Good Business Practices for NSPRA Chapters

Chapters of the National School Public Relations Association vary in size from one dozen to several hundred members. Some are newly formed; others have existed for decades. Because of these variables, there is no “one way” for a chapter to conduct its business functions. But there are some general principles that it is wise to follow, and these may be helpful to new chapters or inexperienced chapter officers.

NSPRA chapters are not-for-profit units of the National School Public Relations Association - a 501(c)(3) exempt organization - and are part of a group exemption issued by the Internal Revenue Service. This means that chapter earnings are exempt from federal and state income taxes (if any) and, depending on state laws, the chapter may not have to pay state sales tax on its purchases. To remain a chapter in good standing both with NSPRA and the IRS, chapters must:

  • Follow NSPRA policies 260.1, 260.2 and 260.3 (PDF). The policies are explained during the Leaders' Meeting held on Sunday morning of the NSPRA National Seminar. Requirements include submitting an annual chapter cash flow report (PDF) by October 31 each year.
  • Have a fiscal year the same as NSPRA’s, September 1 through August 31.
  • Have an Employer Identification Number (EIN) issued by the IRS, even through most chapters don’t have any employees. NSPRA obtains an EIN for each chapter when it is chartered. The major use of the EIN is to identify chapter bank accounts and securities.

Chapter funds should be kept in a chapter bank account. If possible, select a bank that has branches throughout the chapter area so that, regardless of who the chapter treasurer may be, the bank account can continue. Use the chapter’s EIN for identification of checking and savings accounts, certificates of deposit, etc. Some banks pay interest on balances or waive fees for non-profit organizations. Deposit any funds the chapter receives (membership dues, program fees) as quickly as possible (within one week). Although most people are totally honest, it’s a good business practice to require two signatures on chapter checks written for over a certain amount ($100 or $500).

Plan your chapter year and budget. Soon after new chapter officers are elected, they should meet to plan chapter activities for the next year (see the Strategic Planning Guide). As part of the strategic planning process, you must consider income and expenses. That means a budget. To create a budget:

  • Estimate sources of chapter income: membership dues, program registration fees, contest fees, etc.
  • Estimate chapter expenses: printing, postage, facility rentals, meals, bank charges, etc.
  • Tailor expenses to realistic estimates of income. The chapter will not be able to exist if it regularly spends more than it takes in – unless it has a large bank balance that chapter officers agree they will reduce to cover deficit spending.

Keep good financial records. A chapter treasurer should deposit funds promptly and save all deposit slips, noting the sources of funds. No checks should be written without a record of the expenditure (bills from hotels, printers, post office receipts for stamps, etc.). Keep a record of all income and expenditures, either by hand or on a computer spreadsheet.

Give a treasurer’s report at each chapter meeting. The chapter treasurer should prepare and distribute a financial report at each chapter meeting, showing the receipts and expenses since the last report, or for the year-to-date. There should be opportunities for members to ask any questions they may have about the financial report.

Have the chapter books audited each year. The chapter’s fiscal year ends August 31. The treasurer should complete the bookkeeping and submit the financial records for an audit.  This audit is as much for the treasurer’s protection as the members’, and it could be done by another officer or member of the chapter or by an experienced accountant. The treasurer’s records should be turned over to the auditor with the books, bank statements, deposits and canceled checks (if the bank returns them).

Keep a portfolio of important financial documents. In most chapters, officers change each year. This gives more people leadership opportunities, but it also may make recordkeeping difficult. The treasurer should establish a portfolio of important records (checkbooks and deposit slips, bank account numbers, EIN and other records from the Internal Revenue Service, annual chapter cash flow reports) and pass them on to their successor.

Ask for advice. For some people, being chapter treasurer is “no sweat.” For others, it’s a whole new world.  If you’re in the latter category and need advice, ask – a knowledgeable predecessor, the treasurer of a nearby chapter or the NSPRA office (301-519-0496).  It’s a lot easier to ask early on than to be faced with a mess at the end of the year.