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Section/MAL/Region Finance Manual

TABLE OF CONTENTS

I. Purpose 2II. Scope 2III. Financial Responsibilities 2IV. Policies 3V. Financial Procedures and Records 4VI. Fund Raising and Development 12VII. Scholarships 16VIII. 501 (c)(3) Reporting 17

Appendix A – Financial Policies and Procedures Example #1 21Appendix B – Financial Policies and Procedures Example #2 22Appendix C – Investment Policy Example 23Appendix D – Program Plan Example 25Appendix E – E-Postcard Instructions (IRS Form 990-N) 27Appendix F – Financial Assessment Procedure 29Appendix G – SWE 501 (c)(3) Tax Exempt Letter 30Appendix H – Donor Letter Example 31Appendix I – Obtaining an Employer ID Number (EIN) 31Appendix J – Sample Expense Reimbursement Form 35Appendix K – Revision Page 36

Revision Date: January 17, 2011 1 Version: 1.0aApproved by Society Secretary on 06-30-11 of 36

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I. Purpose

This document was developed by the Society finance committee and provides information to help all membership groups manage their finances.

II. Scope

This document is a resource to all sections within the Society, both professional and collegiate, as well as regions and the members at large (MAL) organization.

III. Financial Responsibilities

A. Section/MAL/Region Treasurer

The responsibilities of the treasurer are as follows: Collect, safely keep, and distribute funds Sign checks Keep an exact accounting of all receipts and expenditures Prepare and submit the annual financial report to the Society Present a financial report at each meeting of the section executive council/MAL

council/region council, based upon the approved budget, and answer inquiries on financial matters

Assist in preparing the annual budget File annual e-Postcard or 990 tax forms. Assume other financial duties as assigned by the section/MAL president, region

governor or executive/MAL/region council, as applicable For Region Treasurers only: Present financial safeguarding information at the

Region Conference

B. Section/MAL President and Region Governor

The responsibilities of the section/MAL president or region governor are as follows: Review the budget and authorize the signing of checks or serve as the second

signature on checks as required by the Section/MAL/Region procedures Review and approve the annual financial report Oversight of section/MAL/region finances throughout the fiscal year Consult the bylaws and applicable manuals and procedures for additional

responsibilities

C. Section/MAL/Region Financial Assessment Committee

Guidelines for conducting a financial assessment are provided in Section V.C.2 and Appendix F. Financial assessments should be conducted annually, preferably at the start of each fiscal year by every section/MAL/region. Guidelines for when to conduct an assessment are provided in Section V.C.3. Note that an audit may be conducted only by a paid auditor. If using a paid auditor, it is recommended that the chair of the Society Audit Committee be the independent interface with the auditor.

D. All Section/MAL/Region Officers and Committee Chairs

The responsibilities of the officers and committee chairs are as follows:


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Provide input to the annual budgeting process Approve the budget developed by the treasurer Provide appropriate documentation for income received and any reimbursement

requests Expend and commit funds only in accordance with the approved budget and

applicable procedures

IV. Policies

A. Financial Policy

Each Section/MAL/Region should develop a financial policy which addresses the following topics:

Who is assigned responsibility for which budget items Whether or not one person may combine the various budget amounts for which

that person is responsible and simply manage the total How much over budget a person is permitted to go without approval by the

section executive council/MAL council/region council How to get reimbursed, including the type and level of documentation required The types of situations for which advances may be requested, including details

on the method for requesting an advance, the documentation required, when the balance is to be repaid, etc.

The size of event that requires a separate budget

Sample policies and procedures are provided in Appendix A and Appendix B.

B. Investment Policy

The finance committee recommends that each section/MAL/region develop an investment policy. This policy establishes the guidelines within which the treasurer, finance committee, and fund development committee may operate. The section executive council/MAL council/region council should separately approve any actions that go beyond the established guidelines. This policy may specify the types of investments that are permitted and the amount or percentage of assets that may be in various types of investments. Note that the Section/MAL/Region should not be investing money just for the sake of investing money. There should be a stated purposed for these funds. A sample investment policy is provided in Appendix C.

C. Program Plan

A program plan to document a multi-year strategy stating which programs will be run in what years and how they will be funded should be developed. In particular, a section/MAL/region with a large donation or income from a conference/event overage should develop a program plan in order to document intentions on how the funds will be used.

Some examples on program funding mechanisms include: All costs of the program to be separately raised All costs of the program to be funded entirely from assets Section/MAL/region assets to be used as matching funds so that fundraising only

needs to cover X% of the cost of the program

A sample program plan is provided in Appendix D.


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V. Financial Procedures and Records

A. Start of Fiscal Year

1. Financial Records to be Provided to the New Section/MAL/Region Treasurer

The following items should be provided to the new treasurer at the start of the fiscal year:

Copies of previous two annual financial reports filed with the Society, including EIN

Financial institution(s) name, local branch, address, account numbers and on-line access information (the new treasurer should change the password)

All financial records from the previous year, including e-Postcard log-in (if applicable)

List of currently authorized check signers Copy of budget (if approved in the prior fiscal year) Check books and registers Tax exempt paperwork, if applicable

2. Signature Cards

Financial institutions typically require signature cards for the people who are authorized to sign checks. They can be obtained from the financial institution and should be signed by the section/MAL/region treasurer and president/governor. They should be returned to the financial institution along with a letter from the section/MAL/region secretary providing the names and contact information.

3. Financial Institution Statements

The Section/MAL/Region Treasurer must provide a change of address, if required, to each bank, credit union, savings and loan, or Investment Company in which funds are held.

4. Budgeting

The budget is simply a plan of the expected sources of income and expenses for the year. It does not need to be complex. It should be drafted during the last quarter of the previous year with input and approval from the incoming leadership and approved according to the section/MAL/region bylaws. As the year progresses, the plan may change and the section executive council/MAL council/region council may amend the budget accordingly. However, at any point in time, the agreed upon budget should indicate the authorized uses of the funds to meet the plan. Budget items will reflect the ledger accounts.

a. Net vs. Gross Amounts

The budget should be based upon all expected income and expenses and not just the net amount (income minus expenses). For any event or project, budget the income you expect to receive as well as all expenses. You will be able to determine a net gain or loss, but you need to track the gross numbers for tax purposes.


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b. Sales

Sales are income for any items or service for which a fee is charged. Track the total gross sales dollars as well as the cost of the items or service. This (cost of the items or the service) can be referred to as costs of goods sold.

Since SWE is an educational, nonprofit organization, the government expects us to conduct activities related to our mission. If the activity is not related to our mission, such as T-shirt sales or advertising, then it is considered unrelated income. If unrelated income of $1000 or more is received on a regular basis, then IRS Form 990T must be submitted. If the Section/MAL/Region has a policy that states income from something like t-shirt sales is specifically for a certain program, then it does not count as unrelated income. Likewise, if the Section/MAL/Region has a policy that states that advertising income is specifically for a certain program, than it would not count as unrelated income. A once a year event or activity may not be considered “regular.” It is best to consult a certified public accountant for clarification on a specific item.

Sales tax varies by state; therefore, you are responsible for obtaining your own state sales tax exemptions. If you don’t have an exemption, you may be required to pay sales tax on items you sell. Whether you are tax-exempt or not, you are required to collect sales tax on taxable items you sell.

Having a SWE logo on a sales item does not automatically make it related income. Guidelines for use of the SWE logo and electronic versions of the various logos are available on the SWE Communities and on the Society website under the SWE Governance Documents section of the Member Services page.

c. Meetings/Workshops/Events

Officer and committee chairs should provide the treasurer with budgets for meetings, workshops, and events. The treasurer should make sure they are provided with gross income numbers and total costs. If the meeting or event is a fundraiser, then this should be publicized and the amount desired included in the charge to attend. For example, if the dinner cost is $30 per person and $5 per person is the desired amount to be raised for the scholarship fund, then attendees need to be charged $35 to attend, at a minimum. It is appropriate to inform attendees how of much of the cost is tax deductible.

