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Back to School Information - Fall 2019

Please pay careful attention to the following information about chapter finances and information updates. It will be crucial for your success this coming year to completely understand and follow this information.

Members Area

Maintaining your chapter’s information in the Members Area directly affects the billing of Initiate Dues and Risk Management Assessment. Per The Law of Sigma Nu Fraternity, Inc., all chapters are to update their membership information (i.e., roster) by September 15th, or 15 days after the start of school, whichever is later. This update will ensure that the chapter is billed accurately. Both the Commander and Recorder can update the Chapter’s membership information on the Members Area.

For step-by-step instructions on updating the roster, review the officer resource How To Update the Roster in the Members Area.

Important Due Dates

As a friendly reminder, the first Conclave Fee installment of $625.00 and the signed Risk Reduction Affidavit are due to the General Fraternity by September 15th. For more important due dates, which the chapter needs to be familiar with, review the officer resource Important Due Dates. Take some time to look through this resource to ensure that the chapter is making payments and submissions on time.

**NOTE – For schools who have not yet begun the fall academic term by September 15th, the deadline to submit the Risk Reduction Affidavit is October 15th.

What You Can Expect to be Billed

Risk Management Assessment

Risk Management Assessments (RMA) provide collegiate chapters, house corporations, other related alumni entities, alumni volunteers, and the General Fraternity with general liability insurance and proactive and reactive operations to reduce risk.

At the 68th Grand Chapter in July 2018, it was anticipated that the RMA rate would need to increase over the course of the 2018-2020 biennium to meet the increasing cost of insurance. In its deliberations, the Grand Chapter reviewed the matter and determined the Fraternity was in a financial position to absorb approximately $230,000 of the expected increase, with the remainder to be reflected in the RMA rate over the two years of the 2018-2020 biennium.

In August 2018, we provided a preliminary indication of the expected RMA rate increase for the first year of the biennium, as we had not received full quotes for renewal of all insurance policies. At that time, an increase of $40 per man for the 2018-2019 year was anticipated. Based on a combination of the final quotes and manpower, the total increase for the 2018-2019 year ended up being $35 per man.

As we prepare for the 2019-2020 renewal, we again do not have final quotes for all insurance policies but have already seen significant increases in the cost of the general liability and primary umbrella policies and expect the same for the excess umbrella policy.

These cost increases are the result of an overall hardening in the insurance market and losses in the area of Fraternity insurance. Based on the Grand Chapter’s deliberations and reasonably positive claims cost experience, thus far, for the 2018-2019 year, some of the anticipated cost increase for 2019-2020 is expected to be absorbed.

Based on all information presently available, the preliminary indication of the RMA rate increase, necessary to cover insurance cost increases for the 2019-2020 year, is $35 per man. This indication is subject to change, based upon final renewal quotes. However, billings for the fall 2019 term will be based upon this indication. An update regarding the final RMA rate determination for the spring 2020 semester will be made in mid-fall.

To provide each chapter as much flexibility as possible, the RMA will be billed in four equal installments over the course of the 2019-2020 year (as it was for 2018-2019), as reflected in the chart below. Again, please note that the amounts noted in the chart below for spring 2020 term are estimates and subject to change. 

   Fall 2019 (Estimated, Subject to Change) Spring 2020
Tier Annual Total 10/1/2019 11/1/2019 2/15/2020 3/15/2020
1 $280.00  $70.00  $70.00  $70.00  $70.00
2 $330.00  $82.50  $82.50  $82.50  $82.50
3 $370.00  $92.50  $92.50  $92.50  $92.50
4 $390.00  $97.50  $97.50  $97.50  $97.50
5 $440.00  $110.00  $110.00  $110.00  $110.00

For your individual chapter’s RMA rates, please see the first page of the Monthly Statement under Schedule of Fees and Information Due.

