Clubs/Associations: Finances
Keeping your Brown Club in the black is actually not that difficult. Watch the pennies and the dollars will take care of themselves.
Organization
Each Club elects or appoints someone to the office of
Treasurer. The Treasurer’s responsibilities may vary from Club to Club, but generally the Treasurer will oversee all of the financial aspects of the Club, including the following:
- Work with the President or Co-Presidents and the Board to establish a viable budget for the coming year.
- Manage Club bank accounts.
- Manage revenue collected through events.
- Manage annual dues collection and recording process (in some cases, this may be the job of the Membership Chairperson).
Budget Planning
This should ideally take place during the summer before the start of the program year. If that is not possible, the budget should be established no later than November.
- Estimate income based on last year’s income.
- Estimate expenses based on planned events and their projected costs.
- Adjust the planned activity schedule to ensure that anticipated expenses do not exceed anticipated income. The Club Board must consider the full calendar year in developing the budget. Fiscal prudence dictates that you will not increase your projection of income without a clear idea of where that increased income will come from.
- Monitor the budget versus expenditures regularly (monthly is recommended) to see if projections are still on target. If one of your early programs is less successful than anticipated, anticipated future expenses should be reviewed to determine where cuts can be made and savings realized.
Bank Accounts
Most Clubs have a bank account in the name of the Club at a local bank for the following:
- Deposits
- Savings
- Writing of checks
- ATM cards
If the BRAVO Dues & Events System is used by the Club, the Club must assign a contact person, often the Club Treasurer, to interface with Citizens Bank in Providence. The Club contact person will set up the Club as a sub-account of the main BAA Citizens account. He/she is issued a Citizens checkbook and an ATM card to be able to access monies that are deposited into the Club’s sub-account through an event or through dues payments.
Income and Dues
Learn more about the four primary means by which a Club receives income:
Tax Exempt Status
As non-profit organizations, Brown Clubs can enjoy an exemption from federal income tax by electing to participate under the umbrella of the Brown Alumni Association. Brown has secured a “group exemption letter” which allows subordinate organizations (i.e., local Clubs) to operate under its 501(c)(3) exemption without the necessity of filing a separate application. This exemption also makes certain donations to your Club tax-deductible. If you are interested in joining or are uncertain if your Club participates under the umbrella, please contact
Jennifer Williams Ketay '63, Assistant Director, Clubs/Associations. As long as your Club does not take in over $25,000 per year, there are no reporting obligations to the IRS as a result of your state or federal exempt status.
Please note that participation under the BAA umbrella does not, in and of itself, exempt your Club from applicable state or local sales tax. However, once you participate, you can apply to the appropriate local authorities for such an exemption. Exemption from state tax does not impose greater restrictions than those contained in Section 501(c)(3) of the Code.
To apply for exemption from your state's taxes, you need to request and complete the appropriate form from your state's Department of Taxation. As under the federal Code, Brown Clubs qualify for exemption from state taxes as "charitable and educational organizations" (note: 501(c)(7) "social and recreational Clubs"). While this form will require a detailed description of your current and proposed activities, if your Club is exempt from federal income tax under the Brown umbrella, you can use the list of activities listed to secure that exemption as a resource. We can also give you a copy of the most recent IRS determination letter to include with your state tax exemption application.
Once your Club receives exemption from state sales tax, you may be eligible to receive a refund of such taxes paid for the three years immediately preceding. Check with your state's Department of Taxation for details.