Do not forget about minimum attendance requirements to break even. Room charges may be independent of the number of attendees. There might also be cancellation charges to consider. Also, do not forget to ask about and include gratuities and taxes. Often prices to attend should vary, with non-members being the most expensive, professional members next, and then possibly retirees, collegiate members, and unemployed. You do not always have to break it down this way, however, there is the obvious encouragement to become a member and maintain membership if there is a reduced cost to attend meetings and events.

Each meeting or event does not require a separate line item in the budget or a separate budget. Each section/MAL/region should decide what minimum value indicates the need for a separate budget or separate line item on the budget. A starting point could be 10% of the total budget for each special project.


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d. Membership Dues Rebates

Society headquarters issues membership dues rebates twice a year. Rebate #1, which is for the current fiscal year (July 1 - November 30 dues), is generally mailed to sections, MALs, and regions on January 31. Rebate #2, which is for the previous fiscal year (December 1 - June 30), is mailed to professional sections, MALs, and regions by August 15 and to collegiate sections by September 15. Sections and MALs are rebated 20% of the net dues collected from their respective members. Regions are rebated 2% of the net dues collected from the professional members assigned to the region. Life and corporate-sponsored members are rebated as though those members paid full professional dues.

The requirements for receiving membership dues rebates are outlined in the Record of Policy and Interpretation (P&I) document. The P&I document can be found on the on the Society website under the SWE Governance Documents section of the Member Services page. The P&I document also provides details on how to request a replacement rebate check.

To receive a rebate check for a given fiscal year’s dues payments, the financial report for the previous fiscal year must have been filed with Society headquarters, the section/MAL/region must have an EIN separate from that of the Society and the board of trustees if the section/MAL/region has any interest-bearing accounts, and the president/governor or treasurer must be a member in good standing with the Society. Any section which was not chartered during the previous fiscal year is not required to file that financial report to receive its rebate.

If a rebate check is not cashed within six months, the check will be reissued if a request is made in writing to the Society treasurer. If the check is returned with the request, a full check will be reissued. If the check is not returned with the request, any charges incurred by the Society for such items as check cancellation will be deducted from the reissued rebate check. Checks will be reissued for up to one fiscal year in arrears.

5. Accounting

Sections/MALs/regions can select from two forms of accounting – cash and accrual. Either method may be used as both track income and expenses; it is suggested that the choice be based on the assets/income of the Section/MAL/Region. It is recommended that Sections/MALs/Regions that have over $25,000 of income per year or have assets totaling $10,000 or more utilize the accrual method. Sections/MALs/regions with assets/income less than these values would be best served utilizing the cash method.

In the cash method, income is counted when cash, check, or credit is received and expenses are recorded when actually paid. This is real-time cash flow. When a check is received, it becomes a cash receipt. Expenses are recorded when the bills are paid.

With the accrual method, transactions are counted when they happen regardless of when money is actually received or paid. So, income is recorded when it is earned, not received. Similarly, expenses are noted when actually spent, not when the bill is received and paid. It is not necessary for cash to be exchanged.

Many SWE entities follow a modified accrual method. They primarily keep their books on a cash basis, but incorporate accounts payable and accounts receivable as needed


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during the year. For example, the treasurer may set up a receivable as a reminder that Sue owes $xx for the meeting at which she forgot to bring her checkbook. With the modified accrual method, all known payables and receivables (and the associated expenses and income) are recorded before the books are closed for the fiscal year.

Income – money received from such things as donations, sales, interest, dues rebates, meeting and conference overages; also know as gross income, gross receipts, or revenue.

Expenses – money paid to support meeting and conferences, newsletters, etc.

6. Financial Reports

All sections, regions, and the MAL organization are required to complete and submit financial reports to the Society on an annual basis. The financial report summarizes the sources and uses of section/MAL/region funds. A financial report must be submitted even if there are zero transactions for the year.

The financial report is prepared by the section/MAL/region treasurer, reviewed by the section/MAL president or region governor, and submitted to Society headquarters no later than July 30. The on-line reporting tool should be used, if possible. Excel spreadsheet versions of the financial report forms with instructions are available on the Society website under the SWE Governance Documents section of the Member Services page. It is recommended that the spreadsheet be used in preparation for completing and submitting the forms using the on-line reporting tool. A copy of the completed spreadsheet should also be saved for your records.

This report must be submitted within the following fiscal year or the membership dues rebate will be forfeited.

B. Throughout the Year

The treasurer must keep the books in good order and up-to-date. This includes tracking different monies separately. Deposits must be made promptly and bills in a timely manner. The books should be reconciled monthly against bank account statements. Remember to post items such as service or check fees (as expenses) and interest received (as income) from the financial institution statements in the journal or ledger.

The treasurer is also responsible for ensuring donated money is spent in the “spirit” of the intention of the donation. As the budget and other financial statements are sensitive documents, this information be safeguarded by the treasurer, but still must be accessible to section/MAL/region members. It should be included in the section/MAL/region procedures that the budget and other financial information can be made available to section/MAL/region members upon written request to the treasurer.

1. Journal

All sections/MALs/regions must keep financial records. The basic record is a journal in which the treasurer documents receipts and disbursements in the order in which they occur. Quicken is a popular program used for tracking financial transactions. An Excel spreadsheet may also be used to maintain this information.

a. Income


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All income must be recorded in the journal, showing the income account for which the item is received. Copies of any documentation received with the income should be retained. Don’t forget to record items such as interest received from the financial institution.

b. Expenses

All expenses must be recorded in the journal. Remember to record any expenses such as service or check fees that are deducted by the financial institution. Reimbursement requests should specify the budget line to which the expense is to be charged. It is highly recommended that receipts documenting the validity of the payment should accompany all requests for reimbursement. Requests received without any supporting documentation should be questioned. See Appendix J for a sample reimbursement request form.

2. Ledger

The second type of record is the ledger. The ledger provides a means of grouping sources of receipts and recipients of disbursements. Make it easy for your treasurer by using the same line items in your books as are in the financial report form. If your section/MAL/region requires more detail in its accounts, group the line items so that the subtotals can go directly into the report.

3. Balance Sheet or Statement of Financial Position

A balance sheet or statement of financial position is a “snapshot” of the section/MAL/region’s finances for a moment in time. It measures the “worth” of the entity’s finances. The treasurer should always include a balance sheet with each report issued to the executive council/MAL council/region council.

The first half of the sheet will list assets. Current assets include cash and easily liquidated savings, also known as cash equivalents, such as securities, money markets, and certificates of deposit (CDs). Accounts receivables are income expected from others for goods or services. Accounts receivable have become a larger portion of assets as use of credit cards has increased. Other assets include inventory of items owned including T-shirts and other fundraising items that are held by the section, but have not yet sold. There are also long-term assets, such as fixed assets and depreciation. Long-term assets are not typically held by sections/MALs/regions.

The other half of the sheet is for liabilities. Accounts payable include outstanding bills and obligations for labor or materials to others. The total of the liabilities is subtracted from the total assets giving the total equity or net worth of the section/MAL/region at that time. If the section/MAL/region has any restricted, temporarily restricted, or designated funds, the equity balance for each of those funds must be identified separately from the unrestricted equity of the section/MAL/region.

The balance sheet must be updated annually as part of the financial report and should be maintained throughout the year.

a. Measuring and Valuing Inventory

Sections/MALs/regions sometimes have SWE-related products that they sell to


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raise money. Some of these in the past have included coffee mugs, banners, jewelry, portfolio books, and T-shirts. These items are typically purchased in bulk and paid for at one time, although income from selling them comes into the treasury over a longer period of time, sometimes over a period of years. Sections/MALs/Regions should value the inventory for reporting purposes at the amount they paid for the items—the cost of the items when purchased. If there is a question about whether these items are appreciating in value over the time period they are held before being sold (e.g., expensive jewelry), the section/MAL/region treasurer should contact the Society Treasurer or the Finance Committee Chair for guidance.

b. Receivables and Payables

When the section/MAL/region receives a promise of income, it can record this as an account receivable. The treasurer would show the item as income when the promise is received and balance this by adding an account receivable under the asset section of the balance sheet. Then when the check arrives and is deposited, the treasurer would reduce the account receivable by the amount of the check and increase the bank account balance by the same amount. Receivables can come from several sources. A company might send a letter indicating it will send a check. A member might attend a dinner meeting but forget to bring a check.

