Finance best practices

Review these resources and guidance to assist with your group's financials

Two things alumni groups must do every year

Keep accurate financial records
File annual 990 form with IRS

Expectations to follow

As a best practice we encourage alumni groups with $10,000 or more in your group’s local bank account to send in excess funds to be deposited in your group’s current use fund or endowment account. By depositing money in your group’s endowment or scholarship accounts, it will allow you to award more funds to current Buckeye students. We know that some groups may need to have more than $10,000 due to a large event budget, but idle funds in excess of $10,000 that are not being used for events should still be sent to your endowment or scholarship accounts so that we can help you award students. We thank you and your members for all the work that you do to support Ohio State students, and look forward to helping you award these funds.

Expectations to follow in regards to bank accounts:
- Transition to electronic record keeping.
- Two signatures are required on each bank account and all financial transactions.
- Max of two local accounts (group checking account & group savings account) per alumni group.
- President & Treasurer have access to all banking documents.
- Weekly monitoring of all financial activities by President & Treasurer to ensure account accuracy.
- Monthly bank statements should be sent from the bank directly to office in addition to the Treasurer, preferably the club President. (This officer should review the statement, canceled checks and deposits for accuracy and appropriate use of funds). Email is an acceptable delivery method, but should be directly from the bank.
- Provide copies of banking statements to the executive board at meetings. Utilize “banking alerts” for transactions over $x dollars. The group needs to decide what “x” is because it will likely be different for each group.
Expectations for opening a bank account:
- Our alumni groups should be opening bank accounts with Business banking rather than personal checking. Business banking accounts are made only with a group and not an individual. This is helpful with alumni group leadership transitions.
- Ensure the name of the account matches the alumni group name on the constitution.
- Alumni groups need to establish EIN numbers (please see Taxes section for more information). Once a group has an EIN number, please share with your OSUAA contact.
- There is no preferred bank. Please note that Huntington Bank is The Official Consumer Bank of The Ohio State University. Visit huntington.com/osu to learn more.
- Ensure the bank can deposit US dollars.
- Each bank may vary on documentation required in setting up accounts. Most commonly used documents are the group’s constitution and charter. Please contact your OSUAA contact if you need these documents.
- If an alumni group changes banks, please update your OSUAA contact. Submit a new direct deposit form which can be found here.
Resources

Existing groups

Alumni Groups should maintain tax-exempt status as a 501(c)4 organization, which ensures your group doesn’t have to pay Federal income tax on revenue.
Treasurer or President must fill out an annual 990 e-postcard from the IRS within five months of the end of the group’s tax year. To file a 990 postcard with the IRS please visit: http://go.osu.edu/990filing
Groups that fail to complete their annual filing requirement for three consecutive years are subject to losing their tax-exempt status and are subject to penalties and reinstatement fees.
To check your current tax-exempt status and/or federal income tax filing history visit the IRS website at https://apps.irs.gov/app/eos/. Once at this site you will need the group EIN number.
If your tax status has been revoked, information re: the reinstatement process can be found on the IRS website here – https://www.irs.gov/charities-non-profits/charitable-organizations/automatic-revocation-how-to-have-your-tax-exempt-status-reinstated and mainly involves resubmitting a Form 1024-A online and paying the user fee.

New groups

Before beginning to operate, groups must complete the following steps:

Apply for a federal Employer Identification Number (EIN). An EIN number is necessary to open a local checking account and is used when filing annual taxes with the IRS and can be done here: http://go.osu.edu/ein.
Complete Form 8976, which is a “Notice of Intent to Operate”, fee is $50 and this must be filed within 60 days of formation. For the purpose of this discussion, “Date of Formation” shall be the date the group applies for the EIN. This form can only be filed electronically.
Complete Form 8718, which grants the alumni group the exemption status. Currently the fee is $600. This allows the group to be exempt from Federal Income Tax.
Submit Form 1024-A with Form 8718 (document in step No. 3) to finalize the IRS application process for income tax exemption under IRS code 501(c)4. Both forms must be submitted together. Once submitted and subsequently accepted by the IRS, the IRS will respond with confirmation of the groups’ exempt status.
Adhere to the “Existing Group” steps above.

Note that exemption from sales tax is a state and local tax issue. Many states/cities do allow exempt organizations to be exempt from sales tax, but that is at the discretion of local law and the specific vendor(s) that you are working with at the time.

Finance best practices