Because the association was constantly besieged by requests from
chapters for assistance with funding,
management and administration, its
board convened a strategic planning
session to decide whether its state-based chapters were still necessary. It
decided to offer each state the option
of becoming a special interest group
within the corporate structure of the
association. Each SIG would still have
a committee that managed its affairs,
but all revenue and expenses would be
owned and managed by the parent association.
This was not accomplished without
conflict, as chapter presidents did not
want to relinquish their titles. The politics were painful, in fact. Still, eliminating its existing chapter structure will
save the association hundreds of thousands of dollars in administrative costs
over the next few years, which are now
being borne by members in the form of
state and national dues.
2.;Financial;Management
By now, associations are familiar with
virtual meetings. At least two factors, however, have caused association
chapters to wonder: What about virtual
accounting?
The first factor was Sarbanes Oxley.
Though not directly applicable to nonprofits, it highlighted the fact that
boards have ultimate responsibility for
everything that happens in an organization, and that “ultimate responsibility”
comes with potential liability.
The second factor was the revision
of IRS Form 990, which is now more
complex. Due to its extended rollout
based on revenue, many chapters were
not immediately impacted. They are
starting to be impacted now, however
— and many don’t like it. In fact, even
the smallest chapters are now required
to file Form 990-N or lose their tax
exemption.
Although these factors are causing
chapter leaders to say, “We do not want
this responsibility,” national associations typically don’t want to lose their
grassroots networks. Plus, the thought
of moving chapters to internal units,
and putting headquarters staff in charge
of approving expenditures for 50 state
organizations, sounds like a nightmare.
Virtual accounting proved an effec-
tive compromise for one national asso-
ciation that had 17 state chapters. A
delegation of state leaders approached
the national organization stating they
were overwhelmed by paperwork and
outside accounting fees. They wanted
headquarters to take over the burden. In
response, the national association fash-
ioned a technology solution that would
permit chapters to submit payment
requests with PDFs of invoices, allowing
headquarters to easily handle chapters’
finances. What would have required
courier fees to ship documents back
and forth even a few years ago is now
more practical thanks to technology.
3.;Association;Liability
Technology has practical implications
for associations’ chapter relations. It
also has legal implications, however.
Consider, for instance, electronic publishing. Although modern technology
makes it possible for associations to
easily publish newsletters and other
materials for their chapters, there is a
trap for the unwary in this area. Unless
the national association does it right, it
could assume liability for infringement,
without exercising the kind of supervision over content creation that it has
with its own publications.
One association, for example, offered
to use its server to deliver chapter newsletters. It recently received a complaint
filed in the federal courts, however,
based on a claim that an article in
a chapter newsletter had plagiarized
a newspaper article. A review of the
