Setting Up Your Guild Finances

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SETTING UP YOUR GUILD FINANCES

GUILD BANK ACCOUNTS

It is important for all guilds in the U.S. and abroad to have all guild finances outside of a personal bank account. While this is only a requirement for membership for U.S.-based guilds, we encourage all guilds to follow the same suggestions. This gives guilds the ability to easily and transparently track and report on your guild funds. Having a separate, dedicated bank account keeps guild funds separate from any personal funds and bank accounts of the treasurer and other executive members. This is particularly important for collection of your guild dues and any charitable donations you accept.

We recommend shopping around for a bank account. Find a bank with enough branches that it will be easy for any subsequent treasurers to visit a location convenient to them. Because your guild is a non-profit organization, ask the bank about a free or low-cost account intended for not-for-profit or community organizations.

Before opening your account, call the bank you have chosen see what documents will be needed. This will often include your EIN or equivalent business or not-for profit registration number. Banks may require any of the following documents:

  • Copy of formation documents (this varies by bank, but may include minutes from your first meeting, guild bylaws, etc.)
  • Photo ID of any signatory on the account.
  • Initial deposit

There are some additional things to consider when opening your bank account:

  • Who will be authorized on the account to sign checks?
    • Besides your treasurer, who on the executive board will have the ability to approve payments? Generally guilds allow the president and treasurer to do so, although some guilds also include the vice president and secretary to be signatories. Be conscious of the fact that all signatories may need to be present when opening the account.
  • Will you require one or two signatures on checks?
  • Will the bank account include a debit card? If so, who will have those cards and PIN numbers?
  • Who has access to accept and send electronic transfers on the account?

If your bank account has online access, ensure that there are at least two people in the guild who can access the bank account, including the ability to reset passwords. These two people can share login information or have separate accounts. This again is generally at least the president and treasurer.

OTHER FINANCIAL PAYMENT SYSTEMS

In addition to accepting cash or checks to your bank account, many guilds find having an electronic form of payment very useful. Many guilds set up a PayPal Business Account because this enables the guild to invoice for events, use a credit card reader for in-person payments, and use PayPal in lieu of your bank account on many online platforms. Setting up a PayPal Business Account is easy to do on paypal.com with an email address and password.

Other online credit card processing systems are available, including Square, ZenCart, or Stripe. Find the option that works best for your organization.

 

WHAT FINANCIAL RECORDS NEED TO BE KEPT:

While each guild is different in what copies of financial records you keep, at a minimum we suggest that you keep the following documents:

  • The guild’s EIN letter from the IRS (U.S. guilds only)
  • Any registration certifications
  • Copies of the annual Profit & Loss Statements. U.S. guilds will have to submit these to the MQG each fall
  • Records of any board meetings and any changes to your guild bylaws for historical knowledge
  • Records of any insurance policies covering the guild

 

HOW SHOULD WE BE RECORDING FINANCIAL INFORMATION

Working with the treasurer to select a method to record financial transactions, you should keep in mind the following considerations:

  • These records will need to be taken over by another treasurer in the future, so your method should not be overly complex or expensive to access. Guilds commonly use a spreadsheet in Excel or Google Sheets. Larger guilds with significant funds through the years may choose to use QuickBooks Online.
  • The method you choose should allow for a summarized report to the executive committee and guild members on a periodic basis. Detailed record-keeping is important, but a separate summary sheet or other report should be created to allow a snapshot of the financial picture for decision making.
  • The method you use should allow for reconciliation between the financial records and the guild’s bank account on a periodic basis.

If you are collecting or raising money for a specific purpose, like the purchase of supplies for charity quilts, you should work with your Treasurer to specifically identify or mark those revenues and expenses to provide reporting to your guild executive and membership.

 

BUDGETING & DUES

Every guild needs to create at least a basic budget for the activities you are planning during the year.

The majority of all recurring revenue will come from membership dues, which are charged by virtually all guilds. Currently, based on an informal survey, we found that guild dues in the U.S. range from $25-$75, with an an average being around $50.

