Business Matters 2013 Club Leader Workshop Jerry Sigler

1. Business Matters2013 Club Leader WorkshopJerry Sigler

2. Agenda • Club Operations • Tax-exempt Status • Insurance Considerations • Sales Tax Exemptions • Raffles • Sponsorships

3. Club Operations • Bank Accounts • Keep operating funds and scholarship funds separate • Reporting to Club Members • Expectation is that club board meets regularly, i.e., a minimum of four meetings per year • Annual budget approved by board • Treasurer’s report (in writing) at every meeting • Minutes prepared for every meeting • Reporting to AAUM • In order to account for the utilization of our tax-exempt funds, the Alumni Association requires a general accounting of how each club utilized the funds it received from AAUM.

4. Club Operations • Why have Bylaws? • Bylaws –provides the basic rules for the conduct of the club’s business and affairs • Provides clubs with a road map for conducting business • Conveys to volunteers what their responsibilities are and the length of their terms • Legitimizes that volunteers are working in an official capacity for the club (for insurance and other purposes) • AAUM has developed a set of model bylaws

5. Tax-exempt Status • Recognized clubs benefit from AAUM’s tax-exempt status, but are not themselves 501(c)(3) – cannot separately accept tax deductible contributions • Clubs are not encouraged to apply for own tax-exempt status (some have been turned down; if approved, record-keeping and reporting is onerous and some have lost exempt status due to failure to submit reports) • Cannot participate in or contribute to political campaign activities or attempt to influence the outcome of an election

6. Insurance Considerations • U-M Insurance Coverage ends June 30, 2013 • AAUM working with non-profit insurance consultant to obtain new coverage by July 1st • Make NO assumptions about coverage after June 30 • AAUM will communicate with all clubs as soon as coverage issues are resolved

7. Insurance Considerations-Events • AAUM’s insurance extends to official activities of AAUM’s recognized clubs • Events requiring “proof of insurance” – contact Regional Relations staff, allow sufficient time for Insurance broker to review contract • Co-sponsored events – depends on documented level of U-M club’s involvement • Get participants to sign Liability Waiver for strenuous or risky activities

8. Insurance Considerations-Individuals • Coverage for club officers and directors, while acting within the scope of their duties • Alumni volunteers are covered—but only to extent they are acting within the scope of their duties, so board minutes or other documents should define • Does not cover losses from bank accounts not controlled by U-M (e.g., club checking accounts or separate scholarship accounts) • Alcohol liability—always have it served by licensed bartenders, NEVER AT YOUR HOUSE!

9. Sales Tax Exemption • Sales tax exemptions varies from state to state • Many (like Michigan) accept proof of Association’s Federal tax-exempt status…but others (like Illinois, California, Florida and New York) do not • Do not assume – verify with a local expert

10. Raffles • Alumni must not be led to believe that the cost of raffle ticket is tax-deductible.  • The purchaser has received something of value in return: the opportunity to win a prize (regardless of whether he/she actually wins.)  Thus, the cost of the ticket is not tax-deductible. • Postal regulations prohibit the sale and delivery of raffle tickets via US Mail. • State of Michigan requires a license for each raffle, there are specific requirements and the state is very strict about compliance

11. Raffles-continued • Clubs must maintain detailed financial records of all activity and submit a financial report at the end of the raffle. • An unauthorized or improperly administered raffle could affect the ability of other U of M clubs (and AAUM) to obtain a license in the future, so please contact the Regional Relations staff prior to preparing to conduct a raffle. • Outside of Michigan—please a consult with local expert

12. Sponsorship • Sponsors are a reflection on AAUM’s and Club’s Brand • While the revenue might be appealing, we are selective in considering who we are willing to be aligned with—at both national and local level • Sponsorship arrangements: • Specify in writing what the benefits are to the sponsor, i.e., mention on club’s website, an information table at the event, an opportunity to give a commercial pitch at the event, etc. • Specify in writing what the costs are to the sponsor…when and how will the sponsor pay you? • Cannot give alumni contact information to sponsors

13. Sponsorship-continued • Prohibited from securing sponsorships from the following companies that have exclusive partnerships with the Alumni Association • Banking services: checking, savings, money market, credit card, line of credit, etc. (Bank of America) • Insurance (Liberty Mutual, Marsh) • Merchandise sales (M-Den) • Moving/relocation company (Stevens Worldwide) • Test preparation (Kaplan) • Specific questions, contact Dave Richmond, Sr. Manager, Advertising and Sponsorship at 734.763.9734 or davrichm@umich.edu

14. Questions?