Payables work similarly. When the section/MAL/region commits to spending the money, the section/MAL/region treasurer could record the item as an expense and balance the expense by creating an account payable under the liabilities section of the balance sheet. Then when the check is written, the treasurer should reduce the account payable by the amount of the check and decrease the bank account balance by the same amount. Payables can come from several sources. One of the most common payables is for scholarships, such as when the scholarship winners are selected in one fiscal year and the checks written in the next fiscal year. Another example is expenses incurred for an event, for which a company will send a bill at a later time. This could occur if there is a commitment to a hotel to use their space for an event for which a detailed budget is maintained.

Receivables and payables will often be shown on the annual financial report form in order to balance income and expense for the current year with the actual bank account balances.

4. Bank Accounts and Investments

Most sections/MALs/regions keep working cash in a checking account at a bank, savings and loan, or credit union. The assets that will not be required for a month or so should be earning interest or be otherwise invested. This is an additional source of income. Before setting up or adding any type of account for SWE funds, collegiate sections should check with their university to ensure that they follow any rules or requirements of that institution.

In order to open an account, you will need an Employer Identification Number (EIN). This is the equivalent of an individual's Social Security number on personal accounts. Under no circumstances should the Section/MAL/Region use the Society's EIN or a member's Social Security number. If you do not have an EIN, you can apply for one


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online via the IRS website at http://www.irs.gov/businesses/small/article/0,,id=102767,00.html. The IRS will issue you a provisional EIN instantly and a letter confirming the EIN number will be mailed to the address you provide or you can select to receive the letter via email. Refer to Appendix I for more information on obtaining an EIN number.

All bank and investment accounts should have at least two, and preferably more, officers authorized to sign checks. This will ensure that the Section/MAL/Region can continue to pay its bills when the Section/MAL/Region Treasurer is not available. It is not necessary, but highly recommended, to require two signatures on the checks. It is important that only specified officers may sign.

Additionally, it is recommended that the statements from all financial institutions be sent to and reviewed by at least one additional officer, beyond the treasurer. This helps to maintain financial oversight. Alternatively, another office could spot check on-line statements at all financial institutions to ensure that the amounts reported by the treasurer on the balance sheet are actual of the accounts.

a. Types of Funds

Permanently restricted – income from trust and bequeathed funds designated for a specific purpose and is independent from the Section/MAL/Region operating budget. The principle balance of the contribution will remain an investment forever, and the Section/MAL/Region will utilize the interest and investment returns.

Temporarily restricted – income from donations that are pre-specified for a program/event and roll over from year to year until the monies are expended or otherwise released from restriction. These are donor-imposed restrictions that can be fulfilled in one of two ways: passage of defined period of time (time restriction) or by performing defined activities (purpose restriction). An example is annual scholarship donations.

Designated – income from the operating budget specified by the section executive council/MAL council/region council for special purposes such as travel to conferences or collegiate assistance.

Restricted accounts must be accounted for separately from unrestricted accounts. If significant amounts of restricted funds are involved, the section/MAL/region may have a board of trustees or an investment committee to manage large investments. Please refer to Section VIII regarding tax implications and/or paperwork requirements for restricted accounts. 5. Reports

Each section/MAL/region will decide how often the treasurer will report to the officers and to the members on the financial health of the section/MAL/region. It is recommended that the treasurer report monthly (or at least at every section executive council/MAL council/region council) to the officers on income and expense relative to the budget and on income relative to expense. It is also recommended that the section/MAL/region treasurer report at least annually to all respective members on the same items.


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C. End of the Year

A draft budget should be prepared and approved during the last quarter of the fiscal year with input from the incoming leadership. The books will be closed at the end of the fiscal year (June 30) and the financial report completed and submitted to Society headquarters by July 30.

1. Records to be Archived

The following items should be retained for seven years and then destroyed:

General ledger and journal Officer travel records/reimbursements Bills and receipts including disbursements to members and disbursements from a

Program Development Grant Accounts receivable records Investment records (seven years minimum or longer if needed to establish cost

basis for the sale) Grant records and records on any other temporarily restricted funds received

(seven years minimum or longer if any of the funds remain) Bank statements General correspondence Financial assessment reports

The following items need to be retained permanently:

Year-end financial reports submitted to the Society Annual treasurer’s reports in relation to annual budgets IRS 990 forms EIN and SS-4 request forms Copy of the Society’s 501(c)(3) Group Exemption Determination Letter from the

IRS (circa 1992); copy of Section/MAL/Region’s request to be included in Society’s 501(c)(03) Group Exemption Determination Letter; state income and/or sales tax exemption paperwork, if applicable; Section/MAL/Region incorporation paperwork, if applicable

Records of any permanently restricted items (such as donor letters) Financial or investment policies Audit reports

2. Assessment

Every section/MAL/region should conduct a yearly financial assessment to ensure that the accounting of the entity is objective, fair, complete, and accurate. An assessment is a detailed examination of the financial statements and the financial records of the section/MAL/region. Assessments determine if the accounting procedures conform to best practices used by other nonprofit organizations. The specific objectives of the assessment will address one or more of the following general management objectives:

Safeguard the assets of the organization. Ensure the accuracy, reliability, timeliness, and integrity of the accounting and

operational data. Promote operational efficiency.


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Ensure compliance with managerial policies, laws, regulations, and sound business practices.

Each section/MAL/region should establish a financial assessment committee to perform the yearly financial assessment. The committee shall include:

Chair (must be SWE member in good standing), appointed by the section/MAL president or region governor.

Two SWE members, minimum, who are generally appointed by the chair of the assessment committee with approval of the section/MAL president or region governor.

Members who are involved in the management of the finances (i.e. the section/MAL/region treasurer, section/MAL president, or region governor) can not be members of the financial assessment committee.

The financial assessment committee will meet as needed to address matters on its agenda, but not less frequently than once a year. Refer to Appendix F for information on conducting a financial assessment.

3. Audit

Every Section/MAL/Region should have an audit at least every 3-5 years if they receive more than $5,000 in income or have more than $20,000 in total assets. Annual audits are recommended for sections/MALs/regions receiving more than $10,000 in income or having more than $50,000 in total assets.

A paid auditor must conduct the audit in order for it to be called an audit versus an assessment. Members of the Society Finance and Audit Committees are available to answer questions about audits.

VI. Fund Raising and Fund Development

A. Fundraising

Almost all sections/MALs/regions do some type of fundraising. It is important that no activity jeopardize the Society's tax-exempt status. SWE is exempt under Internal Revenue Service code section 501(c)(3), educational service organization. If your Section/MAL/Region is incorporated, it is still under charter to the Society and must comply with the rules.

This does not mean it is inappropriate to raise funds for activities. A well-planned funding program will provide resources for the activities that support the Society's goals. The funding activities should be in good taste and in keeping with the professional image of the Society. They do not require board of directors’ approval as long as it is made clear that they are the activities of the section/MAL/region, and not the Society. Fundraising is a highly individual matter. When your section/MAL/region finds a successful method, kindly share it with others in SWE.

There are many successful ways to raise funds. These include:

Direct solicitation of local industry Direct solicitation of members A surcharge on dinner meetings Registration fees at seminars and workshops


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Flea market or yard sales of donated materials Product sales: mugs, T-shirts, stationery, for example Auction of members' services: car washing, gourmet meals, shopping, etc. Newsletter advertisements (these may cause you to be unable to send your

newsletter electronically or to mail your newsletter at nonprofit bulk rates, however)

Corporate matching funds for donations or fund-matching for volunteer time

When you are fundraising, a donor may ask you to provide proof that a donation is tax exempt. Refer to section VIII of this manual for details related to donor acknowledgement. Also, please note that while the Society has a federal income tax exemption, each section/MAL/region must request to be included in SWE’s federal income tax exemption. You also will need to determine whether you need to apply for state or local sales tax exemption.

