Managing Your Chapter's Cash Flow

 by Marc Weppner, VA Omicron Zeta '92

As we are passing the mid-point of the semester, some chapters begin to face cash flow challenges – either the budgets were under-estimated or collections aren’t going quite as well as expected. There are exceptions to the rule, of course – but managing your cash flow to get you through the rest of the semester is a challenge – and one you can meet.

The first step is making sure you know where you stand at this very point in time. Do not rely on an ATM receipt, or an online balance check – these will not reflect any outstanding checks or deposits in transit. You need to keep track of your balances, knowing what has been sent out, and what has come in.

Once you know where you are with your cash balance, you need to figure out your “fixed costs” for the remainder of the semester. These include your dues to IHQ (11/15 is the second quarterly due date), any fixed housing costs you may have, as well as any other “mandatory” costs your chapter faces.

At this point, you really know where you stand. Take your current cash and subtract the fixed costs – is this a negative number, or a positive one? If it is positive, you are in good shape. If it is negative, it is time for some work.

If your result is negative, odds are you have some collecting to do from your brotherhood. Do not back down and do not accept excuses. Brothers must meet their financial obligations. Please reference my Convention finance presentation (which can be found on the Pi Lam site in the Knowledge Base area) for ways to motivate the brothers to pay.

If you are in a cash crunch, make sure that anything you are spending money on is truly needed. If items arise that are “luxury items”, take up a special collection specifically for that item/event. Do not use the money you have budgeted for your fixed costs for something that is fun, or something that is an impulse decision. If you have a social event coming up, but still haven’t paid IHQ or a house payment…you will either need to cancel the event, or use that reality as a motivator for more dues collections from the chapter. Once the “fun” starts disappearing, brothers tend to magically “find money” they didn’t have to pay some dues to bring the fun events back. 

If your cash flow result from the calculation a few paragraphs ago was positive, you are in good shape – but the work isn’t complete. It is now your responsibility to make sure you pay your fixed obligations, and to make sure that your “luxury” items/events stay within budgeted amounts. Also make sure that the chapter doesn’t get carried away, turning your positive cash flow projection into a negative one. Only one or two of our chapters collect 100% of dues…so, unless you are one of those, you still have some collection work to do as well. Don’t “sit back and coast” simply because you feel you are in a good position today. Keep working towards a better cash position and better collection percentages – this will only make your chapter stronger in the long run.

If you don’t have a “Fundraising Chair” in your chapter, you might want to think about creating this position. Have your Fundraising Chair contact IHQ for ideas and contact info for other chapters that have had success in the recent past with fundraisers. I have heard of a handful of chapters already this year that have made huge improvements in their financial performance due to successful fundraising strategies.

Another option to consider – using Omega Financial. We currently have 12 Pi Lam groups using Omega, and it sounds like it is a successful option. For more information, please contact IHQ – this could be a very easy way to increase your collections, reduce your stress, and get your chapter on solid ground financially.

Moving forward, I recommend you start working on your spring semester budget during the first week of November. That way, you have a few weeks to work with all the officers and committee chairs to put a solid budget together, and plenty of time to discuss it with the chapter and make any adjustments needed. This process should be completed BEFORE leaving for winter break. This will let everyone know their commitment that is needed for the spring semester. They can either work over break to raise the money, ask their parents for it, etc…but this removes any “I had no idea how much it was going to be and don’t have the money” excuses.  

Also – don’t forget to collect from your new members in order to pay their new member fees and initiation fees on time. There is no need for these to come out of your operational budget – these fees can and should be paid by the new members. They need to understand the financial obligations of Greek life from the start.

I want to end this on a very positive note – as of the moment I am typing this (10/23/09), 35 of 39 chapters/colonies have met their financial obligations through the 10/15 due date! THANK YOU! I am looking forward to similar, if not better, success with the 11/15 due date as well as the upcoming spring semester. Keep up the great work!

Here is a link to some of the resources available on the Pi Lam site (follow the link and scroll down to the “Finances and Budgeting” section). Please take advantage of these, and don’t hesitate to contact me, or IHQ, if you have any questions or need any assistance with these items, or with anything else.

Presentation Materials Library

(Note…in addition to the resources I referenced above, there is a lot of useful information on the page linked as well)

Good luck with the rest of your semester and with the spring! 

Not Four Years, But A Lifetime!