Financial Issues

 Print

FINANCIAL ISSUES

A successful chapter will operate in the same fashion as your client. In other words, like a business. This is especially true with regards to the financial aspect of the chapter. Chapters are expected to provide educational programs and social networking opportunities for local members. The expenses for these services must be properly accounted for and summarized once a year in a financial report to the ACC Headquarters.

Chapters may earn revenue from a number of sources, including rebates from ACC, program registration fees, grants, and sponsorships. Similar to chapter expenses, chapter income should be well monitored, properly accounted for and used to the advantage of chapter members. Overseeing these financial issues is the responsibility of the chapter treasurer, however the president and Board should be completely informed on all aspects of the chapter’s financial standings. The following is a discussion of the financial responsibilities of the chapter and the chapter treasurer.

• ACC Requirements for Chapters: Financial & Legal
• ACC Financial Portal
• ACC Financial Policies Overview (2023 Treasurer Call Slide Deck)
• Chapter Grant Policy FY24 (2024 Submissions Closed)

CHAPTER BUDGET

A well-constructed annual operating budget serves as the chapter's instrument for evaluating success. Additionally, it functions as the chapter's annual work plan, providing guidance for decisions throughout the year. This budget enables the chapter not only to assess its ongoing operations against expectations but also to compare the current year's performance with that of previous years.

To create a meaningful and realistic budget, each chapter officer with authority to spend/obligate funds should be asked to submit a budget proposal to the treasurer approximately 3-5 months prior to the start of the fiscal year. Ideally, written notes that detail the projected income/expense will accompany each budget request. The treasurer will review each request for reasonableness and will ensure it is consistent with the chapter’s mission and/or strategic goals. One way to test for reasonableness is to look at actual results from prior years, which can be done through the online chapter financial reporting system. Furthermore, the treasurer will balance the expense requests against the projected income. Often expenses will exceed your income, necessitating some prioritization of activities and expenses.

After establishing a preliminary budget before the fiscal year commences on October 1, the treasurer should present the balanced budget to the Board for approval. Upon approval, integrate the budget into the financial statement cycle, utilizing it as a guide to ensure proposed activities align with the chapter's work plan. As part of the chapter's annual obligations, the treasurer must submit the approved budget, along with the annual financial report (due in November), to ACC Headquarters via the Financial Reporting Portal.

ANNUAL CHAPTER FINANCIAL REPORT

Each year in November all chapters are required to submit their Chapter Financial Report through the Financial Reporting Portal. It is critical that all chapters complete the report. The HQ office files ACC's federal tax returns on behalf of the entire association. This is impossible to do without every Chapter’s cooperation and information. A Chapter’s failure to file a complete and timely financial report may subject the association to IRS penalties and interest as well as additional accountant fees. Quarterly rebates will be withheld from any chapter who fails to submit proper and accurate financial information.

FY23 Financial Reporting Overview

RESERVES

According to ACC's policy, chapters are advised to keep reserves equivalent to 3-6 months of operating expenses. For chapters exceeding 6-9 months in reserves, it is recommended to allocate resources to enhance programming, activities for ACC members, and increase the chapter's visibility in the local community. Chapters with reserves surpassing nine (9) months of operating funds may experience an impact on their rebates, and the financial reporting process now mandates a written explanation.

It's important to recognize that reserve levels can influence how both members and ACC Headquarters view the chapter's fiscal responsibility and management. For instance, members may be reluctant to endorse a dues increase if their chapter fails to meet current member needs, lacks concrete plans to invest funds in future member services, or is simply holding excessive reserves. To avoid such situations, chapters should channel surplus funds (beyond the suggested 6-month reserve threshold) towards improving chapter services. Specific recommendations for utilizing excess income are outlined below.

