Section 3: Order & Leadership
The critical role of Chapter Officers, the importance of membership recruitment, and a guide to chapter finances.
Chapter Officer Duties
The President is the chief executive officer of the Chapter and presides at all meetings of the Chapter and Chapter Board. This person also serves on all committees and may submit reports and recommendations. The President also has the legal authority to sign and countersign all contracts related to the chapter affairs, as authorized by the Chapter Board.
The Chapter President typically serves a term of three years, renewable for one additional term (or until a successor is elected).
The Vice President fulfills the responsibilities of the President in the President’s absence or inability to act.
The Vice President typically serves a term of three years or until their successor has been duly elected, with the possibility of nomination for re-election.
The Secretary is responsible for maintaining all records documenting Chapter decision making and activities and shall have custody of the minutes of the meetings of the Chapter Board and any general meetings of the Chapter. These minutes must include the names of those members who are present and absent as well as copies of the reports from all committees.
Chapter meeting Minutes are legal documents of the DSA. Within a month of the minutes’ formal approval (typically at the following meeting), the Chapter Secretary must upload them to the DSA’s Google Drive and send a link to the document to the Chapter Outreach Committee Chair.
If absent, another member of the Chapter Board should perform the Secretary’s duties. The Secretary typically serves a term of three years, renewable for one additional term, renewable for one additional term (or until a successor is elected).
The Treasurer is the custodian of all financial records of the Chapter and must keep full and accurate accounts of financial activity, which may include assets, liabilities, fund balances, revenue, and operating expenses. This person is also responsible for depositing funds into and disbursing funds from the Chapter bank account.
The Treasurer leads the development and maintenance of a budget for all Chapter operations that lists projected costs and actual expenditures. This typically involves submitting reports and statements to the Chapter Board.
The Treasurer typically serves a term of three years or until their successor has been duly elected, with the possibility of nomination for re-election.
When trying to recruit new chapter members, a chapter should consider a few individual questions:
- Who or what got you involved with your chapter?
- What keeps you involved with your chapter?
- What is your chapter doing right?
- What would happen if the chapter didn’t exist?
These questions help to determine the value the Chapter offers to current and future members. Current members should use their strengths to recruit new members with education, events, and communications.
Showing those newcomers to Dalcroze Education the value and importance of chapter involvement can help in recruiting new members.
A chapter can offer orientation to the practice and Chapter, networking opportunities, and mentoring opportunities. New chapter members contribute a fresh perspective, creative ideas, and improvements upon chapter best practices.
Perhaps the most challenging aspect of running a Chapter is managing its finances. For this reason, we’ve gone to some length here to give Chapter leaders information that will make this whole business less stressful. More to the point, although Chapters are not required to make a profit, it is critical to the DSA’s wellbeing that the Chapters keep their financials “in the black.” The DSA is committed to providing its Chapter leaders with all the tools they need to operate the chapter in a sustainable and fiscally prudent way.
The following sections offer guidance in drafting a budget, opening a bank account, naming signatories, complying with state and federal tax codes, and dissolving a Chapter. Should you need any additional support, contact the DSA at admin[at]dalcrozeusa.org.
How to make a budget
Developing your first annual budget can seem like a daunting task, but the process is fairly straightforward: make a list of the revenue and expenses you predict for the year. Revenue might include registration fees from events you have planned or donations to support your chapter. Expenses may be associated with events you host or materials you need.
Unless you are prepared to invest cash reserves from your chapter bank account, revenue must exceed expenses. At the end of the year, excess funds remain in the chapter bank account for your future use, and can provide money for launching more ambitious projects.
Each chapter is different in its scope and activities. If your chapter runs a lot of events, then more focus will go to preparing the event fees and venue costs. If you administer a scholarship fund, then you will need to consider how much funding you can bring in.
Don’t worry if you aren’t confident in your estimations this first time. With a little experience, your chapter will develop a track record of figures that can be used to more accurately predict items on your budget.
DSA budgets are created in a spreadsheet program called Google Sheets. This tool allows you to create automatic calculations that add or subtract your line items. It’s critical to double-check the math, so the DSA’s Finance Committee has accurate numbers to review.
After the season closes or the event finishes, prepare the budget “actuals.” (Submitting the actuals is required if you had requested event support.) Use a column in your budget that shows what money came in and went out, and its purposes. This is invaluable information for preparing future budgets!
How to open a bank account
- The Chapter Treasurer is responsible for opening a business account with a local bank in the Chapter’s name (i.e., the name to which checks will be made out).
- Before engaging a particular bank, the Board will need to take four actions:
- Choose a bank. (If you need help choosing a bank, contact email@example.com.)
