Finances
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FINANCES
SOME NOTES ON A TREASURER’S DUTIES
A League treasurer serves as the chief financial officer of her League. A typical bylaws description of the treasurer’s duties: “The Treasurer will collect and receive all revenue, will be the custodian of these funds, will deposit them in a bank designated by the Board, and will disburse the same only upon approval of the President, or, in her absence, one of the Vice Presidents. The Treasurer will present statements to the Board at its regular meetings and an Annual Report to the membership at the Annual Meeting.”
True, but only the beginning. In most Connecticut Leagues, the treasurer also serves as an ex-officio member of the budget and/or finance committees, prepares the books for periodic audit, files the League’s annual 990-N on-line tax return with the IRS, and, whenever a League has specific “project” accounts, informs committee chairs if their expenses seem out of line with the budget or are anticipated to exceed the budget. Most treasurers are in charge of collecting money at League events or naming a designee to do it for them.
In Leagues that have a separate education fund, it is the treasurer’s duty to make sure that money destined for the ed fund never gets mixed with the money destined for the League, and that income and expense records are rigorously kept separate.
In all Leagues, the treasurer keeps track of membership dues. In most Leagues she works with the membership chair to keep accurate lists of members and dues paid and owed. In some Leagues the treasurer will then help the membership chair complete the annual membership census update for the LWVCT and LWVUS every January.
HOWEVER — In more than half of Connecticut’s Leagues, the membership chair works on recruiting and retention and has nothing to do with actually maintaining membership records. In those Leagues, it is usually the treasurer who keeps track of names, addresses, phone numbers and e-mail addresses, who completes the annual membership census for the LWVCT and LWVUS every January, and who inputs membership data changes into the LWVUS database and informs the LWVCT office of those changes on a regular basis. It is therefore increasingly crucial that anyone who is being nominated for a position as treasurer have excellent computer skills both with spreadsheets and with using the internet, and be willing to work with the LWVUS and LWVCT to keep membership data current on all levels. PER-MEMBER PAYMENTS
What is PMP?
Every local League pays an annual Per-Member Payment (PMP) to the LWVCT and the LWVUS for each member it has, other than National and Life/Honorary Members. Your League’s PMP obligations are based on your January 31 membership count.
In 2009-2010 your PMPs were set at $16.50 to the LWVCT and $29.20 to the LWVUS.
Note: A detailed explanation of the per member payment can be found in the President's Packet and under Frequently Asked Questions in “Tools for Leaders” both found in the member section of the LWVUS website, www.lwv.org.
When to Pay PMP
PMP may be paid in full at the beginning of the fiscal year in July, or on a regular semi-annual (for LWVCT) or quarterly (for LWVCT or LWVUS) basis. Both the LWVCT and LWVUS send balance-due statements to Leagues that pay semi-annually or quarterly.
National Members: PMP and Rebates
Most Leagues recruit their own members, but from time to time the LWVUS will assign a member to your League. This happens whenever someone pays dues to the LWVUS but lives within your League’s basic geographic area. Such members are called “National” members or “Nationally-Recruited Members” (NRMs) and will show up on your League’s LWVUS roster with an “N” prefix on their membership status. Your League has no PMP obligation for those members, although the LWVUS and LWVCT do ask you to put them on your mailing and/or e-mail lists, send them your bulletins, and in general try to keep them apprised of what’s going on. All this costs money. The LWVUS therefore provides a $5 rebate to local Leagues for each nationally recruited member assigned to you. The amount of your League’s nationally recruited member rebate is deducted by the LWVUS and shown on your first invoice every July. THE MEMBERSHIP YEAR AND OPTIONS FOR MEMBERSHIP DUES
All League membership years are supposed to start on July 1. However, in order to give you time to chase after late-paying members, the LWVCT and LWVUS don’t lock in their rosters for any current year until the following January 31. After that, they set their budgets and figure out what they’ll have to ask in PMPs, which your League then pays starting on the next July 1.
The thing to remember, therefore, is that you don’t pay PMP on any first-time members until (at the earliest) July 1 of the year AFTER they’ve signed on. For new members recruited on or after February 1st, you don’t pay PMP until July 1 of the FOLLOWING year, i.e., a year and a half later.
This permits your League to do any or all of the following:
By reducing first-year dues and/or stretching out the period that they cover, you should make it easier to recruit new members who aren’t quite sure if the League is right for them, and to retain newer members who might otherwise resent having to pay full dues again less than a year after they’ve joined.
STARTING AN EDUCATION FUND ACCOUNT WITH THE LWVUS
The IRS defines all state and local Leagues as 501(c)(4) nonprofit organizations; donations to them are not tax-deductible. However, LWV education funds are 501(c)(3) non-profit organizations allowed to solicit contributions that are tax-deductible.
Some local Leagues have considered establishing education funds in order to attract support from donors who want to give tax-deductible contributions. However, the process of establishing a separate education fund, applying for 501(c)(3) recognition from the IRS, and maintaining the fund’s separate existence under both state law and federal regulation may prove more expensive (and time-consuming) than the results might justify.
