Alumni Chapter Finances
All financial operations of chapters in the United States are governed by the 501(c)(3) IRS status granted to Brigham Young University. This allows the operation of educational activities to go without assessment of corporate federal income taxes and also grants exemption from payment of sales tax in Utah and Hawaii. Each chapter is to be self-supporting and operate on a break-even basis. BYU Alumni does not provide any direct financial support to its chapters.
Chapter Financial Responsibilities
Chapters are expected to pay for:
- All event-related expenses
- Cost of reserving a facility
- Food and beverage costs
- Taxes and gratuity
- Costs associated with a guest speaker, performer or group including travel, lodging, event admissions etc.
- Postage costs for fliers, postcards or newsletters
- Chapters can ask BYU Alumni to design, print and mail fliers or postcards for chapter events. The chapter’s accounts will be used to pay the costs.
- BYU Alumni may decide to pay for a postal mailing based on certain criteria. Such requests from Chapters will be referred to the Alumni Communications team. The criteria being considered are:
- Is there a broad enough appeal for the event that an email will not be sufficient?
- Is the potential financial benefit for the chapter large enough to justify the cost?
- Is this a series of events, across several chapters, where the economy of scale can improve the cost basis?
- The lead time for such mailings is 6 to 8 weeks before the event.
- Ongoing and miscellaneous needs of the chapter
- Stamps, envelopes, stationary, gifts, decorations, etc.
- Annual chapter leadership conference registration costs for additional members of the chapter (beyond the two that are complimentary).
Establishing a Local Chapter Bank Account
- Tax laws in various states are becoming increasingly complicated. BYU has Alumni Chapter Finances Chapter Financial Responsibilities Establishing a Local Chapter Bank Account determined that we will not be opening new accounts in states where state requirements exceed a reasonable accommodation.
- When a new account can be opened, follow these general instructions. A bank or credit union account (checking or savings) may be opened in the name of the chapter. Each account must be coordinated with the BYU treasurer by following these steps:
- Obtain account forms from your local bank or credit union. Try to find an alumnus who works in the banking industry that might waive the fees for a chapter account, or seek an institution that will waive the fees for a small, non-profit entity.
- An IRS letter establishing the non-profit status of Brigham Young University may be available to chapters for this purpose. Contact the alumni staff.
- Fill out the forms as much as you can. The account title must include BYU. There should be three signers on the account, we suggest: (1) chair, (2) vice-chair, and (3) chapter treasurer.
- Never place chapter funds in a personal account
- A financial evaluation and statement is due to the alumni activities office by August 31 of each year. (See the sample report Page 42) Assuming all transactions have taken place from the chapter banking account, bank or credit union statements are acceptable.
- Funds accumulated for a chapter replenishment grant will be housed in a BYU financial services account at BYU. This account is tracked by the alumni staff.
- To deposit money in your chapter’s replenishment grant fund:
- Make all checks payable to BYU and add the chapter’s name in the memo line.
- Clearly distinguish individual donations from funds generated by event proceeds.
- Individual donations included in a check from the chapter must be identified by:
- Name and address of individual donors
- Check number (a copy of the check is preferred)
- Mail all funds to the alumni activities office and to no other location. The money will be deposited to your chapter’s replenishment grant fund.
- Donations you receive for Replenishment Grants are sent to the alumni staff. The will make sure the LDSP receives and receipts the donation.
Fundraising to Support Alumni Chapters
- Event Fees – Ticket prices for any activity involving food, recreation, or entertainment should cover all expenses for the activity and allow for a small surplus.
- Business Underwriters or Contributors (Sponsors) – Watch for alumni whose businesses are willing to help defray the costs of an event, totally underwrite the costs, or provide other services.
- Most sponsors will choose to deduct their sponsorship fee as a business expense rather than a charitable donation. They may request a W9 for that purpose.
- Should a sponsor request a tax donation receipt, follow these steps:
- Send the check to the Alumni staff
- If the check is deposited to a local account send a copy of the check along with all contact information of the sponsor to the Alumni staff
- Include a valuation listing of whatever benefit the sponsor received for their fee
- All of this will be delivered to LDSP for recording
- Individual Donations – Chapters may ask local alumni for donations to help cover chapter expenses. These donations may be tax deductible; however; tax laws regarding charitable donations are increasingly complicated, so chapter leaders are encouraged to consult with alumni staff or LDS Philanthropies before soliciting donations.
- Donors receive no goods or services in exchange for the donations.
- The chapter is to keep detailed records of such donations; name of donor, date of donation, address, phone, amount, check # (a copy of the check is preferred)
- All of this information must be submitted through the alumni office to LDS Philanthropies.
- These funds are to be kept in a chapter account and accounted for in the year-end report.
*Keep in mind that occasionally alumni appreciate an event that has no costs involved. It is better to make big amounts of money at one time than nickels and dimes at every activity.*