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Section/MAL/Region Finance Manual
TABLE OF CONTENTS
I.
II.
III.
IV.
V.
VI.
VII.
VIII.
Purpose
Scope
Financial Responsibilities
Policies
Financial Procedures and Records
Fund Raising and Development
Scholarships
501 (c)(3) Reporting
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Appendix A – Financial Policies and Procedures Example #1
Appendix B – Financial Policies and Procedures Example #2
Appendix C – Investment Policy Example
Appendix D – Program Plan Example
Appendix E – E-Postcard Instructions (IRS Form 990-N)
Appendix F – Financial Assessment Procedure
Appendix G – SWE 501 (c)(3) Tax Exempt Letter
Appendix H – Donor Letter Example
Appendix I – Obtaining an Employer ID Number (EIN)
Appendix J – Sample Expense Reimbursement Form
Appendix K – Revision Page
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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.
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D. All Section/MAL/Region Officers and Committee Chairs
The responsibilities of the officers and committee chairs are as follows:
 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
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
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.
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.
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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.
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,
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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.
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.
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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
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.
6.

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.
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.
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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
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. Longterm 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
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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
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
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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
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 donorimposed 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.
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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.
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:
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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:
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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
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2.
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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:
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Each section/MAL/region should establish a financial assessment committee to perform
the yearly financial assessment. The committee shall include:
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Assessment
Safeguard the assets of the organization.
Ensure the accuracy, reliability, timeliness, and integrity of the accounting and
operational data.
Promote operational efficiency.
Ensure compliance with managerial policies, laws, regulations, and sound
business practices.
Chair (must be SWE member in good standing), appointed by the section/MAL
president or region governor.
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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
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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:
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Direct solicitation of local industry
Direct solicitation of members
A surcharge on dinner meetings
Registration fees at seminars and workshops
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.
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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,
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 taxexempt 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.
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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
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.
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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
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;
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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 bot-scholarships@swe.org.
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
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 threeyear 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”,
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because this short-form return may only be filed electronically; the official name of the
filing form in Internal Revenue Service Form 990-N.
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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.
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 ePostcard (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 ePostcard is submitted through a third party website. Refer to Appendix E for detailed
instructions on filing an e-Postcard.
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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).
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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
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
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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:
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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.
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
Purpose
The 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".
Objective
The 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 securities
The 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 less
c) 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 constraints
Investments 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.
Reporting
Investment 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 Committee
The 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 authority
All 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 Review
The 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 Review
The 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
Purpose
The 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 funds
As 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 plan
It 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 caseby-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 Process
Use 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.
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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.
Section Program Plan Review
The 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
EPostcard is easy to complete. All you need is the following information about your organization:
1253

Your entity’s unique EIN
1254

The tax year
o
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
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N/A (unless you use other names)
The name and address of a principal officer
o
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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
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1265
Your entity’s legal name and permanent mailing address
o
1261
1262
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.
The treasurer’s name and address.
The website address of the entity (if applicable)
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
Answers to the following questions:
o
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Are your gross receipts still normally $50,000 or less?
o
Mark YES
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.
2.
3.
4.
5.
6.
Solicit the FYXX-1 records from the treasurer.
Review the recording of deposits
Verify documentation supporting checks issued and other disbursements
Review annual report
Complete and sign assessment form
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.
2.
Reconcile bank accounts
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 Organizations
Press <<Continue>>
Page 2 – Additional Types
Select: Other Non-Profit/Tax-Exempt Organizations
Press <<Continue>>
Page 3 – Please confirm your selection
Press <<Continue>>
Page 4 – Why is the Non-Profit/Tax-Exempt Organization requesting an EIN?
Select: Banking Purposes
Press <<Continue>>
Page 5 – Who is the responsible party?
Select: Individual
Press <<Continue>>
Page 6 – Please tell us about the responsible party
Fill in section treasurer’s name and SSN
Choose: I am a responsible and duly authorized member or officer having knowledge of
this organization’s affairs
Press <<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 section
Press <<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 blank
County: This field should already be populated based on the address you provided on
Page 7
State/Territory: This field should already be populated based on the address you
provided on Page 7
Non-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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Page 9 – Tell us more about the Non-Profit/Tax-Exempt Organization.
Click “NO” for all
Press <<Continue>>
Page 10 – What does your business or organization do?
Click “Other”
Press <<Continue>>
Page 11 – You have chosen Other
Click “Organization”
Press <<Continue>>
Page 12 – You have chosen Other organization
Click “Other” Specify “educational organization”
Press <<Continue>>
Page 13 – How would you like to receive your EIN Confirmation Letter?
Select letter option
Press <<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/irspdf/fss4.pdf).
Field 1.
“section number”, SWE section
If you do not know your section number (it should be the letter of your region followed by
3 numbers).
Field 2.
Leave blank
Field 3.
The section treasurer’s name
Field 4.
The permanent mailing address for your section’s treasurer.
Field 5a. Leave blank
Field 5b. Leave blank
Field 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 NO
Field 8b. N/A
Field 8c. Leave blank
Field 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. June
Field 13. Put zero in all 3 spots
Field 14. N/A, but mark YES
Field 15. N/A
Field 16. Mark OTHER and specify “educational organization”
Field 17. Education
Field 18. Mark NO
Revision Date: January 17, 2011
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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 Center
ATTN: EIN Operation
Cincinnati, 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 section
2. “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 EIN
4. The permanent mailing address for your section. This should be the same address
listed on your SS-4.
5. Mark YES
6. 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 executive-director@swe.org with the subject “REQUEST FOR SWE
GROUP TAX EXEMPTION” or mail it to Society headquarters.
Revision Date: January 17, 2011
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Appendix J – Sample Expense Reimbursement Form
SWE XYZ Section
EXPENSE 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 Name
FYXX SWE XYZ Section Treasurer
Address 1
City, State Zip
Name:
Date:
Address:
Description of Expense:
Date:
Amount:
TOTAL TO BE REIMBURSED:
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Budget Line Item:
$
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
Revision Date: January 17, 2011
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Appendix K – Revision Page
Date
Changes
General document revision
January 2011
June 30, 2011

Approved by Society Secretary
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