• Fund one or more chapter board representatives to attend the ACC Leadership Development Institute (chapter leader training) sessions in the spring and fall.
• Provide your chapter administrator with training related to their duties – technical, event management, business writing, membership development, etc., and support their participation in ACC Admin Training Day, a dedicated annual 1-day event in October to exchange ideas and learn from peers.
• Contract a professional bookkeeper to relieve either the volunteer treasurer or paid administrator of this day-to-day responsibility. This will increase overall financial controls by segregating duties, however the treasurer should continue to provide oversight.
• Hire an event management company for large chapter events, to relieve volunteers of the day-to-day operations.
• Hire a PR firm to assist with marketing your chapter to your local legal community.
• Hire a professional photographer for higher profile events.
• Conduct local member recruitment campaigns and/or drives. For advice and direction on hosting a local incentive campaign, email chapters@acc.com.
• Fund a unique program without sponsor involvement (a CLO networking event, social event, etc.)
• Purchase chapter letterhead and business cards.
• Hire experts such as executive coaches, resume writing experts, etc. to assist members in transition and members who are interesting in moving to the next level.
• Work with StreetLaw Inc. on a Diversity Pipeline Project.
• Fund unique speakers for one or more of your events.
• Fund an internship program or scholarship program for law students.

RESERVE LIMITS

Chapters often wonder if the IRS places limits on the reserves a chapter is allowed to hold. In fact, the IRS does not focus on a tax-exempt organization reserves, as long as the use of the reserves is to ultimately carry out the objectives the organization was granted tax-exempt status and there is not a gross excess of funds not being spent on chapter services. (A large reserve fund may be justified, for example, if the chapter plans to set up a scholarship program, produce a directory, or host a large annual event). Note, however, reserves which remain at levels higher than the recommended 6-9 months operating expenses, could cause undue scrutiny by the IRS. Chapters should therefore endeavor to continually use excess funds to enhance chapters services and operations.

Return to Top

ACCOUNTING SYSTEM

All chapters should operate on a cash basis. This means income and expenses are recognized when they occur (receipt of a check or payment of a bill), as opposed to when they are due. ACC recommends your chapter’s accounting system be as simple as possible yet still meet the annual ACC Headquarters reporting requirements. If, however, the chapter wishes to maintain a more detailed, accrual accounting system, you may do so as long as you submit your annual on a cash basis.

As demonstrated in the attached copy of the annual Chapter Financial Report, ACC Headquarters requires the distribution of income and expenses between logical and common categories. Each Chapter should be able to produce a standard Profit and Loss Statement and Balance Sheet quarterly, if not monthly.

Another consideration when selecting and designing an accounting system is that it should be easily transferable at the end of a treasurer's term. This means a system that is straightforward, well documented, and not overly complicated. QuickBooks is common software that meets these criteria and now offers a hosted online version that is ideal for a treasurer’s remote supervision of accounts.

INTERNAL CONTROLS

After an accounting system is established, it is important for the chapter to adopt a set of accounting procedures that incorporates strong internal controls. Good internal controls limit opportunities for fraud and ensures adherence to sound accounting principles. The foundation of internal controls is the separation of duties among staff. This is virtually impossible for ACC chapters given they often employ only a single administrator. With this reality, it is important for the treasurer to become actively involved to ensure proper management of chapter funds. If the treasurer acts as the bookkeeper, then another officer should assume the oversight role suggested here for the treasurer. Chapters can form committees to assist the Board Treasurer with the chapter's finances and related controls. Volunteers with audit, finance, and/or accounting experience is preferred. What follows is a brief review of key areas of internal controls. Sample of Committee Volunteer Assistance.

CASH, CREDIT CARDS AND INVESTMENTS

CASH

1. To reduce loss of funds, minimize all cash transactions.
2. Use an online event registration system that accepts credit card payments, for all programs.
3. If cash is received, issue a cash receipt for all transactions.

BANK DEPOSITS

4. Endorse checks “For deposit only” upon receipt and require the deposit of all inbound checks be made to the bank every two weeks.

PETTY CASH

5. Allow administrator to keep a petty cash fund (approximately $250) in a locked bank box to pay for small, non-reoccurring expenses such as taxis, office supplies, etc.
6. Reimbursement is made as needed with check payable to administrator.

WIRE TRANSFERS

7. Allow only the treasurer the right to electronically transfer funds out of account.

INVESTMENTS

8. Establish an investment policy for the chapter. View an example here.
9. Conduct quarterly or semi-annual reviews of the investments with investment manager.
10. Allow only the treasurer, with Board approval, the authority to purchase or liquidate an investment.

BANK RECONCILIATION

11. Ensure a proper bank reconciliation is conducted every month.
12. Treasurer should review and initial reconciliations every six months.

CREDIT CARDS

13. Accept only the three major credit cards as payment.
14. Have net proceeds deposited directly into bank account.
15. Store credit card information in secure location. If credit card payment is stored electronically, ensure the safety of such information against third party access.
16. Ensure credit card processor does not allow a credit to be issued to a card that has never been charged.

