Association Finances

As local associations merge into the state chapter, there are key financial provisions the state leadership and local affiliate team need to be aware of and implement. When followed, these will ensure a smooth transition and mindfulness of the new roles that chapters and affiliates will play.

 

Mergers
  • Prior to the dissolution or merger of locals, local association liabilities should be satisfied to the extent that there are assets available to do so. In the case of any remaining liabilities, the state chapter should be apprised of the situation.
  • Local association investments should be transferred in-kind to the state chapter investment portfolio. In the case where a local’s investments do not fit into the state investment strategy, the local association should liquidate their investments prior to dissolution or merger and transfer the proceeds to the state.
  • When a local association’s accounts are closed, any reasonable method to transfer funds to the state chapter may be used, such as cashier’s check, wire transfer or regular check.

 

Remaining Local Affiliate Funds
  • Locals that transfer funds to the state chapter may either request that monies be utilized by the state chapter across the full state association; or ask that the funds be earmarked for use exclusively in the local affiliate. If the local affiliate requests that the funds be directed for local use, the funds should be utilized in accordance with the NAIFA mission in that local area.
  • State chapters should earmark local association funds for activities in the local area that are consistent with the purpose for which the local raised or maintained the funds. Each state chapter can decide how best to earmark local funds. Three ways to accomplish this are to physically segregate the funds in separate accounts, track the funds through accounting software, or transfer the check writing and ownership of existing local account to the state.

 

Funding Future Local Affiliate Activity
  • All funds raised or received in a state after January 1, 2019, will go to the state chapter account. This includes dues as well as funds generated from local area activities, which will be paid directly to the state chapter. Payments to vendors for local area activities will be made by the state chapter. Some examples of how this can be handled are via check, wire transfer, credit card, or digital payment.
  • State chapters boards will develop a budget with local affiliate input that includes programming in all local affiliate areas. The budget should include both the expenses from the local meetings and sponsorship income. During the transition, it will be key to review the locals event budgets from past years to accurately project and forecast both revenue and expenses.

 

Foundations
  • Funds held in a local association charitable foundation should be transferred to the state chapter’s foundation and earmarked for their intended purpose. In the absence of a state foundation, the local foundation should be transferred to the state.

Suggested Budget Allocations
The following charts are suggested allocations based on the American Society of Association Executives (ASAE) operating ratio report and based on actual budgets of NAIFA state and local associations.

State Revenue by Type
State Expense by Type
Local Revenue by  Type
Local Expense by Type

Model State Chapter Budget
Model Local Chapter Budget