When you are fundraising you must be very careful about claiming tax exemption for your donors in any announcement, invitation, or notification of your funding effort. A taxpayer who buys items donated to a bazaar cannot claim a charitable contribution, even though 100 percent of the money goes to the charity. You should NOT put in writing (invitation, flyer, newsletter) that the sale or event admission is tax deductible. If your publicity for an event or sale claims the donation will be tax deductible, you may be held liable if a donor claims a deduction and the IRS disallows it. Internal Revenue Service publication 1771, Charitable Contributions-Substantiation and Disclosure Requirements, is an example-packed pamphlet on this issue (You may request a copy of the publication from the IRS or download it from the IRS website). Every donor should receive a thank you letter. See Appendix H for an example thank you letter. Any donor that gives $250 or more MUST receive an acknowledgement letter confirming the gift. Refer to section VIII of this manual for additional information.

Some states require registration yearly or every other year in order to solicit funds in their state. States can charge several hundred dollars for this registration. The fee can vary depending on your organization’s revenue or assets. It is best to be aware of state laws governing tax-exempt organizations. State corporate law usually governs these charitable solicitation laws. Information can be obtained from the Secretary of State in your state. The only exemption from this registration is charities raising less than a certain minimum amount set by the state. This minimum value varies by state, so be sure to verify the particulars for your state.

The section/MAL/region needs to keep files on donations with the donor’s name and address, the year and the gift. These are confidential records that are not shared except on yearly lists of donors. You may want to publish gifts in categories such as under $99; $100 to $499; $500 to $1000 to protect confidentiality of the donor. If a donor requests anonymity, it is important to honor that request. Donor records can be as simple as cards kept in a file card box and passed from treasurer to treasurer. Sometimes the name of the person who asked for the gift is also on the card.

Public support is one of the things the IRS looks at to decide if you receive tax exemption as a 501(c)(3). To be considered a “public charity,” one third of a charitable organization’s income must come from the general public under 509(a)(1). These are direct donations for which no good or service of significant value can be exchanged. Donations from corporations, foundations, individuals, and government grants qualify as public support. Fundraising events are not solely public support. Sales of flowers,


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dinners, and other events have goods and services exchanged at them. The only portion of event income that can be deducted are for direct donations or for the net income from the event after all expenses and fair market value of prizes and favors are deducted. Tickets must be printed to tell the attendee how many dollars they can claim as a tax write off. The section/MAL/region will have to describe its events in its Form 990 Return of Organization Exempt From Income Tax if it meets the reporting requirement. The Internal Revenue Code provides exemption in Section 501(c)(3) for organizations, funds and foundations organized and operated exclusively for religious, charitable, scientific, literary or educational purposes, but only if no part of its net earnings of which inures to the benefit of any private shareholder or individual and no substantial part of income is spent on influencing legislation or for any political campaign on behalf of any candidate for public office. Scientific and educational organizations enjoy most favored tax status. This means that they are free from paying federal income taxes on revenue related to their exempt purposes. They have other advantages:

Contributions to the organization qualify for tax deductibility by donors as charitable contributions.

Scientific and educational entities qualify for favorable postal rates. Local sales and real estate taxes are often not applicable to scientific and

educational associations.

Sections/MALs/regions should consult their lawyers about local sales tax laws. Likewise, some local communities and states have laws about raffles and games of chance, which require purchase of a license to hold such events.

To obtain and retain tax-exempt status as a scientific or educational association, the organization must be organized and operated exclusively for one or more public, rather than private, purposes. An association must also ensure that no substantial part of its income is unrelated to its tax-exempt purposes or it could jeopardize its favored tax-exempt status. The organization must pay taxes on unrelated business income called UBIT (unrelated business income tax). To be substantially related an activity must contribute importantly to an exempt association’s purposes and not be aimed solely at an association’s goal of generating income.

B. Fund Development

Fund development is long term funding to build a solid base of support for the organization. The organization builds relationships with different groups of loyal donors who give consistently and receive benefits in the process of giving. Fund development depends on one-on-one (in person) solicitations. It depends on research into what project or program the donor wants to give to and what recognition and benefits the donor wants. It involves input from both internal donors and external donors. Development is not last minute. It is integrated into the long-term strategic planning system of the organization.

C. Grants

Grants are the lifeblood of many nonprofit organizations, especially if you have long-term relationships with major corporate funders. The size of grants can be modest sums for local organizations to multimillion-dollar grants for major national organizations. There are myths surrounding grants. The first myth is that they are difficult. They are not


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difficult if you can write clear sentences and follow what guidelines the corporation has for giving money. The second myth is that they should be the most important fund development tools of the organization. This is simply not true. 87% of all donations in year 2000 in the United States came from individuals. Corporations gave only 5% of all donations. Foundations gave only 11%.

So, where should you spend most of your time raising money?

1. Society Program Development Grants

The Society raises money for section/MAL/region projects. You can apply monthly to the Program Development Grant (PDG) Committee for seed money for programs partnering with K-12 schools, science museums, Girl Scout Councils, Girls, Inc. and other community agencies serving youth and supporting the society’s mission. Sections/MALs/regions have applied for leadership development for their members and for diversity conferences and outreach programs. The Exxon/Mobil Foundation has provided support for these grants. It is much easier for you to raise matching grants once the seed money is promised from other local corporations, government and foundations. Check the Society website for the latest program development grant opportunity deadlines guidelines and applications.

Treasurers need to set up funds in their accounting software to track the uses of the Society’s Program Development Grants and other grants. While the funds may be kept in the entity’s existing checking or savings accounts, the funds must be accounted for separately and cannot be co-mingled with general operating income or expenses because the section/MAL/region will need to file final reports to the foundation and to the Program Development Grant Committee to receive their final grant payment. If all of the grant funds provided are not used for the designated program(s), the unused balance must be returned to Society Headquarters, ATTN: Program Development Grant Committee. Be sure to include the grant number on the check.

To learn more about how to complete a grant proposal and access related documents, please visit the Program Development Grant (PDG) Community in SWE Communities.

2. Employee Matching Funds and Cause-Related Marketing

There are several other sources of money locally. Most corporations have some type of employee support for their contributions or volunteer time. Some corporations will donate to nonprofit organizations where their employee volunteers. Members can often apply for expense money if they are a committee member or officer of a section/MAL/region. They can also request support for an engineering day they are involved in or ask for local support of a project with a school. If a member gives a donation, they also may have a matching gift program at their company (e.g. If the member gives a $500 contribution, their corporate employer will match it with another $500).

Finally, cause related marketing takes another form and is considered earned income rather than a donation. If the Section/MAL/Region has a career fair for its members, a corporation may want to give out its products and get press attendance as a sponsor to develop its good will in the community. For example, a company may want to set up its computers at the career fair and have attendees who attend try them, and refer the company to their employers so the computers can be sold to the company. You could earn money doing this. The only caution for the Section/MAL/Treasurer is that this support is a not a donation and is taxable, like an advertisement. Check your state’s law


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on these types of income. You could have to pay taxes.

VII. Scholarships

A. Tax Policies

IRS Publication 970, Tax Benefits for Education, describes the federal tax policy regarding scholarships. In summary, the policy holds scholarships designated for tuition, books and fees or portions of scholarships used for tuition, books and fees as tax-free. Any part of a scholarship used for purposes other than tuition, books and fees is taxable. It is the responsibility of the student to know her/his tax liabilities.

Individual state tax policies may differ and should be consulted as appropriate. It is recommended that a statement be included in the scholarship award letter advising the recipient to consult applicable state tax regulations.

