financial issues for student organizations student organization leadership development
Post on 19-Dec-2015
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Financial Issues for Student OrganizationsStudent Organization Leadership Development
The Role of Finances
• Financial health and stability are fundamental• All operations are ultimately dependent upon
financial resources and management• The Business Approach
– You should view your role in your organization as a manager of a business
• Understand potential legal consequences of your role
• Responsibility to pass good practices and training on to new officers
Review or Establish a Process• Steps that should be included in your
financial process:– Prior to expenditures:1. Budgets should be submitted for approval2. Submitted budgets should be checked by
Financial Officer or Treasurer3. Approval should be obtained from Executive
Committee of organization4. Approval should be obtained from Advisor5. Checks should require double signatures:
one from Treasurer, one from President
Review or Establish a Process– After expenditures:
1. All receipts should be submitted to Treasurer or Financial Officer
2. A financial report should be submitted in writing to Treasurer or Financial Officer and Executive Committee of organization
3. Recommendations should be made for future related expenditures
• Once you’ve reviewed or established a process, write it down!
• Pass the process on to new officers and advisors!
Overview ~ Tax ExemptionTo earn Tax Exempt Status from the IRS: (Forms on IRS Website)• Determine the type of Tax Exempt Organization - most common
types will be "Charitable Organizations" [c(3)], "Social Clubs" [c(7)] and "Social Welfare (or Service) Organizations" [c(4)]. Note: to gain exemption from Title IX prohibitions against single sex organizations, you must be a "Social Organization" exempt under 501c(7).
• File "Application for Recognition of Exemption under Section 501 (a)" - Package 1024 on IRS Website
• File "Application for Employer Identification Number"- Form SS-4 on IRS Website. Note: This must generally be done before a bank account may be opened for the organization.
• A helpful publication, although it is very lengthy, in this process is Publication 557- "Tax-Exempt Status for Your Organization". This contains all the information you need for applying for recognition of tax-exempt status. It is recommended that you download this form and refer to it frequently.
Important Point ~ Title IXSingle Sex Organizations must gain approval from the General Counsel's Office at Baylor University• Submit organizational documents and IRS determination letter
1. Constitution and bylaws - must indicate that:a. membership is not limited to persons pursuing or having interest in a particular study, profession, or academic discipline,b. membership is not limited to persons who have a high level of
achievement or other endeavor, andc. membership is not permitted to hold membership in other social
fraternities or sororities.2. The primary purpose of the organization must be social activities, and the organization must be recognized as exempt from taxation under section 501(c)(7). Submit a copy of the IRS Determination letter.
• Above items should be taken to Christopher Holmes in the Office of General Counsel, 213 Pat Neff, 710-3821. A cover letter requesting a determination from Mr. Holmes that the organization meets the requirements for exemption from the Title IX prohibitions against discrimination on the basis of gender should be attached. When this letter is received, take it along with your organizational documents to Student Activities to apply for your charter.
• What are the financial needs of your organization?– Establish non-profit status– Secure an EIN (Employer Identification number)– Earn tax-exempt status– Establish a bank account
Getting Started
Establish Non-Profit Status www.sos.state.tx.us
On Business and Public Findings
choose Corporations
Go to the Secretary of
State website to find Articles of
Incorporation for a Non-profit Corporation
Establish Non-Profit StatusFiling Guides
Choose “Nonprofit” from forms
and summaries
Establish Non-Profit Status
Choose form 202 either as a word
document or PDF
Articles of Incorporation for
a Non-Profit Corporation
Establish Non-Profit Status Summary
Non-profit Corporation (Forms on Secretary of State Website)1. Articles of Incorporation for a Non-profit Corporation - Form 202 2. Filing Guide - contains helpful information on selecting and filing to
form an organization.3. Draft Bylaws and Constitution - This must be done carefully,
particularly if you will be seeking exemption from Title IX prohibitions against single sex organizations. Make sure that Bylaws comply with the Texas Non-profit Corporation Act (available on Secretary of State website by clicking on "Business and Public Filings", then "Corporations")
NEXT…
Tax Exempt Status from the IRS
Step 1: Go to www.irs.gov
Step 2: Choose Charities and Non-Profits
Tax Exempt Status
Determine the type of Tax Exempt Organization - most common types will be "Charitable Organizations" [c(3)], "Social Clubs" [c(7)] and "Social Welfare (or Service) Organizations" [c(4)].
Note: to gain exemption from Title IX prohibitions against single sex organizations, you must be a "Social Organization" exempt under 501c(7)
www.irs.gov
Tax Exempt Status ~Charitable Organizations
Application
Tax Exempt Status ~ Social Clubs
Again…
Remember that to gain exemption from Title IX
prohibitions against single sex organizations, you
must be a "Social Organization" exempt
under 501c(7)
Application
Tax Exempt Status ~ Social Welfare (Service) Organizations
File "Application for Recognition of Exemption under Section 501 (a)" - Package 1024 on IRS Website
SS4
Application for Recognition of Exemption under Section 501 (a)
File package 1024
Employer Identification Number (EIN)
Note: This must generally be done
before a bank account may be opened for the organization.
SS-4
Tax Exempt Status ~ Social Welfare (Service) Organizations
Application
Thank You!
For additional assistance, please contact Student Activities at (254) 710-2371
or e-mail: