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 Officer2. 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:Karin_Klinger@baylor.edu

Leslie_Poe@baylor.edu