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Chapter Leader Training WeekFinance Track
Facilitated by Stuart Taylor and MaryAnne Bobrow,
CAE, CMP, CMMApril 28, 2009
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Speakers:
Stuart Taylor – MPI Chapter Business Manager
MaryAnne Bobrow – Bobrow & AssociatesMember, MPI ICLC
Elaine Altman – Controller, MPI
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Webinar Objectives
• Review MPI’s Vision and Mission• Minimum Standards• Review Chapter Metric – Chapter Financial
Management• Review the resources available
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MPI Vision
Build a rich global meeting industry community
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MPI Mission
Make our members successful by building human connections to:
• Knowledge/Ideas• Relationships• Marketplaces
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EVOLVE to a global community
RE-IMAGINE our business relationship with chapters
ELEVATE the member conversation and experience
BUILD a great organization
Strategic Imperatives
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• It will make our members, you and our chapters more successful
• You will become advocates of our Vision/Mission
• This, in turn, will increase member involvement in MPI
Why is this important to know?
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2009-2010
Chapter Metrics
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Chapter Metrics Dashboard
1. Engagement/Participationa) Gauges member participation and involvement in chapter activities
b) Allows for chapters to track event/volunteer success
2. Chapter Membership Satisfactiona) Assessment of overall member satisfaction with chapter
b) Allows for chapters to gauge member satisfaction in 3 areas; Network, Education and Marketplace
3. Net Member Growtha) Measures chapter member growth and rebates
b) Allows for chapters to track their member growth patterns
4. Chapter Financial Managementa) Calculates financial management not budgeting skills
b) Allows for chapter the freedom to manage finances and track educational expenses
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Chapter Financial Management
• Gross Margin– Total Revenue less Total Expenses divided by Total
Revenue– Allows for financial management liberty
Note:– Needs to note if in-kind contributions are included– Should Exclude Investment activities from calculations– Transfers into reserves, if any, need to be noted
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Chapter Financial Management (Example)
Revenue
Educational $ 7,624
Fundraiser $ 3,710
Membership Dues $ 5,379
Total $ 16,713
Expenses
Board Retreat $ 4,948
Community Outreach $ 1,030
Donations $ 1,120
Educational $ 8,091
Total $ 15,189
• Gross Margin*
(16,713 – 15,189) =1,524
1,524 / 16,713 = 9.11%
• Educational Investment Ratio
8,091/16,713 = 48.41%
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*Gross MarginTotal Revenue less Total Expenses divided by Total Revenue
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Membership Rebate Practice
• Membership Rebates* – 11.4% (Clubs)– 18.0% (US & Canada) – 23.0% (EU)
• Yearly Full Member Rate = $325 USD– Chapter Rebate = $58.50 USD
• Increase in installment plans this year– Quarterly = 4 x $81.25 = 4 x $14.63– Monthly = 12 x $27.08 = 12 x $ 4.86
*exceptions exist.
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What We Need From You
There are several things we need from each chapter.
• Active Participation• Fiscal Responsibility/Oversight• Making the Chapters more Successful
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CBM as your Partner
• CBM’s are your partners to assist to make your chapter successful.
• We need on a monthly basis:– Chapter financial statement
• Revenue, Expense, Educational Investment
• Identifying investments and reserves if included in Revenues
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Role of Finance
• Chapter Success
• Review– Accounting & Banking Procedures– Financial Reporting– Budgeting– Tax Issues– Fiduciary Responsibilities – Insurance Issues– Reserves & Investments
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Financial Review
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Roles & Responsibilities
• Accounting & Banking Procedures• Financial Reporting• Budgeting• Tax Issues• Fiduciary Responsibilities • Insurance Issues• Reserves & Investments
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What Are Association Reserves?
• Defined:– Money held back for future use or specific
purpose– Net assets minus net liabilities– This is a surplus or rainy day fund for the
association– Reserves are usually protected by the board– Should be equivalent to one year’s worth of
operating cash.
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Control Guidelines
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What You Need To Know
• Control: (U.S. & Canada)– Requirements
• 2 Signatures on All Checks or Wires• Bank Reconciliations Performed by
Other Than Cash Handler(s)• Annual Financial Reports Reviewed
by “Disinterested Party”
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Accounting Practice: Segregation of Duties
There are 4 aspects involved in any financial transaction
1. Check request
2. Authorization
3. Custody of checkbook
4. Recording the transaction
No one person should control all 4 aspects.
