The move by many host institutions to virtual classes, temporary cancellation, mandatory or voluntary move-out of university housing, and restrictions on large and small group activities, will impact the operations and planned activities of chapters. Therefore, it is important for chapters to plan for the possible financial impact this will cause.
While a postponement or cancellation of some chapter events may reduce or delay certain expenses, there are other costs associated with a chapter’s operations – and a chapter house – that will continue whether a chapter is operating normally or not. Further, an unexpected delay or cancellation of activities could result in unexpected additional costs. It is important that chapter officers, with the assistance of advisors, consider these financial matters and plan accordingly.
Chapter officers and alumni advisors – working with their respective house corporation, if applicable – should review the budget for the remainder of the term, in a prioritized manner, to first account for fixed operational costs and then for variable expenses.
Fixed operational costs of the chapter may include:
- Dues and fees to the local IFC and college or university
- Fees and assessments to the Fraternity, which include:
- Chapter Assessments & Membership Fees
- Liability Assessments
- Initiation Fees
- Budgeted Convention Expenses
- Other items the chapter may be contractually obligated to pay.
- If applicable, items which are paid in support of the chapter house such as parlor fees.
Plans for the continued payment of fixed operational costs during any period of disruption should be confirmed to maintain essential services, including insurance coverage and utilities.
Alternatively, a chapter’s variable costs may change due to a disruption in regular business operations. Such variable costs are most often related to activities and events, including philanthropic, community service, and social activities and events.
Chapters should maintain their dues structure and the collection of dues during any period of disruption. Only after careful consideration by the chapter officers and alumni advisors should any adjustment be considered to the dues structure, and only to the extent that certain variable costs will no longer be incurred by the chapter due to cancellation.
It is further recommended that this consideration should only be made if all members are paid in full so an equal application could be made. The impact of this shut down may only apply to 25-40% of the remaining term although chapter operational expenses remain. If considered at all, the adjustment should only be applied to the period of time impacted, not the entire term or past due amounts.
Communication to all chapter members regarding these financial plans will be key to ensuring their understanding and will position the chapter to promptly restore full operations as soon as possible.