Our goals continue to be to meet the insurance needs of the Fraternity at the lowest cost possible and, in this challenging insurance market, provide collegiate chapters as much information regarding anticipating costs as early as possible for planning and budgeting purposes. Please don’t hesitate to contact us with any question you may have. We appreciate your leadership of and service to Sigma Nu Fraternity.

Initiate Dues

Adding new members and removing departed members is the chapter’s responsibility. Participation in the Candidate Ceremony is the trigger by which an individual must is to be verified as a Candidate. Participation in the Initiation Ceremony is the trigger by which an individual must is to be verified as an Initiate. For Initiated members who have departed school, either by graduation or leaving for some other reason, are to be marked as either Alumni-Graduated or Alumni-Left School. Initiated members who are studying abroad for a semester should be marked as Alumni-Left School until their return.

It is important to remember that there is no such thing as “INACTIVE” or “EARLY ALUMNI” in Sigma Nu Fraternity. If a member is a matriculate of the host institution (i.e., enrolled at the college/university), then they are to be listed on the chapter’s roster.

Initiate Dues are $72.50 per initiate per semester.

Conclave Fee

The Conclave Fee pays for all convention-related costs for Grand Chapter and College of Chapters. The Conclave Fee for the fall 2018 term is $1,250.00 and is due in two installments of $625.00, due on September 15th and October 15th. The Conclave Fee for the spring 2019 term will be determined in the fall and communicated to chapters. It is due in two installments of $625.00, due on March 1st and April 1st.

Candidate Fees and Initiation Fees

All new candidates must register through the Members Area and be verified by the Commander or Recorder following their participation in the Candidate Ceremony. Each candidate must pay a one-time fee of $100.00 for the Candidate Fee, either online or directly to the chapter. This fee should be paid before the prospective member goes through the Candidate Ceremony.

Candidates being initiated must be verified by the Commander or Recorder following their participation in the Initiation Ceremony. The Initiation Fee is a one-time fee of $230.00 and can be paid either online or directly to the chapter. This fee should be paid prior to the candidate going through the Initiation Ceremony.

One of the main reasons chapters become financially delinquent with the General Fraternity is by not collecting, or confirming payment of, the Candidate and/or Initiation Fees prior to individuals going through the respective ceremony. Candidate and Initiation Fees collected by the chapter are to be remitted to the General Fraternity immediately following the ceremony.

How to Make Payments

There are two options you have when making payments to the General Fraternity Headquarters. The first option is by check, and the other option is by making the payment online.

If you choose to send in a check, it will need be made out to Sigma Nu Fraternity Inc., with a description of the payment on the memo line (e.g., Conclave 1st installment) or include the invoice stub. Payments by check should be mailed to:

Sigma Nu Fraternity, Inc.
P.O. Box 1869
Lexington, VA 24450

To make a payment online, via a debit/credit card, go to www.sigmanu.org/payhq. If you are making a payment online not pertaining to Candidate and Initiate Fees, you should select “Pay Other Fee(s)” and include the payment amount and instructions on how the payment should be applied.

Budgeting: Strategic Importance

Establishing a vision and goals is an important experience for all Sigma Nu chapters but is a futile exercise if there is no plan to achieve those goals. Establishing a realistic budget is a process by which a Chapter sets its plan to achieve its goals.

A simple five-step budgeting process has proven to be distinctively effective for collegiate chapters. This budgetary model is known as zero-based budgeting and is both efficient and effective for cash-based businesses like fraternity chapters. Essentially, this budgeting model calls for each budgetary cycle to begin at “zero” and is built according to the following steps.

