Building Your Chapter Treasury

Tips On Building Your Chapter Treasury

• Consider using free locations for your events:
  Many chapters will host their events at bank facilities or other free sites. Some chapters will use a restaurant and host their event in a free room that the restaurant offers with purchase of luncheons. A hotel is probably one of the most expensive venues that can be used. However, room charges, especially at hotels, are usually negotiable. If you are ordering food or drinks, many hotels and restaurants will waive the room charge…but only if you ask!
• Hold open enrollments/Audioconferences/lending academies/conferences:
  RMA provides the chapter a rebate on open enrollment courses when attendance exceeds 15 people. Additionally, in some years RMA has provided an extra rebate at the end of the year based on the total number of attendees for all open enrollments held during the year. Build a program around RMA's Audioconferences. For example, some chapters will build a program around an Audioconference by providing a facility and lunch, and then charging each attendee. Lending Academies and Conferences are excellent treasury builders if run correctly and the chapter is mindful of costs associated with obtaining a space and the cost of the materials and instructors. Remember to be flexible and build the schedule to have the least amount of upfront costs should the event have to be cancelled due to low enrollment. Local universities are a great place to hold the event and carry lower cost components than hotels and conference centers. Also, it is possible a local bank could accommodate the school or conference.
• Cover your event costs and make a profit:
  While the idea of running events at cost or subsidizing events may help your members in the short run by lowering the cost to participate in events, it may hurt your chapter over the long haul as your chapter treasury goes down. Plan events that will cover their entire cost plus provide a small profit. For tips on how to do this, see attached break-even analysis.
• Take advantage of non-profit status:
  Many hotels, restaurants, and stores will waive sales tax if shown proof the group has a not-for-profit tax id #. For example, if a non-profit group uses the proper paperwork to set up an account at Kinko's, the store won't charge sales tax when jobs are charged to that account. This can usually be done to order office supplies with various companies as well. Check with the venue where you're holding an event. Most restaurants and hotels will not charge sales tax, but will require proof of not-for-profit status.
• Bring your own audio/visual equipment.
  The price to rent audio/visual equipment at hotels can be high. If someone in your group has equipment such as a laptop and projector that they can bring, you will save several hundred dollars. Always check with the venue first to make sure you are permitted to bring in your own equipment.
• Sell tables at events to your member organizations:
  Some chapters sell tables for the entire year's calendar of events. Once sold, the member institution determines how to fill the table for each event.
• Charge your non-member attendees a premium.
  Your nonmember price might be $5 -10 higher than your member pricing for a general membership meeting. Setting a higher nonmember rate also shows members an added benefit of belonging to RMA.
• When hosting an event, check on the added per person costs and include these in your meal price:
  A hotel will typically add 28% to the quoted meal price per person to cover service, tax, etc. With proof of a non-profit tax id#, most places will waive the tax (not service) portion. Be sure to ask!
• Consider a sponsor for your event:
  Many chapters now invite other organizations (CPA firms, law firms, vendors) to sponsor their event. The fees collected can offset your meeting costs, as well as offer an opportunity to the firm to network with your attendees. You can offer your sponsors their logo and name on your event flyer, signage at the event, an opportunity to greet the crowd as the event's sponsor. Sponsorships at local chapter events have ranged from $250 to $2,000.
• Consider holding a joint event:
  Invite other organizations (CPA firms, law firms, vendors) to hold a joint event. This can help offset the cost as well as increasing the number of attendees at the event.
• Charge local chapter dues:
  Some RMA chapters charge local chapter dues to their members. These are usually nominal—in the $20 range—but can offer the chapter more flexibility. One chapter charges local members $75.00, but offers the member free attendance at three general membership meetings during the year. Because this amounts to pre-payment for the meetings, it also helps ensure a good turnout.

How To Build A Treasury: Break-Even Analysis

1) Categorize expenses
The first step to doing a break-even analysis is to divide your costs for the event into fixed and variable. Use a spreadsheet for this analysis.

Fixed Costs (also known as overhead) are all charges that apply regardless of the number of people attending. Examples of fixed costs include:

• Room charges.
• Audio/visual equipment rental.
• Speaker fees (Including travel expenses).
• Speaker gifts.
• Cost of the speaker's food for the event.
• Printing and other marketing expenses for the event.

Variable Costs are charges that relate directly to the number of people attending the event. The most common variable cost is the per plate cost of food being served at the event.

Example:
A chapter is holding a lunch event at a hotel. The cost to rent a laptop and projector is $300 and the hotel charges $200 for the room. Lunch cost per plate is $21.50. The hotel charges a 17% gratuity on the total bill. The 5% sales tax has been waived since the chapter is a non-profit organization. The speaker is local but charges a $100 speaker fee. The chapter plans to market the event by mailing flyers to all members and nonmembers in their database.

Fixed Costs:

Room Charge and Equipment ($500*1.17)	$585
Speaker Fee	$100
Speaker Lunch ($21.50*1.17)	$25
Printing Flyers	$25
Mailing Flyers	$185
Total Fixed Costs	$920

Total Variable Costs:

Lunch ($21.50*1.17)

$25

2) Setting the price
The break-even analysis can be done a number of ways but the best way to do it is estimate the number of people that will attend and then set the price per person based on that. First, determine the Total Cost of the event (Fixed Cost plus (Per Person Cost x Expected Number of Attendees)). Then, divide the Total Cost by the Expected Number of Attendees, as shown below:

Total Variale Costs:

Formula for Break-even:

• Number of people expected to attend:
  Base this number on historical results, but be conservative when setting this number. Use a number that can be realistically achieved. If you price the event according to this number but fail to draw that many attendees, you will lose money on the event. If you have a better turnout, you will make money on the event.
• Price per person:
  The price per person is the minimum you need to charge based on your number of expected attendees in order to break-even. In this example, you would need to charge at least $40.00 per person to break-even if you had 60 people attend the event. In this case, consider charging $40 for members and $45 or $50 for nonmembers. This will give you a little cushion if you have non-members attending. If your objective is not to make money but just break-even and you know that half the attendees will be members and half will be non-members, you could charge $35 for members and $45 for nonmembers and you would still break-even at 60 attendees.

3) Can your market support the price?
The break-even analysis is a tool for setting the price of the event, but you still need to make sure it makes sense. If you don't think your market will support a lunch at $40.00 per person, then you will need to find a way to reduce the cost so you can lower the price.

It is a good idea to do the break-even analysis when setting the menu for the event. Some entrees might sound really good but might not be worth the price. If you offer more than one option for lunch, set the break-even on the highest priced entrée. This will build a cushion into your numbers assuming some people select the lower priced entrée. For example, a vegetarian lunch option will usually cost at least $5 less per person but you will charge the same price regardless of what entrée is selected.

If you have a premier event that you know will get a good turnout, you could charge more. An example of this is the annual Automotive Industry Update—featuring local speakers who do not charge a fee—held by the Southeast Michigan Chapter. This is their signature event and is held each year at about the same time. Many bankers bring customers or referral sources to this event. They keep the cost low by doing a breakfast event that consists of a continental breakfast. The speakers are well respected in the industry and are happy to represent their companies in front of a large group. Because they are local, there are no travel expenses. The Chapter can charge between $60 and $85 per person for this event, depending on speakers and location. They usually price it to break-even at 60 to 75 people, but can draw somewhere between 100 and 150 people. They will usually make somewhere between $1,000 and $5,000 on this one event; most of the other events during the year will break-even.

For more information and for additional resources, please contact William Githens at bgithens@rmahq.org or 215-446-4124 or contact the Regional Manager for your area.