Financial Stability

What is the most important factor in the success of a chapter? A strong brotherhood? Good leadership and management? A large number of men? A nice house? All of these factors are important and may even be critical for a chapter. However, one of the most overlooked factors is good financial management or financial stability.

Two mistaken impression often exist among members, and both statements are erroneous and dangerous to the health of a chapter:

  1. That financial matters are entirely the concern of the Crysophylos, and

  2. That financial management consists of keeping a good set of records.

Financial matters should be a concern of every man and especially each officer. One of the chief reasons for the failure of many groups is poor financial management -- large number of members not paying their bills, expenditures in excess of income, deterioration of physical facilities, cancellation of events, etc. Every member has a stake and, therefore, has a right to know how his money is being spent. He should insist that it is spent wisely.

Although an accurate record of all income and expenditures following some acceptable format is important, good financial management is much more than this. The essence of financial management is:

  1. planning, and

  2. control -- developing a budget and establishing procedures to insure that expenses do not exceed budgeted amounts.

As a member of officer, here are a few things that you can do to increase the probability that your chapter will be financially stable:

  1. Insist that a budget be established at the beginning of each school year and reviewed periodically. A budget should be simple to understand: Income = number of men x dues. Expenses categorized by area: social, rush, etc. Expenses do not exceed income. A good target is that the total of all budgeted expenses should not exceed 90% of the projected income.

  2. Require a written financial report from the Crysophylos periodically - at least once every three months. This report shows what income has been received and where the money has been spent, with the expenditures in each area being compared to the budgeted amounts.

  3. Make sure your chapter has some sound financial policies in these areas:

    • Payment of dues: A definite schedule for payment with stated grace period. All persons not paying by the end of the grace period lose all membership privileges until the dues are paid. You do your chapter and the individual involved a disservice by allowing him to enjoy the benefits of the Fraternity without paying his fair share of the costs; this is poor training for the future-in both family and organization financial affairs.

    • Budgeted Expenditures: No committee or individual can spend more than the budgeted amount for his area unless someone else agrees to a reduction in the amount budgeted to them. It is the responsibility of the Crysophylos, through good record keeping, to make sure the budget is not exceeded.

  4. Establish a Finance Committee composed of several people to (a) help draw up the budget, (b) to formulate and enforce financial policies, and (c) offer advice on financial problems.

  5. Involve the Board of Advisors, who should be the watchdog in all financial matters by (a) approving the budget, (b) getting copies of financial reports, (c) approving expenditures for capital improvements (new furniture or equipment, repairs or remodeling of house, etc.), and (d) being consulted on major financial problems.

No organization, whether it be a fraternity, a university, or a business, can survive without good financial management.