District Financial Responsibility

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

Got Purpose? ARTICLE I Purposes 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 conference  Travel costs  District Operation Costs  District Bulletin  Board meeting costs  Convention/conference costs  Supplies/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 Formation Budgeting 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 1 st. 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 Clubs Clubs are part of the NEC’s group exemption. Exchange Clubs 501(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 Foundation 501(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