not cover losses from bank accounts not controlled by U-M (e.g., club checking accounts or separate scholarship accounts) Alcohol liability—always have it served by licensed bartenders, NEVER AT YOUR HOUSE!

9. Sales Tax Exemption Sales tax exemptions varies from state to state Many (like Michigan) accept proof of Association’s Federal tax-exempt status…but others (like Illinois, California, Florida and New York) do not Do not assume – verify with a local expert

10. Raffles Alumni must not be led to believe that the cost of raffle ticket is tax-deductible. – The purchaser has received something of value in return: the opportunity to win a prize (regardless of whether he/she actually wins.) Thus, the cost of the ticket is not tax-deductible. Postal regulations prohibit the sale and delivery of raffle tickets via US Mail. State of Michigan requires a license for each raffle, there are specific requirements and the state is very strict about compliance

11. Raffles-continued Clubs must maintain detailed financial records of all activity and submit a financial report at the end of the raffle. An unauthorized or improperly administered raffle could affect the ability of other U of M clubs (and AAUM) to obtain a license in the future, so please contact the Regional Relations staff prior to preparing to conduct a raffle. Outside of Michigan—please a consult with local expert

12. Sponsorship Sponsors are a reflection on AAUM’s and Club’s Brand – While the revenue might be appealing, we are selective in considering who we are willing to be aligned with—at both national and local level Sponsorship arrangements: – Specify in writing what the benefits are to the sponsor, i.e., mention on club’s website, an information table at the event, an opportunity to give a commercial pitch at the event, etc. – Specify in writing what the costs are to the sponsor…when and how will the sponsor pay you? – Cannot give alumni contact information to sponsors

13. Sponsorship-continued Prohibited from securing sponsorships from the following companies that have exclusive partnerships with the Alumni Association – Banking services: checking, savings, money market, credit card, line of credit, etc. (Bank of America) – Insurance (Liberty Mutual, Marsh) – Merchandise sales (M-Den) – Moving/relocation company (Stevens Worldwide) – Test preparation (Kaplan) – Specific questions, contact Dave Richmond, Sr. Manager, Advertising and Sponsorship at 734.763.9734 or davrichm@umich.edu

14. Questions?