ACCOUNTS PAYABLE

INVOICES

17. All invoices should be date-stamped upon receipt.
18. Attach proof of services rendered to invoice: copy of contract, sample of printed matter, copy of flyer for program, etc.

CHECKS

19. Ensure checks are maintained in a secure location.
20. Never make any check payable to cash and never sign a blank check.
21. Require two signatures for all checks over a reasonable limit ($5,000 or more).
22. Do not allow administrator to sign their compensation.
23. Pay from original invoices only. Fax copies can easily be altered.
24. Have the treasurer review a list of all checks monthly or quarterly. List should contain name of payee, date, amount and explanation of expense.

CODE TO CHART OF ACCOUNTS

25. Code income and expenses to the proper categories, which may be different than where it was budgeted. Consistent coding allows for proper historical comparisons. For example, if you budget $15,000 for program expenses, but you spend funds in excess of that amount, do not code the additional expenses to a different line item. Instead code the total expenses to programs, so that your expenses represent a true reflection of activities for the year.

ACCOUNTS RECEIVABLE

BAD DEBT AND COLLECTIONS

26. To avoid bad debt, to the extent possible, require all sponsorships be 100% pre-paid prior to an event.
27. Maintain an accurate and detailed list of all monies due the chapter. List should include amount, due date, payee name and address, contact name and number.
28. Issue reminder notices or calls for all accounts past due beyond 30 days.
29. Ask treasurer or other officer to call accounts past due beyond 60 days.
30. Report any non-payment to ACC HQ to assist with collection and/or cease other ACC business with company.

Return to Top

FINANCIAL STATEMENTS

A Treasurer’s Report should be part of each chapter board meeting. That report should contain, at a minimum, a Profit and Loss Statement (P & L) and a Balance Sheet. The P&L statement should compare year-to-date income and expenses against the current budget as well as against last year’s income and expenses. A P&L of this nature will allow a chapter board to fully examine the chapter’s current financial position relative to their budget and the prior year’s actual experience. A sample format for a financial statement is attached.

ACC RESERVES THE RIGHT TO INSPECT THE BOOKS OF ANY CHAPTER AT ANY TIME.
 

INCORPORATION

In order to further protect ACC’s chapter directors and officers and after careful review of the benefits, ACC incorporated all of its chapters. ACC handles annual reporting requirements and since chapter bylaws must contain certain provisions, it is important to have any amendments or revisions reviewed by ACC staff prior to approving the proposed changes. Forward any proposed bylaws amendments to ACC's Office of the General Counsel

Some of the benefits of incorporation are list below:

• Officers and directors will not be personally liable for damages relating to chapter activities, including personal injury, property damage, or contractual liability as long as individuals are acting reasonably, prudently, and in good faith. ACC currently has insurance that protects officers and directors, but incorporation provides further protection.
• An incorporated chapter can sue and be sued in its legal name. Unincorporated chapters must use board representatives to appear in court.
• It's easier to obtain insurance.
• It gives all chapters a separate legal existence under ACC. It further protects the Chapter's tax liability.
• In the event that a chapter would like to merge or split, the merger process is safer and more defined.

EIN NUMBERS

All chapters are automatically included under ACC's group §501(c) 6 tax exemption, but a chapter retains its own Employer Identification Number (EIN). Frequently chapter members or local sponsors will request the chapter’s EIN for tax purposes before or after making a payment to the chapter. The request may be verbal, in writing or by virtue of a W-9 form. Chapters should promptly comply with all such requests. The chapter administrator's address should be included on the form. If there is no chapter administrator, please include the chapter president's address. In response, please provide the chapter’s EIN and not the EIN of the entire association. ACC HQ will apply for EIN numbers on behalf of new chapters. Click here to view the chapters' EIN.

TAXES

ACC is a §501(c)6 organization, which means as a not-for profit corporation, it is exempt from federal and state income taxes in all states and countries thus far. Unrelated business income such as advertising sales in the U.S. may produce taxable income and require the approval of ACC HQ before such projects are undertaken. If ACC is required to pay unrelated business income taxes on behalf of a U.S. chapter’s activities, the amount may be charged back to the chapter. For more information on UBIT, see the enclosed article.