  1. Officer Budget Requests – These are the functional expenses that the chapter controls. These expenses would include, but are not limited to: Recruitment, Alumni Relations, Brotherhood, Educational Programming, Social Programming, etc.
  2. Operational Expense Estimates – These expenses are those costs that the Chapter does NOT control but must be paid to ensure the chapter’s existence/recognition. These expenses include: Risk Management Assessment, Initiate Dues, Conclave Fee, IFC dues, etc.
  3. Revenue Estimates – Revenue means income paid by the chapter members (i.e. member dues). The simplest calculation to estimate a chapter’s revenue is: Total Expenses (Functional + Operational) divided by Initiates.
  4. Budgetary Adjustments – This step is a vital piece of the budgeting process. It is in this step that a chapter may reallocate financial resources from one functional area to another, either because of chapter priorities/goals or because the budget is showing a deficit. Deficit budgeting/spending is not an option available to cash businesses.
  5. Proposal to the Chapter – For each budgetary cycle, whether that is an academic term or academic/calendar year, it is important that the budget is put forward to the Chapter for discussion and approval. Members of the chapter pay dues and it is important that they are made aware of the Chapter’s plan for those funds.

Collections: Reminders to be Successful

Collection of chapter member dues is one of the more difficult aspects of a Treasurer’s and Finance Committee’s role. That said, it is vital to the health and stability of a collegiate chapter that members are held accountable to their financial obligations. To that end, the following are important policies and best practices to assist in the effort of collections.

Important Policies You NEED to Know

Zero Tolerance Enforcement Policy of the High Council - If a chapter fails to meet its financial and reporting obligations to the General Fraternity within 30 days of such obligations being due, that chapter’s operations will be suspended until such obligations are met in full. If such delinquency continues for 90 days, the High Council will consider the suspension or revocation of that chapter’s charter.

Check Signing - Use of dual signature checks to ensure no one person has complete access to the chapter funds. Per The Law of Sigma Nu Fraternity, Inc. (Article Seven, Sections 5.2F and 5.5F), the Treasurer may not sign checks. Checks are to be signed by the Commander and Recorder, while the Treasurer maintains the checkbook.

Late Reporting Policy of the High Council - Chapters shall report all new Candidates and Initiates, along with all required information, on the Members Area of the General Fraternity’s website within three (3) days of the Ritual Ceremony. The chapter will be assessed a $5.00 late fee per new Candidate or Initiate, per day, beyond the three (3) day reporting grace period. Candidate and Initiation Fees not paid within thirty (30) days from the report date will be assessed a finance charge at an annual rate of 18% (1.5% per month).

Treasurer’s Report to the Chapter - The Treasurer must have a substantive report to the Chapter at each business meeting. While this report does not have to be long in duration, the members must be fully informed on the financial activity of the Chapter. The following is a suggested format for the Treasurer’s report:

  1. Report the Chapter’s expenses and revenues from the previous week.
  2. Report the Chapter’s available Cash on Hand.
  3. Report the Chapter’s expected expenses and revenues for the upcoming week.
  4. Report the Chapter’s Budget to Actual for year/term to date.
  5. Report on collection matters, as appropriate.

Taxes – Filing the 990

The Internal Revenue Code of the United States most commonly associated with the collegiate, fraternity/sorority community is the 501(c)(7) classification – social and recreational clubs. This classification, 501(c)(7), establishes that these organizations are exempt from paying federal income taxes and all 501(c)(7) organizations are required to file an annual return to maintain this tax-exempt status.

The form to be filed annually, for 501(c)(7) organizations, is the Form 990. There are three versions of Form 990, and established thresholds that determine which version a 501(c)(7) organization must use based on its gross receipts. For additional information, review the officer resource Federal Tax and Form 990 Filing Guide.

Other Links to Useful Resources

Below are links to additional resources that will likely prove helpful to you and your chapter.

If you have any questions, please contact Joe H. Thomas, Financial Consultant at (540) 600-3006 or via email at joe.thomas@sigmanu.org

© 2015-2019 Sigma Nu Fraternity, Inc.
9 North Lewis Street, P.O. Box 1869, Lexington, Virginia 24450
Phone: 540.463.1869 | Fax: 540.463.1669 | Email: headquarters@sigmanu.org

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