B. Endowed Scholarships

SWE’s endowed scholarship program is managed by the board of trustees (BOT) and is part of SWE-EFI (Society of Women Engineers Endowment Fund Inc.). An endowment is when a certain amount of money is donated to a permanent account. The income from the investment of the donation goes to fund the scholarship stipend and any administrative fees. The BOT currently requires a minimum donation of $25,000 for each $1000 annual scholarship stipend that is awarded. Each additional multiple of $25,000 will each increase the stipend by a $1000. Please note that these donation levels and the resulting stipends are current as of FY11. Details on the current minimum donation and amount of the annual scholarship stipend can be found on the “Board of Trustees Shared Community” in SWE Communities.

Smaller donations can be made to the principal, once the scholarship has been established, which will grow the scholarship over time. The funds are managed and distributed by the BOT, however, the section/MAL/region or individual who establishes the scholarship sets the criteria for awarding the scholarship such as grade point average, program of study, location of awardees, etc. The endowment is irrevocable; however, the donation establishes a permanent scholarship that can grow over time depending on the investment climate. Scholarships may also be locally selected if the section/MAL/region prefers to do so.

For more information on endowing a scholarship, please contact the Board of Trustees Scholarship Liaison at [email protected].

VIII. 501(c)(3) Reporting

A. SWE Tax Exempt Status

1. Why Seek Federal Tax Exemption

The Federal Tax Code makes provision for certain philanthropic organizations to be exempt from federal taxes. The Society of Women Engineers applied for and was granted this tax-exempt status in 1960. In 1992, the Society’s tax exempt status was extended to cover sections/MALs/regions provided they have their own EIN and request the exemption status. Requests for inclusion in SWE’s tax exemption should be forwarded to SWE headquarters, ATTN: Executive Director. The form for this request is


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the Tax Exemption Request Form and is posted on the SWE Governance Documents Community area of the website, under Tax Information. Individual state tax codes make various provisions for similar types of tax exemptions. These provisions in state and federal tax codes make it possible for the Society and its sections/MALs/regions to be the recipient of charitable donations on the part of corporations, foundations and individuals; however, because of the wide diversity in state tax codes, each section/MAL/region must pursue these separately.

2. Annual IRS Reporting

All sections/MALs/regions with less than $50,000 in income (gross receipts) for the year or during any period where the three year average of income falls below $50,000 are required to file an e-Postcard (Form 990-N). This income limit is in effect for tax years ending on or after December 31, 2010. Sections/MALs/regions that have a three-year average income greater than $50,000 may be required to file IRS Form 990 or IRS Form 990-EZ. If your section/MAL/region falls into this category, it is recommended that you contact a tax professional for assistance.

In applying the “$50,000 or less test” (see page 2 paragraph B.14.c.3 of the 990/990-EZ instructions) you must include all income from all sources (this includes interest, capital gains, and dividends from bonds, mutual funds or savings accounts). The same is true for the two previous years as you compute your average gross receipts for the three-year period. If your average gross receipts exceed $50,000, averaged over a three-year period, then you must file a Form 990 or a Form 990-EZ. If the gross receipts for the current year are < $100,000 and the total assets at the end of the year are <$250,000 you may file a 990EZ. If you exceed these limits you must file a Form 990. Refer to IRS Publication 557 for additional information.

3. IRS E-Postcard

The Pension Protection Act of 2006 (PPA) includes a number of provisions applicable to the tax treatment of non-profit entities. The most important change affecting SWE sections and other small nonprofits is an annual tax reporting requirement applicable to all nonprofit entities. This reporting requirement is commonly called the “e-Postcard”, because this short-form return may only be filed electronically; the official name of the filing form in Internal Revenue Service Form 990-N.

Exceptions to the annual e-Postcard requirement for small nonprofits include those organizations that file the full IRS Form 990 or 990-EZ (section’s gross receipts exceed $50,000 as of December 2010) and subordinate organizations (in other words, sections/MALs/regions) that are covered by their superior organization. SWE does not cover any of its subordinate units; however, some colleges and universities may cover collegiate sections.

Before the PPA, most tax-exempt organizations with less than $50,000 in annual revenues were exempt from any annual filing requirements. Now, however, virtually all tax-exempt organizations must file annually.

There is a lot of confusion with regard to tax-exempt status. Many SWE sections/MALs/regions have obtained a tax identification number (EIN) in order to open a bank account, but that does not indicate that the IRS has approved them as a tax-exempt nonprofit. This is why all SWE sections/MALs/regions, except for collegiate sections that are covered under their college or university umbrella, are asked to file as a subordinate organization under the SWE group tax exemption.


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The e-Postcard requirement helps the IRS maintain up-to-date information on small nonprofit organizations (like contact information).

The e-Postcard filing deadline is the 15th day of the fifth month after the end of the entity’s fiscal year. For SWE entities, this equates to a deadline of November 15.

Consequences of failure to file the e-Postcard for three consecutive years include loss of tax-exempt status. The IRS may then choose to treat the organization as a business entity with income treated as business income. The organization would also face potential penalties for failure to file, even though the organization would not owe any tax.

In order to file the required e-Postcard you must first determine if your section/MAL/region already has a unique EIN and get one if it doesn’t. Once the unique EIN is obtained, confirm that the entity is covered by the SWE group tax exemption and get covered if not already. Refer to Appendix I for additional information on obtaining an EIN and obtaining coverage under the SWE group tax exemption.

Filing an E-Postcard:

The easiest way to determine the owner of an EIN is to look it up online (http://www3.knightfoundation.org/apply/letter/ein_lookup.aspx). Please note that in order for the EIN to be unique to your section/MAL/region it must have a unique identifier in its name. If the EIN you enter returns “Society of Women Engineers” with no reference to your specific entity then you will most likely need to request a new EIN that is specific to your SWE entity.

To learn more about the IRS e-Postcard requirement and electronically file your e-Postcard (IRS Form 990-N), you will need to follow the instructions on the IRS website (http://www.irs.gov/charities/article/0,,id=169250,00.html). Please note that the e-Postcard is submitted through a third party website. Refer to Appendix E for detailed instructions on filing an e-Postcard.

4. IRS Form 990

Summarizing from the 1992 Determination Letter - if an organization receives a Form 990 package in the mail, they should file the return even if their gross receipts do not exceed the $50,000 minimum. If they do not meet the filing requirement, they should simply attach the label provided, check the box in the heading to indicate that its annual gross receipts are normally $50,000 or less, and sign the return. This will allow the IRS to update their records to show that the organization is not required to file and to delete that entity from the list of organizations that will receive Form 990 packages in future years. The IRS sends the 990 packages based on data sent to them by SWE headquarters 90 days before the end of the fiscal year. It is very likely, therefore, that the packages will be sent to the previous fiscal year’s treasurer or president/governor.

5. IRS Form 990T (Unrelated Business Income)

A form 990T is required only if the organization’s gross income from unrelated businesses is $1000 or more (Reference: IRS Publication 598 Tax on Unrelated Business Income of Exempt Organizations).

Gross income is defined as gross receipts minus the cost of goods sold. Unrelated business income is defined as the income from a trade or business

that is regularly carried on by an exempt organization and that is not substantially


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related to the performance by the organization of its exempt purpose or function, except that the organization uses the profits derived from this activity.

The SWE exemption is based on our being organized for educational purposes. If your section/MAL/region has gross income of $1000 or more from activities not substantially related to educational purposes such as the sale of T-shirts, SWE memorabilia, hotdogs, newsletter advertising, etc. you must file a 990T and pay the appropriate tax. The emphasis should be on the regularity of the activity. If you make income from food sales at an annual event, this is not considered regular activity. If you receive T-shirt income from sales at a monthly meeting, it is considered unrelated income. Advertising income, regardless of the regularity issue, is considered unrelated income. If the section/MAL/region has a policy that states income from something like t-shirt sales is specifically for a certain program, then it does not count as unrelated income. Likewise, if the section/MAL/region has a policy that states that advertising income is specifically for a certain program, than it would not count as unrelated income.