To make it easier for local Leagues to get contributions, the League of Women Voters of the US makes its tax deduction available to all Leagues through the League of Women Voters Education Fund (LWVEF). It was established in 1957 as a separate, tax-exempt organization with 501(c)(3) tax status. This service allows local Leagues to obtain tax-deductible funding for educational projects while at the same time relieving Leagues of the administrative burdens connected with creating and maintaining their own education funds.
All of the forms for the
LWVUS’s state and local grants program are up on their website at This page is in the Treasurer’s “Toolbox” in the Tools for Leaders section of the For Members area of the website.
How to start an education fund account with LWVEF:
In order to use the grant service for funding, the projects must meet IRS and League criteria.
IRS Criteria:
1. The projects must be educational. The project must be completed for the purpose of informing the public in a fair and objective manner. The League cannot advocate a particular position on legislation or urge any action to affect legislation (federal, state, or local). The project cannot involve the development of a League position by consensus or other form of agreement nor can it promote a League position. The project cannot involve work with political parties or candidates for office (other than nonpartisan voter service activities such as candidate debates or voters’ guides). It cannot influence the outcome of an election.
2. The project must serve the general public, not League members exclusively.
3. The project cannot be conducted for the sole purpose of promoting or building League membership. The project’s resources cannot be used to support the membership recruitment or membership maintenance activities of the League. Therefore, internal membership materials do not qualify for funding.
LWVUS Criteria:
USING MONEY IN YOUR LWVUS ED FUND ACCOUNT TO PAY PART OF YOUR PMP
Your League may satisfy up to 50% of its current PMP obligation to the LWVUS through tax-deductible contributions to the League of Women Voters Education Fund. This can be done with (1) contributions made directly to the LWVEF for the purpose of paying the PMP; (2) unrestricted funds held in the LWVEF state/local grants accounts; and (3) unrestricted funds held in accounts managed by your local League education fund with the approval of your education fund board.
If your League decides to satisfy up to 50% of its current PMP obligation through tax-deductible contributions to the national education fund, please use the LWVUS’s form to withdraw funds from your League’s State and Local Grant account with the LWVEF, or to send check(s) for this purpose. Please make sure these checks are made payable to the LWVEF. Mail the check(s) and a copy of the invoice directly to the national office: League of Women Voters, 1730 M Street, Suite 1000, Washington, DC 20036. Do NOT use the envelope that the LWVUS sends with your League’s PMP invoice – that envelope is for checks to the LWVUS only.
If your League would like to satisfy more than 50% of its PMP obligation through tax-deductible contributions, please send a simple request letter or e-mail to membership@lwv.org at the LWVUS.
WHY THE LWVCT ED FUND DOESN’T DO LOCAL ACCOUNTS
A few local Leagues used to have small subaccounts in the LWVCT Education Fund. The LWVCT has had to stop providing this service because it does not have the staff to keep adequate track of the separate subaccounts.
USING RESTRICTED FUNDS
If your League has been given money under limiting conditions, those restrictions must be honored unless you can get the donor to waive the conditions. The need to honor restrictions is particularly acute when the money has been willed to your League, because if you break the terms in a Will, and if the donor’s surviving family members find out, they can sue you to get the money for themselves, and you will have to pay it back even if you’ve already spent it.
Neither the LWVUS nor the LWVCT is equipped to keep track of such restrictions for you. It is therefore your treasurer’s and president’s responsibility to make sure that your League keeps and transmits to incoming officers all records of any conditional or restricted donations. IRS ANNUAL ELECTRONIC FILING REQUIREMENT (Form 990-N “e-Postcard”)
Leagues whose gross receipts are normally less than $25,000 are required to submit Form 990-N, also known as the e-Postcard, every year. The form must be completed and filed electronically; there is no paper form. (The Pension Protection Act of 2006 added this filing requirement to ensure that the IRS and potential donors have current information about your organization. Any League lucky enough to have annual gross receipts that are normally greater than $25,000 must file Form 990 or Form 990-EZ)
Due Date of the e-Postcard The e-Postcard is due every year by the 15th day of the 5th month after the close of your tax year. You cannot file the e-Postcard until after your tax year ends.
How To File Go to the IRS website and type 990-N into the search box. The site will take you to the correct link.
Information You Will Need To File the e-Postcard
Late Filing or Failure To File the e-Postcard If you do not file your e-Postcard on time, the IRS will send you a reminder notice but you will not be assessed a penalty for late filing the e-Postcard. However, an organization that fails to file required e-Postcards (or information returns – Forms 990 or 990-EZ) for three consecutive years will automatically lose its tax-exempt status. The revocation of the organization’s tax-exempt status will not take place until the filing due date of the third year.
SAMPLE GIFT DONATION and RECEIPT
[On behalf of myself and my family,] I, ________________________, hereby give [$____________] [my entire collection of ______________________________________________________________________________ ]to the League of Women Voters of ____________________________.
I give this [money][collection][item] subject to the following stipulations: _____________________________________________________________________________________________________ _____________________________________________________________________________________________________ _____________________________________________________________________________________________________
Signed:
________________________________________________ (print name) _____________________________________ Donor
__________________________ Date
On behalf of the LWVCT of ____________________ I hereby accept the above-referenced [funds][collection][item][, subject to the stipulations listed herein].
For the LWVCT of _____________________: Signed:
________________________________________________ (print name) _____________________________________ Title: __________________________________________ Duly authorized
__________________________ Date |
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