Status as a non-profit corporation is NOT the same as being tax exempt from U.S. state sales and use tax. ACC HQ applied for and was denied exemption from District of Columbia sales and use tax on multiple occasions. Depending on state law, a chapter may have greater success in its application, but typically §501(c)6 organizations are not granted such requests. Please contact your local authorities for additional information.

Chapters are not required to file U.S. state income tax returns. ACC HQ files a single federal tax return on behalf of all chapters. ACC HQ must be informed promptly of any contact with the IRS and will handle the inquiry on behalf of the chapter.

The only tax forms a U.S. chapter may be required to prepare is a 1099-MISC form if it hires an administrator or any other consultant on a consulting basis. Or a W-2 form if the chapter has an employee. See the section below for more information on this requirement.

TAX EXEMPT STATUS REVOCATION 

Chapters should be aware that tax-exempt status would be revoked if any part of an organization’s net earnings benefit a private individual. This benefit is called “inurement.” Examples of inurement include:

1. Rebates to members.
2. Dividends to members.
3. Executive compensation or benefits in excess of fair market value.

   To ensure that you are not compensating your administrator in excess of fair market value, please contact ACC Headquarters for general benchmarking compensation information from other ACC chapters as well as from the American Society of Association Executives (ASAE). We also encourage you to contact local Association Management Companies to obtain competing bids for the work that you require from an administrator. In the event that you do not hire an association management firm, several bids from these companies will provide you with a possible range of what you should be paying a single individual to complete the same services.

4. Transactions with officers, directors, or other insiders that are not conducted at “arms’ length” or fair market value.

   Example: Michael Johnson, who serves on a chapter’s board of directors, owns 25 percent of Wordsmith Publishing Company. The chapter enters into a contract with Wordsmith Publishing Company to produce its membership directory. Johnson knows this project represents good business for the publishing company; he also knows that, if the chapter inquired, it could print its membership directory for the same quality, but for a lower price at ASAP Publishing Company.

   To ensure that you don’t find yourself in this situation, a chapter must create a conflict-of-interest policy. Click here.

Return to Top

CHAPTER EMPLOYEES VS. CONSULTANTS 

Many chapters will find it necessary to hire an administrator to assist with the day-to-day operations of running a chapter. The following questions, established by the IRS, will help you ensure that your consultants are working as independent contractors. In general, answering “no” to questions 1 through 14 and “yes” to questions 15 through 19 indicates that a worker is an independent contractor, not an employee.

1. Are instructions furnished regarding where, when, and how worker performs?
2. Is training required by the employer?
3. Is the worker a necessary and vital part of the continuing business operations?
4. Are services rendered personally by the worker?
5. Is hiring, supervising, and paying of assistance done by the employer?
6. Are hours of work set by the employer?
7. Does a continuing relationship exist with the employer?
8. Is full-time service required by the employer?
9. Is the work done on the employer’s premises?
10. Is the order or sequence of services set by the employer?
11. Are oral or written reports required by the employer?
12. Are regular payments (hourly, weekly, monthly) made by the employer?
13. Are the worker’s expenses paid by the employer?
14. Does the employer have the right to hire and fire the worker?
15. Is there a profit or loss possibility by the worker?
16. Does the worker have a significant equipment investment?
17. Does the worker perform services for more than one organization simultaneously?
18. Are the worker’s services available to the general public?
19. Is the worker legally obligated to satisfactorily complete the job?

1099 FORMS

Before January 31 each year, U.S. chapters are required to provide a 1099-NEC to all independent (unincorporated) contractors they collaborated with in the previous tax year (1/1-12/31). This typically involves chapter administrators, executive directors, and interns. A 1099-NEC serves as an alternative to a W-2 and is legally mandated. Ensure that the 1099-NEC includes only fees paid to the contractor, excluding reimbursed expenses.

Before February 28 each year, U.S. chapters are required to submit either form 1099-NEC or 1099-MISC to the IRS. The NEC (Non-Employee Compensation) form is applicable for individuals, contractors, and administrators, while the MISC form is to be used for rents and payments for attorney fees.

Chapters will also need to complete a 1096 form, which is a cover, transmittal form (required even if you only issue one 1099-NEC).  ACC must also receive a copy of all 1099s issued. Send a copy to Ed Sharrer

To order these forms online, visit the IRS website. Or to use a service designed especially for small business to file the 1099s, visit https://quickbooks.intuit.com/payroll/. More information can be found at www.irs.gov

If the 1099 is prepared by the chapter administrator, it should be reviewed by the Treasurer or other appropriate board member.