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What You Need To Know
Insurance –
Coverage and Costs
Company: Sleeper Sewell
Contact: Julia Ladiner
(P) 972-419-7539
(F) 972-419-7555
Email: [email protected]
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Domestic Insurance Covers:• Directors & Officers Liability (D&O)
– $3 Million Aggregate Max.• Employment Practices Liability
– $3 Million Aggregate Max.• Kidnap and Ransom
– $1 Million Aggregate Max.• Domestic Package
– General Liability ($1 Million each Occurrence)• Umbrella
– $10 Million max. above and beyond General and Commercial Automobile, Employer’s Liability, Employees Benefits Liability, Foreign Package General Liability and Commercial Liability coverage’s.
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Foreign Insurance Covers:
• Directors & Officers Liability (D&O)– $3 Million Aggregate Max.
• Employment Practices Liability – $3 Million Aggregate Max.
• Kidnap and Ransom– $1 Million Aggregate Max.
• Foreign Package – General Liability ($1 Million each
Occurrence)
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What You Need To Know
Accounting & Banking Procedures
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What You Need To Know
• Accounting & Banking– Cash Receipts & Disbursements
• Invoices• Check Requests with Signatures• Account Codes• Authorization / Purchase Orders
– Bank Reconciliation• Timeliness• Highlight Discrepancies IMMEDIATELY!
– Checks & Balances• Dual signatures on checks
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What You Need To Know
Financial Reporting
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Timelines
– Lack of Timely Financials Creates Risk– Require Financials within 10 days after
month end(send courtesy copy to CBM at the same time)
– Forecasting
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What You Need To Know• Reporting
– Statement of Financial Position (Balance Sheet)
– Statement of Activity (Income Statement, P&L)• Variance (Actual vs. Budget)
– Audit Statement– Frequency (Monthly, Annually)
• Board Meetings (incl. bank reconciliation)
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Statement Review
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Key Terms and Concepts
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Financial Statements-Corporate
• Balance Sheet
• Income Statement (or Profit and Loss Statement)
Financial Statements-Associations
• Statement of Financial Position
• Statement of Activities
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Key Terms and Concepts
• Balance Sheet or Statement of Financial Position
– A picture of the organization at a given point in time. It reflects the assets owned, liabilities owed, and residual net assets.
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Key Terms and Concepts
• Profit/Loss Statement or Statement of Activities
– Shows financial activity, reporting revenue generated, expenses incurred, and results in net profit/loss
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Key Terms and Concepts
• Accrual versus Cash Accounting– Accrual-basis accounting recognizes
revenue when earned and expenses when incurred.
– Cash-basis accounting recognizes revenue when payment is received and expenses when cash is expended.
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What You Need To Know
Budgeting
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How does Finance make the Chapter more Successful?
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Chapter Strategic Plan
• Begins with Board Retreat • Developing Key Measures of Success• Since the financial statements give “pictures”
of the chapter’s financial health, the Finance Chair is the eyes and ears of the Chapter
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Budget Process
• Budget falls out from monetizing success measures.
• Internal Goals can be different then Budget Goals
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What You Need To Know
• Budgeting– Integrated with the Business Plan– Start w/Zero, Not Prior Year– Eliminate/retire outdated activities– Understand Cash Flow Impact of
Budget– Recognize Cash Sponsorship as
Revenue– Understand the impact of In-Kind
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Revenue Generation
• Non-Dues Revenue– Advertising– Educational/Networking Programs– Trade Shows– Auctions, Raffles
• Sponsorships/Partnerships• Fundraising & Special Events
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What You Need To Know
Tax Issues
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What You Need To Know• Taxes
– Forms (U.S. only)• 990-N(Revenue <= $25K)• 990-EZ(Revenue >$25K and < $100K)• 990(Revenue >= $100K)• 990-T(UBIT > $1,000)• Schedule A
– Forms (Outside USA)• Differs from country to country
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Minimum Standards
• October 1st – Year End Financial Statements due to Chapter Business Managers.
• A copy of Tax Returns for US chapters only submit to your Chapter Business Manager by October 1st.
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What You Need To Know
Investments
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What You Need To Know
• Investments– Level of Desired Risk (Asset Allocation)– Policy (Board-Approved)– Professional Management
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Tools & Resources• MPI Resources
– Chief Financial Officer – Greg Lohrentz• [email protected]
– Controller – Elaine Altman• [email protected]
– Insurance – http://www.sleepersewell.com
– Toolkits: http://www.mpiweb.org/CMS/mpiweb/mpicontent.aspx?id=8235
• Finance Section
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Tools & Resources • Your CBM
Use them – they are here to help you.
• Group Space
• MPI Foundation – http://www.mpifoundation.org
• The Chapter Toolkits on the WebCheck here first – don’t reinvent the wheel.
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Questions & Answers
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Thank you for your time!