- Vote on a motion to designate two Chapter officers “signatories” (Why two? See below).
- Designate a Chapter officer who will receive correspondence from the bank.
- Get an Employer Identification Number (EIN).
- Depending on state laws, the bank may require the Chapter to open the account using the DSA’s EIN (25-1360784). In that case, the bank may want the DSA’s Executive Director’s authorization.
- If the bank requires the Chapter to use its own EIN, DSA staff will help you apply for your own EIN. It takes only a few minutes and there’s no fee.
- The bank will require a physical mailing address for corresponding with the chapter. In most cases, this will be the Chapter Treasurer’s mailing address or a PO box opened by the Chapter Treasurer. However, it may also be the Chapter Secretary’s address.
- When the time comes to open the account, the Treasurer and the other officer designated as a signatory will need to visit the branch office of the bank you have chosen.
Who Will Sign the Checks?: The Signatories
Filling the role of signatory entitles an individual to write and sign checks in the Chapter’s name, as well as deposit and cash checks. The Chapter executive board will want to formally authorize two officers to serve as “signatories,” rather than just one. There are several reasons why we strongly recommend this approach. If something should happen to the Treasurer, it’s critical to have someone positioned to conduct business on the Chapter’s behalf. Moreover, when the Treasurer steps down, the signatory will be positioned to facilitate the transfer of this role to the new Chapter Treasurer. Finally, it is generally considered a non-profit best practice that the person who signs the checks (typically the Treasurer) not be the same person who receives money.
When the Chapter Treasurer goes to the bank to open the account, he or she will need to bring the meeting Minutes that document the board’s motion to appoint him or her to the role of signatory. At that time, one other Chapter member should accompany him or her, ideally another Chapter officer, such as the President, Vice-President or Chapter Secretary.
Not-for-Profit, Tax Exempt, + 501(c)(3) Status: Comply with State and Federal Tax Codes
It’s often assumed that the terms “tax exempt” and “not-for-profit” are synonymous. They’re not. The DSA’s founders incorporated this organization as a not-for-profit entity in the state of Pennsylvania. They then applied to the Internal Revenue Service for 501(c)(3) status. Not only does this exempt the DSA from having to pay federal income tax, it also simplifies tax filing and reporting on revenue below a certain threshold. Most critically, it allows the DSA’s donors to deduct their charitable contributions from their earnings. As the managers of a DSA branch, Chapter officers are conducting business on behalf of the DSA and its membership, albeit on the local or regional level—within their respective states. But states do not confer tax-exempt status; they only confer not-for-profit status.
As branches of the Dalcroze Society of America, DSA Chapters enjoy all the benefits of 501(c)(3) status (i.e., tax exemption) without incurring any of the costs of applying to the IRS as a separate entity. Nor do they need to apply to their respective states for separate not-for-profit status. However, because the DSA must comply with the federal tax code, its Board is responsible for ensuring that its branches do so as well. Consequently, while Chapters do not need to file their federal income tax separately, they are responsible for reporting their financial data to the DSA’s Finance Committee.
State Sales Tax Exemption
If a Chapter wants to be exempt from state sales tax it needs to file for non-profit status in its primary state of operations. The Chapter is responsible for paying for all fees associated with the application process and with maintaining this status. The application registers the Chapter with the Secretary of State of the state in which it conducts business.
If a DSA Chapter were to dissolve or lose its charter, what would happen to the assets?
According to the DSA Bylaws, ARTICLE XI. CHAPTERS AND DSA TRAINING PROGRAMS, Section 8. Limitations & Dissolution, subsection D. “All assets held by any Chapter remain the property of the DSA. If, upon dissolution of a Chapter, there are any assets remaining after payment of all expenses and satisfaction of all liabilities, these shall be remitted to the DSA for… the nonprofit purposes of the DSA.”
This means that if a chapter should ever fold or lose its charter, all assets and equity that the chapter holds in its bank account reverts to the DSA Board. Why? Because the DSA's membership owns the corporation and all its assets, taken together, inclusive of any that the chapters have built up.
All property and equity DSA Chapters acquire in conducting their operations are therefore portions of the DSA's total capital. In their leadership roles, a Chapter’s Executive Board stewards these resources on behalf of the DSA membership, of which its membership is a subset.
To maintain the DSA’s tax exempt status with the Internal Revenue Service, the Governance Committee drafted the DSA Bylaws and Chapter Bylaws with IRS compliance in mind. A key reason why the IRS lets the chapter's financials fly under its radar is because, as far as its concerned, these branches of the DSA are administering this not-for-profit corporation’s finances in their respective local or regional 'markets.' Ultimately, because we all share the same mission, we should never have to confront this issue.