Our Vision: "Women and girls have the resources and opportunities to reach their full potential and live their dreams."

4/20/2019 - Responses to Caucus Call Questions

Responses to Caucus Call Questions & Discussion on Bylaw 9.3 Proposed Amendment
Dear Founder Region Delegates,
Thank you to those who participated in the April 7/8 Caucus Conference Call.  There were requests for additional information and clarification that we would like to address in advance of Founder Region Conference.

Additional information Post Caucus
The Bylaw 9.3 Proposed Amendment has accompanying procedural language that the Region Board felt belongs in Procedures rather than Bylaws.  For the delegates awareness, in the Founder Region Procedures revision dated August 2018, the Founder Region Board added 7. d)  (Please note this language works with the current, as well as the proposed Bylaw 9.3)

7. Special Accounts
a)The Administrative reserve is maintained to ensure long term financial sustainability of the organization by providing a cushion against unexpected events, such as significant loss of dues revenue, or, to meet unfulfilled contractual commitments. The Founder Region Board may authorize expenditures from the reserve and a disclosure of the reason for use of any portion of the reserve must be reported at the annual Founder Region conference. The report must include a strategy statement and timetable for replenishment of the reserve. In order to maintain the reserves at the agreed level, the Budget Committee will review the ratio of reserves to budgeted expenses on a biennial basis and present any suggested change to the Region Board.

Question:  On the Caucus Conference Call there was discussion concerning setting a minimum dollar amount for the administrative reserve account.
Answer:  In effect, there is a minimum dollar amount which is associated with the projected budget for a biennium.  It is a specific calculation and not a fixed dollar amount so that in the case of a catastrophic event or declining membership, the region board does not have to keep more funds in reserve than would be achievable.
Parliamentarian Barbara Lanier guided us to be mindful that the suggestion to set a minimum dollar amount is outside the scope of this proposal, therefore an amendment offering a fixed dollar amount at this Conference would be ruled out of order.

Question:  Could we get more clarification?
Answer:  Research regarding NON-PROFIT ACCOUNTING BASICS
Source:  The Greater Washington Society of CPAs Nonprofit Financial Accountability Task Force is a nation-wide collaborative comprised of members of the accounting and nonprofit communities that seek to strengthen the nonprofit sector in the US by improving financial accountability in the sector through ongoing education initiatives and robust discussion of current topics.

Quoting from the topic:  Policies and Procedures - Operational reserves:
“Operational reserves are funds an organization accumulates over the years by operating with a surplus. Consciously building a reserves fund allows the organization to:
•     be prepared for the inevitable rainy days
•     adjust to seasonal variances in revenue
•     seize an unprecedented opportunity when it knocks on the door
 Operational reserves demonstrate wise risk management and smart financial planning.
Each nonprofit must determine its own policy for operational reserves. There is no strict formula that applies to all nonprofits and appropriate for every organization. An educational organization looks at this issue from a very different standpoint than a relief organization.
The following questions can help the board with calculating the proper amount of operational reserves for the organization:
•     What are our today’s needs vs. future needs?
•     Do we have a moral obligation to serve today’s needs or should we consider the needs of our future beneficiaries?
•     How secure are our funding sources?
•     Do we function in a particularly vulnerable location or is our mission area susceptible to risks and set-backs?
•     How important is additional income from investing our reserves?
The board may determine a three-month or a six-month reserve pool is enough. Or, it may calculate more precisely how many months it is possible for the organization to continue functioning without income and set the policy to reflect that goal.
The policy should specify that the board must give the green light before you dip into the reserve fund. Operational reserves are usually considered as board-designated funds.”

Above Reference link:  https://www.nonprofitaccountingbasics.org/organizational-structure/reserves
Question:  There was a question on the calculation of 7 months being to a 12 or 24 month ratio.
Answer:  As the biennium is 24 months, the calculation is the total budget for the biennium divided by 24 months then multiply that amount by 7 to obtain the amount to be kept in the reserve account during that biennium.

Question:  There was a request for more information concerning what happens in the event the region folds.
Answer:  As per Founder Region Bylaw  ARTICLE XIII Dissolution Upon the dissolution or winding up of the organization, all assets remaining after payment or provision for payment of all debts and liabilities of this organization, shall be distributed to a nonprofit fund, foundation or corporation that is organized and operated exclusively for social welfare purposes to benefit women and girls and which has established its tax exempt status under Section 501(c)(3) of the Internal Revenue Code.

Thank you for taking the time to review this information in advance of our Founder Region Conference.

Governor Sylvia
"Empowering Change"

No Comments




no categories


no tags