*Looks at bank statement again*
I think I’m going to be sick. What did you do!?
Although that insinuation is directed at either the previous treasurer or to you, dear reader, what’s clear here is that you, sir, are in trouble. Your books are redder than Clifford and this story doesn’t have a happy ending. It’s got a sad one. An ending where you and your fraternity brothers are going to be forced to cancel your winter and spring formals, and God help you if you thought you’d be pulling out all the stops for Rush Week.
No…not even God can save you now…
You need intervention. You need fiscal responsibility. Son, you need a miracle.
Debt is no fun. Just ask the 63% of millennials who have more than $10,000 in student loan debt. They’ll tell you themselves…as soon as they can reconnect their phone lines. And for a fraternity chapter’s account to be zeroed out—or worse, to take a dive into the red—that can mean a lesser quality of life and lower recruitment rate for brothers for years to come.
It’s time to pull yourselves up by your bootstraps and get it together. Your future as an organization may depend on it.
However, we at OmegaFi aren’t here to make you feel bad. Lucky for you, we’re here to help. Welcome to your intervention, dear sir…Holy Debt! Let’s Talk Pulling Your Fraternity’s Finances Out of the Hole.
*Puts on stiff bureaucrat hat*
CUT ALL UNNECESSARY EXPENSES
Apologies to your eyes but we’re going to leave that one in all-caps because it’s probably the most important line in this entire article.
The first thing you need to do to get debt under control is to first track it. This means looking at every…single…line item expense with the highest degree of scrutiny to determine if it’s absolutely essential. Want to throw a mixer with the Tri-Delts? Cut it. Want to print new Rush Week shirts? Quit playing. Trying to upgrade the cafeteria food to a five-star catering service? You’re messing with me right?
This part is key because a fraternity chapter may operate like a business (board of directors, president, etc.) but we assure you that it is not. A fraternity chapter is effectively a non-profit organization. And as a social organization, you sell no products or services. As a result, you’ve got ZERO revenue aside from membership dues and profits from ticketed events. That’s it. So, as an organization with limited revenue, you have to be particularly mindful of the money coming in versus the money going out. As the old adage goes, “it’s easier to spend money than make it.” So, take that to heart and think very hard on the return of every dollar you spend.
Reduce the Budget for Your Essentials
Let’s say you’ve gotten rid of all the non-essential expenses in your budget. Great! But that’s what you should have been doing all along. At this point, we’ve got to take things even further. You need to look at your essential budget items (Recruitment Week, Formals, etc.) and you need to really look hard at where you can scale down.
It may be that all-expense formal you planned in the mountains needs to be moved to the Marriot Conference Room down the street. It sucks, we know, but no one said fiscal responsibility was easy. It takes sacrifice and maturity to get your finances where you want them to be; the fun can come when you’ve earned.
With that in mind, scale down everything you can. If you need to switch steak and lobster in the cafeteria to burgers and French fries for a few months, that’s just what it’s going to have to be for a little while. If you need to reschedule a few major parties, you’ll realize the importance of building up an event and making your fans wait.
The key here is to get in the mindset that sometimes—like every punk rocker entering their late 40s—you just need a break from everything.
Get That Money! Fundraise Your Butts Off
As we mentioned before, your biggest source of fundraising is going to come from a single source: dues. You need dues from your brothers collected on time and in full. That’s it. If you can streamline that process, do it. If you can’t, give us a call. Either way, that money needs to be paid when it’s owed because the longer it goes uncollected, the harder it’s going to be to get.
And on the subject of dues, you should seriously consider raising them. Not to a crippling amount, but if your dues are $1000 per semester, raise them to $1100 or $1200. Although brothers may scoff, or even protest, if you can assure them this is a temporary method to get the chapter finances back in good-standing, and that you’ll reward them (within reason) later in the year with a thoughtful expenditure. To be honest here, the financial state of the chapter should be completely transparent to your brothers, and in the best-case scenario, they’ll be willing to contribute a little extra to keep the chapter afloat.
For argument’s sake, let’s say your brothers are completely against it. They laugh at you. Some even sneer. That’s fine. That’s when you propose an alternative: a full fundraising schedule to be implemented in place of the higher dues. This could be a car-wash every weekend for the next 3 months. A kissing booth. A pie-station. A bake sale. Whatever it takes. Just give your brothers some ideas and the initiative to start hustling, and you’ll be back in the black in no time.
Getting out of debt isn’t fun, but it is doable. In fact, many of you reading this with student loan debts or car loans will be learning this firsthand. And that’s not something to be afraid of it’s just a natural process in growing up and becoming more fiscally responsible.
Is your chapter on the struggle-bus financially right now? Let us know in the comments and we’ll offer any wisdom we can to help you get out.