A fraternity chapter’s finances are central to almost all activities brothers may engage in during the semester, so it is crucial that finances are maximized and well-managed. A fraternity’s budget will vary greatly from chapter to chapter, often reaching upwards of tens of thousands of dollars, and is based on a variety of factors including chapter size and the charitable giving of alumni. A budget will also have to factor in whatever fees and expenses a chapter owes to the university and fraternity officials. The budget is maintained by a system of regulations and duties performed by the chapter as a whole, but primarily through the office of the fraternity chapter treasurer.
Among other tasks, the fraternity chapter treasurer oversees the budget, the collection of membership dues and keeping the chapter, nationals and university apprised of important financial matters. The treasurer may have additional duties that vary depending on the chapter, though the general concept of the job is the same throughout North American fraternity chapters. The treasurer may be assisted by the chapter president and other officers, the finance committee, the university's fraternal leadership, housing corporation members and national advisors. In addition to membership dues, a fraternity chapter’s finances may include small-scale fundraising campaigns for activities such as philanthropy efforts, and large-scale fundraising activities like garnering alumni donations for chapter house renovations.
Whatever a chapter’s goals and activities each semester, brothers rely on fraternity finances: a financially independent ecosystem within the chapter where membership dues comprise a majority of a budget drawn up and managed by the chapter and its treasurer. Additional costs, fees and alumni donations must also be managed.
When it comes to fraternity finances, there’s a lot to take in at first glance. That’s why OmegaFi wants to simplify things by providing you with some fast facts about fraternity finance.
Budgeting and financial management are some of the most difficult parts of managing a fraternity chapter. There is a lot of room for mistakes. There are many factors to consider, such as national and IFC dues, housing costs and property maintenance, recruitment, socials and rituals, insurance, conference costs, meal plan vendor fees, administrative costs, associate member education and scholarships, intramurals, fundraising and alumni engagement, among other costs. Under-budgeting may lead to deficits and a need to cut or scale down certain chapter operations. Meanwhile, over-budgeting may lead to push-back from brothers for steep membership dues.
Whether a chapter’s finances fall short or savings are accrued, the national organization likely can guide that chapter based on their discretion and particular regulations. However, using smart fraternity financial software such as OmegaFi’s Billing and Payments solution to facilitate budgeting and fraternity finance management may vastly help a fraternity treasurer. Financial software can help centralize a fraternity chapter’s budget in an online environment and allow transparent access to brothers, parents, alumni, national advisors and any other relevant parties at the click of a button. This software also helps manage banking transactions and can give a fraternity access to financial experts, allowing the treasurer to navigate budgeting and financial management like a pro.
Budgeting for a fraternity chapter is an ongoing process of adjustments and behaves similarly to a small business budget. The budget is initially drawn up by the treasurer according to a set of chapter regulations and guidelines. For instance, budgeting fraternity finances for the semester or year will also determine the amount of membership dues each brother must pay, and there are other factors to consider with membership dues. For example, brothers on a payment plan may receive a discount for paying early. Otherwise they may be likely to fall behind on payments. Also, some brothers may pay different amounts based on whether they are new members with initiation and other fees. Once the budget is finalized, it will constantly be reassessed according to expenditures, deficits and savings throughout the semester.
Luckily, fraternity finances are not a one-man operation. A budget must be approved by the chapter and must meet the needs of the housing corporation and advisors from the national organization, who also play an important role. Ideally, the chapter will have in place a step-by-step system for the budget process that will ease the management of funds each semester. The treasurer maintains a paper trail with regards to fraternity finances. This keeps the budget and dues collection process transparent, so that all delinquent dues amounts, changes in the budget and approved reimbursement amounts, alumni donation amounts and so forth are understood by officers, brothers and the fraternity as a whole.
Fundraising is a crucial component of fraternity finances and can produce widely different outcomes based on whether campaigns are handled well or poorly. Based on the scale of the fundraising goal, the approach will be vastly different, though it will rely on generally the same principles. Alumni engagement and the visibility of a chapter’s fundraising efforts (through social media, general web presence, newsletters and engagement, et cetera) are often crucial components of a campaign.
A chapter can manage this aspect of fraternity finances as part of its autonomous day-to-day operations. Although, particularly for large-scale fundraising projects such as expensive house renovations, it may be preferable for a chapter to take advantage of the advice offered by fundraising experts such as Pennington & Company. Fundraising specialists can help a chapter understand how to set and achieve goals by providing feasibility studies, guidance on marketing and communications, capital campaign development, alumni donations, gift management and strategic assessments.
If a chapter thinks of its fraternity finances as its lifeblood, the chapter itself must act as the heart, constantly regulating and managing its budget, membership dues, alumni donations and overall financial outlooks. While the influx of membership dues and alumni donations gives the chapter life, it will not survive long if these are mismanaged.
At OmegaFi, we know how challenging and important chapter finances are, and we’d love to help make it easier on you. Get a no-pressure demo today!