Additionally, a chapter should request any individual or organization they provide a scholarship or pay a contribution to, to complete a W-9 form. This information is required in the annual Chapter Financial Report and thus should be collected at the time of payment.

DONATIONS AND SCHOLARSHIPS

Chapters are encouraged to formulate a charitable giving policy that governs what type of organizations, as well as the amount range the chapter is willing to contribute, to ensure appropriate distribution of funds and financial stewardship. View an example here.

Chapters are required to collect both EIN or SSN numbers and the corresponding IRS Code for every donation and scholarship facilitated by the chapter. The IRS now mandates that scholarships include not only the recipient's name and address but also their social security number. Regarding donations, it is necessary to provide the recipient's name and address, along with the Employer Identification Number (EIN) and the corresponding IRS code. The IRS code is a numerical and alphabetical designation assigned by the IRS to denote the type of organization. The inclusion of EIN/SSN and IRS codes is mandatory for all donations listed in the annual financial report.

Return to Top

REBATE TRANSFERS FROM ACC

All ACC chapters are eligible for a membership rebate according to the following criteria:

• A rebate of US$30 for each paying new and renewing member falling under the individual category within their service region.
• A rebate of US$15 for each new and renewing member falling under the corporate/corporate premium membership category within their service region
• Memberships falling under discounted Tier B, C, or D for in-house counsel, as well as complimentary, retired, or in-transition memberships, do not qualify for rebates.

Rebates are triggered by the receipt of dues payments by ACC for new and renewing members, and are typically paid out on a quarterly basis.

Every quarter, ACC sends chapters a rebate payment via ACH (US chapters) or wire transfer (non-US chapters) to the chapter's bank account on file. In addition to membership rebate funds, this payment may include other small miscellaneous additions and deductions for that chapter expenses. Expenses can include items such as: Zoom account charges, quarterly newsletters, and overnight mail fees. A detailed list of the rebate amount and deductions are sent in a rebate memo to the chapter treasurer (or a designee) and the chapter administrator following the remittance of funds. 

Rebate transfers will be withheld if a chapter does not submit their annual financial report and current FY budget. Transfers that are being held for failure to submit required forms will become void three months after the deadline of the specific report.

Chapters will be notified if a rebate payment is returned. Amounts that remain outstanding for six months will be canceled and may not be reissued.

INSURANCE

General Liability for U.S. and Canadian Chapters

ACC maintains a general liability insurance policy for all U.S. and Canadian chapters. The primary policy provides protection for incidents such as slip and falls and host liquor liability insurance with limits of US$1,000,000/US$2,000,000 per policy year. ACC also maintains an umbrella policy for U.S. and Canadian chapters in the amount of US$9,000,000.

When U.S. chapters arrange events involving external vendors, including hotels, caterers, members' companies, hired transportation or museums, the involved third party may occasionally require a Certificate of Insurance (COI). To obtain your Certificate of Insurance, forward a signed copy of the venue contract to ACC HQ. Certificates will be processed within 5 working days. In the event of any potential claims, promptly report them to ACC HQ.

The policy information is listed below:

• General Liability Policy: CNA - Policy # 7014870879 - $1,000,000 each occurrence/$2,000,000 aggregate limit
• Liquor Liability Policy: CNA - Policy # 7014870882 - $1,000,000 each common cause/$2,000,000 aggregate limit
• Umbrella Policy: CNA - Policy # 7014871336 - $9,000,000 each incident/$9,000,000 aggregate limit

GENERAL LIABILITY FOR NON-U.S. AND NON-CANADIAN CHAPTERS

ACC maintains a special general liability insurance policy for all non-U.S. chapters. The policy provides protection for incidents such as slip and falls and host liquor liability insurance with limits of US$1,000,000/US$2,000,000 per policy year. In addition, the policy includes employer liability coverage, property in-transit coverage, EDP coverage and more. ACC also maintains an umbrella policy for non-U.S. chapters in the amount of US$9,000,000.

As above, when non-U.S. chapters arrange events involving external vendors, including hotels, caterers, members' companies, hired transportation or museums, the involved third party may occasionally require a Certificate of Insurance (COI). To obtain your Certificate of Insurance, forward a signed copy of the venue contract to ACC HQ. Certificates will be processed within 5 working days. In the event of any potential claims, promptly report them to ACC HQ.

