“Not for Profit” Faceting Clubs

“Not for Profit” Faceting Clubs

I only support not for profit faceting guilds or clubs and here is why.

Non Profit organizations are required by law to maintain a certain clarity both in how they are run and how they use/spend their money that other clubs that are for profit do not do.

Here are some general things you will see in a “not for profit” club or guild.

  • Non profit organizations have clear guidelines and rules set out in their charters. These guidelines state what their goals are and often how they will promote their particular hobby or interest.
  • Non profits have elected officers. Officer’s that are elected by the club members in yearly elections. The election of officers by the club body makes the club board or “officers” more responsive to the interests of the whole membership of the club. Elected officers is one good way to keep a “group” or “click” of a small number of people from hijacking the club for their own limited interests. Elected officers have to be more responsive to the interests of the membership as a whole.
  • Non profits have regular financial statements that clearly spell out how much money was collected by the club and how the money collected was spent. These financial statements are distributed to all members of the club so people know what and where the money the club collected is/was being used.
  • Usually non profits have a mission statement that says they will work to promote their interest and contribute to their community. That is really the whole purpose and why the government licenses non profit organizations in the first place.
  • Most non profit organizations are required to spend most of the money they collect promoting the clubs interests (see mission statement). Depending on the legalities not for profits are usually only allowed to keep basic operating costs in their accounts from year to year.

You have a problem in a club if. A club does not have open and public elections of club officers – This is always an issue in any club I have ever been in. It seems like only a few people want to do the actual work and/or often there is a small click of people that want to create their own little empire irregardless of what the majority of the club members want to do. It is important that all members know what is going on in the club and that people participate. When a click forms, it usually damages the over all interest of the club and it’s members.

A club does not issue a clear and comprehensive financial statement. This is a major issue, in my opinion a nonprofit club should issue a financial statement at least every quarter (monthly is better). Depending on the state and their type non profit organizations are required to do so by law.

Why is a financial statement of the club important?

Here is an example. Say there is a club you joined (I can name a few). The club has a membership of say… 350 members and yearly membership is $20/year. Assuming the club does not do anything else to create income (most clubs do generate other income), this club will collect $7000.00 a year in just membership dues. Over a 5 year period the club will take in $35000.00 in membership dues. As you can see there can be a lot of money involved.

The question is. “Where does the money go?” Who is paid? How much are they paid? Depending on the club there maybe a property (clubhouse) to maintain, there may not be.
There maybe a “newsletter” that is published to members monthly or quarterly.
There maybe other charity type things the club is involved in either collecting money or spending money.
There could be teaching and community out reach.
There maybe professional fees paid by the club. Like to judges (in contests or competitions), bankers, laywers, ect…

The point is that without a proper financial statement of the club’s expenditures and assets there is no way to know what and where the money is going. Would you just ignore $35,000.00 if it was your money? Not likely.

Well I have news for you. If you are a member of a club that does not publish financial statements. You are guilty of ignoring that much money, maybe more.

This type of situation can create not only tax (IRS) problems that could destroy the club, but also situations where money just magically disappears.

Not to mention that if the majority of club members do not know the finances, assuming that things are handled honestly by the people running the club. How can members have a say in the way the club is being run and their money is spent?

A club that is not responsive to the majority it’s members interests, and not issuing correct financial statements is either a very poorly run non profit club or is a for profit club and you should be asking some questions if you are a member.

Gram Faceting Archive of Information
This edited version of an article by the late Jeff Graham is part of a special archived informational series from Gram Faceting. Used with permission.