6. Donor Acknowledgement

When you receive donations over $250, you will need to send an acknowledgement letter to the donor. Some companies will request a form W-9 and will send you a form 1099 with a copy to the IRS. This is their way of staying straight with the IRS about their charitable donations. Instructions for completing the W-9 form and an electronic copy of the form can be found on the IRS website at www.irs.gov. Sections/MALs/regions should fill in their name and address at the top of the form and complete Part I. The treasurer or president/governor should sign Part II of the form before sending it to the requesting donor.

The instructions for IRS Form 990/990EZ, under section L. Contributions, set out a requirement for tax-exempt organizations to prepare an “acknowledgement to substantiate contributions” for all donors who contribute $250 or more. In the case of scholarship donations for which no goods or services were provided to the donor, the acknowledgement can be as simple as the example in Appendix H. There are several requirements the acknowledgement must meet:

Be written Be contemporaneous ( be timely for the donor to use in his/her tax return

preparation) State the amount of any cash the organization received State whether or not the organization gave the donor any goods or services for

the donor’s contribution.

The acknowledgement for cases where goods or services are provided to a donor is a bit more complicated. The process involves establishing a value for those goods or services above a threshold of “goods or services of insubstantial value or certain membership benefits”. Consider for example that you ran a golf tournament and the participants paid $300 for the event. If they received $100 in green fees, cart fees and food, you would have to provide data in the letter, which acknowledges a good faith estimate of the goods or services received, and the donor would subtract that amount when claiming a tax deduction.

Sections/MALs/regions that have the more complex donation situations should seek advice from a CPA.


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B. IRS Forms and Reporting Requirements

The Society was incorporated in 1952 in the District of Columbia as a nonprofit, educational, service organization. It is listed in the Internal Revenue Code of 1954 (and subsequent years), Section 501(c)(3). Because the Society conducts business through headquarters in Chicago, IL, SWE is also exempt from state and local sales and use taxes in Chicago and in Illinois.

The Society must pay taxes on all unrelated income over $1,000. Unrelated income is income not directly related to activities supporting the goals of SWE, such as the Society's publication, SWE Magazine of the Society of Women Engineers, profits, product sales, and job referral service. The Society treasurer is responsible for filing the Society’s federal and state tax returns.

Sections/MALs/regions that plan to have substantial unrelated income may want to consider incorporation. This requires the approval of the Society’s board of directors. Separately incorporated SWE units will still be required to abide by the Society's bylaws. Incorporated sections/MALs/regions must abide by all applicable state and federal regulations with regard to filing any necessary tax returns.

Timely, accurate financial reports from all groups of SWE, including those that are separately incorporated, are essential in order to keep the Society's favorable tax status.


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Appendix A – Financial Policies and Procedures Example #1

Purpose: The purpose of the section finance committee is to determine how the section funds are invested and to administer the various funds established by the section, other than the section checking account controlled solely by the treasurer.

Members: The committee should include the president, treasurer and a third section member nominated by the president and approved by executive council. Membership on this committee may be expanded in the future by the executive council.

Growth Fund: This shall be money designated by the section to be used to fund scholarships and expanded career guidance programs. The fund will normally be invested in a growth type of mutual fund or other investment instrument to obtain maximum growth. Transfers from this fund will be recommended by the finance committee and approved by the executive council.

Reserve Fund: This is money available for transfer to the checking account for the current year's expenses approved in the section budget by the executive council. This money will always be invested in a money market and can be transferred at any time during the year as required to meet budgeted expenses without executive council approval. All withdrawals of the funds from the reserve fund account shall require signatures of two finance committee members.

The treasurer is to provide an accounting of the funds semi-annually as a minimum, including activity and status, to the executive council and to other finance committee members on request. The Treasurer is also responsible for reporting investment account funds and income in the annual section financial report.

Cash Management Policy The objective of the cash management policy is to maximize the interest earned on section funds by minimizing the cash in the checking account.

The Treasurer shall be responsible for providing a quarterly cash flow analysis for the checking account and to recommend to the Finance Committee transfers to or from the Reserve Fund. The goal of these transfers is to minimize the funds carried in the checking account. The receipt of any income greater than $xxxx shall result in a cash flow analysis to determine how much of the receipt is available for transfer to the reserve fund.


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Appendix B – Financial Policies and Procedures Example #2

Budget Outgoing officers and committee chairs should prepare a year-end summary of

expenses, and pass it on to the incoming officer or committee chair at the transition meeting. This is done with the purpose of aiding the incoming officers in setting the new FY budget.

At the beginning of the FY each committee chair should present a proposed budget to the officer to which they report.

Each officer will consolidate the data gathered by their committee chairs and present a proposed budget to the treasurer.

The treasurer, aided by the finance committee, will finalize the budget for the section for the appropriate FY.

Whenever a change is predicted in the budget by any officer or committee chair, it must be reported to the treasurer as soon as possible in order to update the budget and assure that the funds will be available.

Reports At each executive council meeting the treasurer will present a financial report. Periodically, this report should include a budget comparison/update with the purpose of

assessing our status/progress. The treasurer is responsible for completing and submitting the annual financial report to

Society Headquarters on time. She/he should also fill in the "Start of Fiscal Year" column on the following year report in order to assure continuity.

If the section must file taxes the treasurer is responsible for doing so on time.

Income A copy of any invoices/receipts issued on behalf of the section should be forwarded to

the treasurer. The treasurer is responsible for seeing that these funds get deposited and allocated to

the appropriate account.

Reimbursements Any officer, committee chair or member desiring reimbursement for expenses made on

behalf of the section must submit a "request for funds" form accompanied by the appropriate receipts.

The type of items that will be reimbursable will be determined in advance by the budget and/or the executive council.

Basic Operational Expenses The treasurer will determine the basic operational expenses for one year. The amount in our checking account at the beginning of the fiscal year should be equal to or greater than this predetermined amount.

Other The treasurer must change the mailing address for the bank and investment accounts at

the beginning of each fiscal year. The treasurer must ensure that all Federal and State Taxes and non-profit tax status are

in order. (The address must be changed periodically). Update signature cards


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Appendix C – Investment Policy Example

PurposeThe purpose of this document is to set forth the policy and operations factors governing the investment management of various operating and reserve balances of cash belonging to the Society of Women Engineers (SWE) <insert Section/MAL/Region name>, herein referred to as the "Portfolio".

ObjectiveThe investment objective of the Portfolio is to:

1. First and foremost, insure the safety of the investment principal,2. Provide for a reasonable amount of Portfolio liquidity, and 3. Maximize the income yield for the total Portfolio.

A secondary objective of the Portfolio is to structure maturities so that known cash needs are met on a periodic basis as requested by the <insert Section/MAL/Region name>.

Eligible securitiesThe following securities are eligible investments for the Portfolio:

1. The following bonds: a) Certificates of Deposits (CDs) -- issued by a bank with varying maturity dates

including Callable CDs.b) Treasury Bills (T-Bills) -- issued by the U.S. Government with maturity dates of one

year or lessc) Treasury Notes (T-Notes) -- issued by the U.S. Government with maturity dates of 2

to 10 years including Callable Treasury Notes.d) Agency Securities -- issued by U.S. Federal Agencies with varying maturity dates

including Callable Agency Securities.e) Investment Grade Corporate Bonds – AAA, AA, A

2. Money Market Funds for temporary cash flow needs.

Maturity constraintsInvestments shall be made for the Portfolio having a final maturity of not more than ten (10) years from the date of purchase. Investment maturities shall be structured, i.e. "laddered", to provide liquidity of at least one quarter or $xxxxx of the account balance every six months, whichever is less.

No more than $xxxxx ($xxxxx Operating Expenses, $xxxxx Contingency Reserve) of the <insert Section/MAL/Region name>net assets shall be maintained in Money Market (Financial Management) and/or savings accounts. The balance of the assets shall be invested in the eligible Securities listed above.

ReportingInvestment status of the Portfolio shall be reported monthly to the executive council, as part of the treasurer's report, and at the annual <insert Section/MAL/Region name> planning meeting.