The policy information is listed below:

• Commercial Package Policy: CNA - Policy # WP 67 329 8905 – Liability – US$1,000,000 per occurrence/US$2,000,000 aggregate limit
• Umbrella Policy: CNA - Policy # 7014871336 – US$9,000,000M each incident/ US$9,000,000 aggregate limit

DIRECTORS AND OFFICERS’ LIABILITY POLICY FOR ALL ACC VOLUNTEER LEADERS AND INSURANCE REQUIREMENTS FOR ADMINISTRATORS

ACC maintains US$10,000,000 Directors’ and Officers’ liability insurance. This policy extends to all ACC volunteer leaders.

It does not extend to chapter administrators or executive directors who are hired as paid independent consultants. ACC requires all chapter administrators hired as independent consultants to carry professional liability insurance if applicable and demonstrate proof of insurance within 30 days of contract signature or renewal. Chapter administrators should consult an insurance company for an individual risk assessment and determine if and at what level of insurance may be necessary.

Administrators who are hired as employees via an employment agency should be provided with workers compensation insurance by that agency. If hired directly by the chapter, the chapter is responsible for complying with all local and national laws required of organizations with employees, including but not limited to, providing workers compensation insurance.

ACC may reimburse individuals covered by the Directors’ and Officers' liability policy for the deductible of the liability policy when the chapter lacks the necessary resources to do so on its own. Below is the policy information and some FAQs about the policy. For more specific questions, please contact ACC HQ.

• Directors & Officers Policy: CNA - Policy # 268118327 - US$5,000,000; Deductible: US$50,000 
• Excess Directors & Officers Policy: Allied World - Policy #0313-8290 - US$5,000,000 

DIRECTOR AND OFFICERS' LIABILITY POLICY FAQ'S

1. Who is covered?
   Directors and officers of the organization and its subsidiaries are covered. The types of liability covered by the policy exist not only for the organization, but also for those who run it. It is very important to recognize that the board of directors and officers of the organization may have personal liability for many of the covered actions and that personal assets may be attached as a result of an adverse judgment. It will also pay costs to defend the individual(s) and or the organization for covered "wrongful acts."
2. What is covered?
   Coverage is for wrongful acts committed by a covered party or group of covered parties while acting within the scope of their duties to the organization.

A wrongful act is an:
A. Act
B. Error
C. Omission
D. Misstatement or misleading statement
E. Neglect or breach of duty

Examples of wrongful acts:
A. Management of funds (not benefit plans)
B. Management of the affairs of the organization
C. Employment practices
D. Publisher's liability (limited to copyright infringement, libel and plagiarism)
E. Libel, slander, or defamation

Examples of what is not covered
A. Bodily injury or property damage
B. Ensured gaining profit or advantage not legally entitled to
C. Willful violation of a statute
D. Fiduciary liability as regards employee benefit or pension plans
E. Failure to maintain insurance

CRIME INSURANCE

ACC’s Crime Insurance protects the chapter against dishonesty, fraud, embezzlement, etc. perpetrated by employees, independent consultants and volunteer leaders.

• Crime Policy: Travelers - Policy # 105557058, US$100,000; Retention: US$1,000 

Excluded from umbrella policies, the chapter is responsible for covering the US$121 annual fee, which will be deducted from the chapter rebates.

OPTIONAL MALPRACTICE INSURANCE

Chapters interested in securing malpractice insurance, to cover member participation in pro bono activities, can purchase insurance through The National Legal Aid and Defender Association (NLADA) at very reasonable rates. To learn more, contact NLADA at + 1 202.452.0620 or email info@nlada.org.

Return to Top

ONLINE AND PRINT AD INCOME COMPUTATION

Several ACC chapters provide online and/or print ad space to sponsors as part of their sponsorship packages. If any of those ads are corporate identity ads of the sponsors (see more information on UBIT), they have generated taxable income to the chapter and must be reported on your Annual Financial Report as such. The IRS does not allow entities to shield taxable income (in ACC's case, advertising) in a non-taxable source of income (in ACC's case, sponsorships). If advertising opportunities are provided to sponsors as part of a single priced sponsorship package, advertising income must be computed and be reported separately.

Calculating ONLINE ADVERTISING INCOMe as part of larger sponsorship package

Using ACC’s own market rate for online homepage advertising as a basis, the following formula can be used to compute your chapter’s online advertising income.