At a minimum, your guild will need to cover membership in the MQG. You can see the guild dues costs here. You will need to think about other costs that your guild will likely incur - meeting space, insurance, and bank fees. If you are planning on hosting sew days, retreats, or workshops there may be additional upfront payments required before the event for deposits on space or due to the instructor. You may also want to budget for refreshments for social activities or prizes for contests and challenges.

 

When hosting an event or bringing in an outside speaker, some guilds will choose to cover those expenses out of guild funds, while others use general membership dues and charge a fee to individuals who attend the specific events.

 

HOW TO SHARE FINANCIAL INFORMATION WITH THE GUILD

Your membership will likely provide guidance on how much financial information and details they are interested in. They will likely want to know that their membership dues are being spent appropriately and the guild is financially stable. Here are some tips for discussing the finances of the guild:

  • Focus on the value that the member receives from both the local guild and from the overall MQG organization, including highlights of what the guild did during the last year and what benefits the members get from the MQG. This helps members understand what they get for the individual dues, and why the local guild pays dues to the MQG.
  • Share highlights of the budget and financial results with the guild. Guild members may not need to understand every transaction, but should have an understanding of what the finances look like and where funds are being spent. In addition, if you have earmarked revenues for a specific project or activity, like charity quilts, you should provide a breakdown of how much money was spent on that endeavor, and what the money was used for.
  • Help your members to understand that many retreats and teachers generally require a deposit long before you do registration for your event, so having a balance in your coffers helps to stabilize your guild and plan for events that may be occurring a year or two in advance.

REVIEWING YOUR FINANCIAL RECORDS

The officers of the guild should receive timely reports of the financial activity of the guild. Review of these reports by the officers is an important task in ensuring that guild funds are being used as expected and in understanding the financial health of the guild.

 

In addition, it is important that your guild has someone other than the treasurer review your accounts on a regular basis, preferably at least annually. It is encouraged that you formalize this practice by writing it into your bylaws, but you should conduct a review even if there is no formal requirement to do so. Many guilds will either get a member of the guild who is a professional accountant or a small committee of two or three members to review the finances of the guild. At a minimum, the people or committee responsible for the review should look at some of the transactions to make sure they seem appropriate given the activity of the guild. In addition, the Treasurer should provide a bank statement and explanation of how the guild books reconcile to the bank statement. Hiring a professional accountant from outside your guild for the review likely isn’t necessary unless you have significant funds or fear impropriety.

FUNDRAISING AND SPONSORSHIPS

Some guilds choose to supplement their dues income with fundraising or sponsorships. You could approach local stores to request financial sponsorships for specific events, or you can hold a raffle. Please note that raffle laws can vary by jurisdiction, so please check with your state, province or equivalent to ensure you are complying with any raffle laws. The quilting industry is very generous, and many companies are willing to donate a raffle or door prize, but try to submit requests earlier in the year, as some of the larger companies have a limit on what they will donate in a given quarter or year.

 

Sponsorships:

https://community.themodernquiltguild.com/resources/wheres-swag-bag-sponsorships-partnerships-your-guild

LIABILITY INSURANCE

Although your guild is an affiliate member of the MQG, your guild and guild activities are not covered under the MQG’s insurance policies.

 

It is highly recommended that liability insurance be purchased for your guild. This helps protect your leadership and your meeting location. It may seem like a large expense at the outset, but you should maintain that protection for your guild.

 

You can purchase liability insurance through any of the large insurers. The MQG has also done extensive research into the pricing options for liability insurance and has found a competitive agent you can work with who is familiar with the needs and situation of local MQGs. Here is more information for the agent.

 

Before purchasing insurance, check with your meeting location to see if they have any minimum insurance requirements for using their facilities. Facilities may require a certificate of insurance covering them under your policy for meetings and events.

    

As with other important guild documents, the insurance policies and insurance certificates should be accessible by more than one officer of the guild, and likely stored electronically.