Financial Investment CommitteeThe financial investment committee is responsible for reviewing current and proposing future financial investments of <insert Section/MAL/Region name>, reviewing the Investment Policy and evaluating the performance of the financial consultant. The financial investment committee may follow the guidance of the financial consultant. This committee is lead by the treasurer.


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Members shall include those who have a background in financial investment and/or personal investment experience.

Decision authorityAll investments (changes and additions) recommendations will be determined by the financial investment committee. These investment recommendations shall be discussed and approved (by a majority) by the executive council prior to being administered by one of the bank and/or investment account owners (<president/governor or treasurer>).

Investment Policy ReviewThe Investment Policy shall be reviewed once a year, at a minimum, by the financial investment committee and any recommendations are presented at the annual planning meeting and monthly executive council meetings. Any changes to the policy shall be discussed and approved (by a majority) by the executive council.

Financial Consultant ReviewThe performance of the financial consultant shall be reviewed once a year, at a minimum, by the financial investment committee and any recommendations presented at the annual planning meeting and monthly executive council meetings. Any decisions to select a new financial consultant shall be discussed and approved (by a majority) by the executive council.


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Appendix D – Program Plan Example

PurposeThe purpose of this plan is to describe the Society of Women Engineers (SWE) <insert Section/MAL/Region name> goals for use of reserve funds. This plan will be used for internal planning purposes, and may be used as supporting documentation when soliciting financial support from industry. Reliance on the reserve funds should not be in lieu of financial support that can be solicited from industry.

Reserve fundsAs referenced herein, the reserve funds consist of <can insert where initial funds came from here>, as well any other undesignated funds invested on behalf of the <insert Section/MAL/Region name>. Refer to the Investment Policy for investment objectives.

Spending planIt is the intent to maintain the reserve funds as a source for future interest income. Principal may be used with the express approval of the executive committee (EC). Interest income and principal may be spent as follows:

Interest income up to $xxx or xx% of the expected interest income for the year, whichever is greater, may be used for routine operating expenses and programs each year, where those expenses cannot be covered by other sources. Routine operating expenses include such items as copying, postage, and officer supplies. Routine programs include monthly meetings, science fairs, elementary and middle school outreach, student mentoring, and Engineers Week.

The remaining interest income, and any use of the principal, will be requested on a case-by-case basis through the Project Implementation Proposal (PIP) process. Examples of programs requiring a PIP include professional development seminars, scholarships and special outreach events. Refer to the PIP guidelines for details of the process.

Principal may only be used with the express approval of the EC. Interest income not allocated during a fiscal year will be added to the reserve funds.

Approval ProcessUse of the identified percentage for routine operating expenses and programs does not require a PIP. It does, however, require the EC to approve the use of the funds through the normal budget approval process.

Members interested in using a portion of the interest income or principal must prepare a PIP and submit it to the EC for approval. A PIP covers funding for a single fiscal year, unless otherwise specified in the proposal and approved by the EC. The EC may require a financial report of the project once completed, or interim financial reports for multi-year projects.

The criteria to be used by the EC in reviewing PIPs include, but are not limited to: Thoroughness of the proposal, Other potential sources of funding for the project, Competing requests for reserve funds, Consistency of the project with SWE’s goals, Overall impact (e.g. number of people reached, potential to influence young women,

visibility), and Repeatability of the project, as appropriate.

The review and approval of a PIP will be according to the current policies governing EC voting and approval. Documentation of PIPs reviewed and approved will be maintained per the current record retention policy.


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Section Program Plan ReviewThe Program Plan will be reviewed once a year at the annual planning meeting. Any changes to the plan will be discussed and approved by a majority of the EC.


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Appendix E – e-Postcard Instructions (IRS Form 990-N)

Filing an E-Postcard:

Step 1: Getting a login ID and password

In order to get a login ID and password you will need your entity’s unique employer identification number (EIN). The EIN is a 9-digit number with the following format (xx-xxxxxxx ). Enter the EIN on the Request Login ID page (https://epostcard.form990.org/frmNPRequestLogin1Type.asp). All SWE entities are EXEMPT ORGANIZATIONS. The system will create your login ID based on your EIN. The login ID will be the EIN (without the dash) plus a two digit number (i.e. xxxxxxxxx01). Your login ID will never change. If another user requests a login ID for the same EIN, the last two digits of his or her login ID will be different (i.e. xxxxxxxxx02, xxxxxxxxx03, etc). If the section/MAL/region does not have an unique EIN, refer to Appendix I.

As part of the login ID request process you will be asked to provide an e-mail address. This is the address where your password will be sent if ever forgotten in the future. It is also the address to which confirmation of your filing will be sent. It is thus recommended that you use your entity’s permanent e-mail address or update the e-mail address with the IRS whenever it changes.

Once you have completed the login ID request process, you will receive an email containing an activation link. Click on the link to activate (and use) your login ID. Please remember to record both the login ID and password you are given and pass this information on to the next treasurer.

Step 2: Creating your e-Postcard (Form 990-N)

Once you have a login ID and password you will need to fill out your E-Postcard (https://epostcard.form990.org/frmSecurityLogin.Asp?StatusRequired=LoggedIn). The E-Postcard is easy to complete. All you need is the following information about your organization:

Your entity’s unique EIN

The tax year

o SWE’s tax year starts July 1 and is named according to the year in which it ends (e.g. FY10 is from July 2009 to June 2010). All E-Postcard filings occur after the end of the fiscal year. Thus if you file your E-Postcard anytime between (and including) July 2010 and June 2011 (although you are required to file by November 2010) you would list the tax year as 2010.

Your entity’s legal name and permanent mailing address

o For sections, this is the “section name”, SWE section and either the section’s permanent address or the treasurer’s address.

Any other names the organization uses

o N/A (unless you use other names)

The name and address of a principal officer

o The treasurer’s name and address.

The website address of the entity (if applicable)


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https://epostcard.form990.org/frmSecurityLogin.Asp?StatusRequired=LoggedIn

https://epostcard.form990.org/frmNPRequestLogin1Type.asp

Answers to the following questions:

o Are your gross receipts still normally $50,000 or less?

Mark YES

o Has your organization terminated or gone out of business?

Mark NO unless your section has been deactivated

Step 3: Submitting your e-Postcard (Form 990-N)Once you have completed your entity’s E-Postcard, click the “Submit Filing to IRS” button.

The e-Postcard has been filed, now what?

Every year your SWE entity will need to file a new e-Postcard by November 15. It is thus very important that you keep track of all documents related to this process. The important pieces of information are listed below:

A copy of your entity’s SS-4 & the tax determination letter received from the IRS assigning the EIN number.

A copy of your entity’s request to be added as a subordinate organization under the SWE group tax exemption and the letter from SWE-HQ confirming inclusion in the SWE Group Exemption.

The e-Postcard login ID and password issued to you


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Appendix F – Financial Assessment Procedure

The annual financial assessment should consist of the following set of steps at a minimum.

1. Solicit the FYXX-1 records from the treasurer.2. Review the recording of deposits3. Verify documentation supporting checks issued and other disbursements4. Review annual report5. Complete and sign assessment form6. Prepare motion for section executive council/MAL council/region council to

accept assessment

The committee may also, if the results of their assessment indicate any discrepancies in the accounting, utilize the following steps to investigate the source of and to resolve these discrepancies:

1. Reconcile bank accounts2. Make recommendations to improve accounting system.

The following is a recommended calendar of events for completing the assessment:

July Recruit assessment committee members.Obtain approval of committee members from section president/region governor (if required).

August Obtain financial documents from the treasurer. Conduct the assessment and fill out the assessment form.

September Make recommendation to section executive council/MAL council/region council to vote to approve the financial assessment report at its next meeting.

For more detailed information on completing the annual financial assessment, please refer to the assessment instructions, assessment procedure, and assessment form. The latest version of these documents may be found in the SWE Money Community.