Actual monthly price of ACC banner ad: $7,000
Number of ACC members as of 9/30/23: 46,500
Price per ACC member per month: $7,000/46,500 = $.15

Nevertheless, adjustments are required for this formula as chapter homepages cater to a more limited audience. To implement this formula for a chapter, follow these steps:

Price to reach one ACC member per month: $.15
Number of chapter members as of September 30: A
Number of months ad appeared: B
Income per ad formula: $.15 x A x B

To illustrate this formula, assume a chapter had 1,200 members on September 30, and displayed one banner ad per month.

Actual monthly price to reach an ACC member: $.15
Number of chapter members as of September 30: 1,200
Number of months ad appeared: 3
$.15 x 1,200 x 1 = $180.00 Advertising income per per month
$180 x 12 = $2,160.00 Total advertising income for the year

Calculating PRINT ADVERTISING INCOME as part of larger Sponsorship Package

Based on ACC's internal market rate for ACC Docket (when it was printed), you can calculate your chapter's print advertising income using the following formula:

ACC Docket is an 8x11 publication printed 10 times per year
Per issue price of a black & white ad: Full page (8x11) - $5,250, Half page (8x5.5) $3,885
ACC Docket circulation: 42,000 
Cost per subscriber: Full page = $.13 or $5,250/42,000, Half page = $.09 or $3,885/42,000
The ACC Docket does not sell quarter page ads.

To apply this formula to a chapter, proceed using the following example:

September 30 membership or circulation of chapter publication – if they differ, use the larger of the two: 400 
Size of overall publication: 8x10 newsletter or directory
Size of ad: Full page (8x10), half (8x5)
Price of one Full page ad: 400 x $.13 = $52
Price of one Half page ad: 400 x$.09 = $36

NOTES

1. If you run quarter page ads, given the half page price is 73% of the full page price, consider making the quarter page price 73% of the half page price. The theory is there is better value is in the full page ad and advertisers will upgrade to full.
2. The type of publication is not important. If your publication is substantially smaller that 8x11, then decrease the pricing accordingly as the exposure/ad size will be that much less. So if your publication is 5x7, use the ACC Docket half page advertising for a full page ad in this smaller publication.
3. If the ad is thanking or congratulating the chapter, it does not need to be included in this calculation.

If you have any questions, please contact ACC Senior Controller, Ed Sharrer

AUDIT

ACC does not require chapters to have their books independently audited, but as a chapter’s income/budget approaches $500,000, it is suggested a chapter conduct a financial review (less comprehensive than an audit, also less expensive) every 2-3 years. For these large chapters, an independent review will help fulfill many of the Board’s financial oversight obligations and governance responsibilities. Chapters may hire local accountants at their own expense or request this service from ACC HQ. ACC will send a member of its financial staff to conduct an onsite review at no cost to the chapter.

An operational review by ACC staff is a comprehensive evaluation of your operations that many chapters have found quite beneficial. Below is an overview of such a review.

Overview of a Chapter Operations Review as Conducted by Staff from ACC HQ

Purpose of review: To ensure the financial affairs of an ACC chapter are being conducted efficiently and effectively, that funds are properly accounted for, that the chapter is utilizing responsible financial controls, that the chapter board is fulfilling its fiduciary duties, and that the chapter is operating consistent with its non-profit status.

Review process: The review takes approximately 1.5 days to complete, primarily with the individual (administrator, accountant, or volunteer treasurer) that manages the books for the Chapter. It is conducted at his or her office, or the location of the financial records.

Typically, a vast majority of the time is spent interviewing the administrator/bookkeeper/treasurer about processes, controls, banking operations, contract procedures, and such. This includes a sample review of actual records in each category so it is important that the review be conducted at the location of the records.

Review report:Because the written report takes 3-6 weeks to complete, when possible, the ACC reviewer provides an oral report to the chapter's president, treasurer, and any other pertinent members of the board. A complete, multi-paged report is provided to the chapter president and treasurer 3-6 weeks later. The chapter is required to provide a written response to the report within 3 months of receipt.

RECORDS RETENTION POLICY

Chapters should retain monthly/quarterly financial reports, P&L statements for specific programs, credit card charges, and bank statements for five years from the date of the record or event. For information on retention of other documents, see the Record Retention Policy.

Return to Top