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Appendix G – SWE 501(c)(3) Tax Exempt Letter

A copy of the letter granting 501(c)(3) tax exemption to the Society is available under the SWE Organization section of the SWE Governance Documents webpage. The list of sections/MALs/regions covered under this letter changes from year to year. Contact SWE headquarters for information on whether your section/MAL/region is currently covered. Requests for inclusion in SWE’s tax exemption should be forwarded to SWE headquarters, ATTN: Executive Director. The form for this request is the Tax Exemption Request Form and is posted on the SWE Governance Documents area of the website, under Tax Information.

Collegiate sections of SWE can also be included under the Society’s tax exemption if (1) they have their own EIN and (2) have been included in the Society’s annual report to the IRS regarding changes to subsidiary organizations. If federal tax exempt status is an issue for your collegiate section, contact the executive director at SWE headquarters to determine your status and how to be included.


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Appendix H –Donor Letter Example

Date

Dear <insert donor name>,

Thank you for your contribution of $xxxx to the Society of Women Engineers <insert section/MAL/region name> <insert purpose of donation, e.g. Scholarship Program>.

There are many ways to support the Society, but financial assistance is one of the most critical. Without contributions from individuals like you, the Society would not be successful in reaching its goals. Through the loyal support of members and friends, however, we are making great strides toward our goals of supporting women of all ages, in their quest for successful careers in engineering.

Please know that you are an important reason for our continued success. Thank you again.

Sincerely yours,

<title: president/governor or treasurer or scholarship chair>


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Appendix I – Obtaining an Employer ID Number (EIN)

If the section/MAL/region has interest bearing accounts, they must have their own Employee Identification Number (formerly known as a Tax Identification Number). Do not use the EIN of the Society or an individual’s Social Security number. The financial institution you deal with will report the interest earned under the EIN used for the account.

Requesting an EIN:

All current regions and the MAL organization should already have unique EINs, but some sections and every newly chartered section will need to request an EIN. To request an EIN you will need to fill out an SS-4 and submit it to the IRS or apply online via the IRS website at http://www.irs.gov/businesses/small/article/0,,id=102767,00.html. Please fill out the fields on the website as follows:

Page 1 – What Type of Legal Structure is applying for an EIN?Select: View Additional Types, Including Tax-exempt and Governmental OrganizationsPress <<Continue>>

Page 2 – Additional TypesSelect: Other Non-Profit/Tax-Exempt OrganizationsPress <<Continue>>

Page 3 – Please confirm your selectionPress <<Continue>>

Page 4 – Why is the Non-Profit/Tax-Exempt Organization requesting an EIN?Select: Banking PurposesPress <<Continue>>

Page 5 – Who is the responsible party?Select: IndividualPress <<Continue>>

Page 6 – Please tell us about the responsible partyFill in section treasurer’s name and SSNChoose: I am a responsible and duly authorized member or officer having knowledge of this organization’s affairsPress <<Continue>>

Page 7 – Where is the Non-Profit/Tax-Exempt Organization physically located?Fill in the permanent mailing address for your section/region treasurer or other mailing address for the section.Add an additional mailing address if applicable for your sectionPress <<Continue>>

Page 8 – Tell us about the Non-Profit/Tax-Exempt Organization.Legal name: “section number”, SWE section; If you do not know your section number (it should be the letter of your region followed by 3 numbers).Trade name: Leave blankCounty: This field should already be populated based on the address you provided on Page 7State/Territory: This field should already be populated based on the address you provided on Page 7Non-Profit/Tax-Exempt Organization Start Date: The date your section was chartered. If you do not know the charter date of your section, you can go to the “Governance Documents Community” in My SWE Communities. There is a child community (of the Governance Documents Community) called “Section Charter Dates” which has files listing the date each collegiate and professional section was chartered.Press <<Continue>>


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http://www.irs.gov/businesses/small/article/0,,id=102767,00.html

Tell us more about the Non-Profit/Tax-Exempt Organization.Click “NO” for allPress <<Continue>>

Page 10 – What does your business or organization do?Click “Other”Press <<Continue>>

Page 11 – You have chosen OtherClick “Organization”Press <<Continue>>

Page 12 – You have chosen Other organizationClick “Other” Specify “educational organization”Press <<Continue>>

Page 13 – How would you like to receive your EIN Confirmation Letter?Select letter optionPress <<Continue>>

A provisional EIN will now be generated for you and a letter confirming the EIN number will be mailed to the address you provide or sent via email depending on the option you selected on Page 13.

If you choose to use the paper SS-4 form to request an EIN please fill out the fields on the form as described below. The SS-4 can also be found on the IRS website (http://www.irs.gov/pub/irs-pdf/fss4.pdf).

Field 1. “section number”, SWE sectionIf you do not know your section number (it should be the letter of your region followed by 3 numbers).

Field 2. Leave blankField 3. The section treasurer’s name Field 4. The permanent mailing address for your section’s treasurer. Field 5a. Leave blankField 5b. Leave blankField 6. USA, “name of the state where your section is located” Field 7a. The treasurer’s name*Field 7b. The treasurer’s SSN* Field 8a. Mark NOField 8b. N/AField 8c. Leave blankField 9a. Mark OTHER NONPROFIT ORGANIZATION and specify “professional society”Field 10. Mark OTHER and specify “federal tax exemption”Field 11. The date your section was chartered.

If you do not know the charter date of your section, you can go to the “Governance Documents Community” in My SWE Communities. There is a child community (of the Governance Documents Community) called “Section Charter Dates” which has files listing the date each collegiate and professional section was chartered.

Field 12. JuneField 13. Put zero in all 3 spotsField 14. N/A, but mark YESField 15. N/AField 16. Mark OTHER and specify “educational organization”Field 17. EducationField 18. Mark NO


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http://www.irs.gov/pub/irs-pdf/fss4.pdf

http://www.irs.gov/pub/irs-pdf/fss4.pdf

Have the treasurer print their name, sign, and date the document. They should also include their phone number.

This form can be mailed to the following address:Internal Revenue Service CenterATTN: EIN OperationCincinnati, OH 45999

*Please note that once your SWE section has been added as a subordinate organization under the SWE group tax exemption, SWE HQ will automatically update the IRS as to the identity of your treasurer per the information on your annual financial report. These updates are submitted by SWE staff annually, generally in March.

Requesting to be added as a subordinate organization under the SWE group tax exemption:

Once you have your section specific EIN you will need to request that your SWE section be added as a subordinate organization under the SWE group tax exemption. Please refer to the file “Tax Exemption Request Form” which can be found of the SWE Governance site. Please fill out the form as follows:

1. SWE section2. “section number”

If you do not know your section number (it should be the letter of your region followed by 3 numbers).

3. Your section’s unique EIN4. The permanent mailing address for your section. This should be the same address

listed on your SS-4.5. Mark YES6. Mark NO unless otherwise known.7. Mark NO

Please have your section treasurer sign and date the document and either e-mail it to the executive director at [email protected] with the subject “REQUEST FOR SWE GROUP TAX EXEMPTION” or mail it to Society headquarters.


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Appendix J – Sample Expense Reimbursement Form

SWE XYZ SectionEXPENSE REIMBURSEMENT FORM

This form is to be used to request reimbursement for authorized SWE XYZ Section expenditures. Reimbursement is contingent upon adequate funds remaining in the specified budget line. Please complete the information requested and return it with accompanying original receipts taped to a sheet of 8.5” x 11” paper no later than 30 days after the event to the SWE XYZ Section Treasurer at:

Treasurer’s NameFYXX SWE XYZ Section Treasurer

Address 1City, State Zip

Name: Date:

Address:

Description of Expense: Date: Amount: Budget Line Item:

TOTAL TO BE REIMBURSED: $

Please check here if you would like your reimbursement check to be used as a donation to the Society of Women Engineers XYZ Section. Receipts must be submitted even if donating expenses. You will receive a letter thanking you for your donation and to use for tax purposes.

For treasurer use:Pre-approved by officer contact: Date

Budget review by treasurer: Date

Account #: ____________________ Check #: _____________ Date


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Appendix K – Revision Page

Date Changes

January 2011General document revision

June 30, 2011 Approved by Society Secretary


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