First of all, be sure your club has separate accounts for administrative funds and civic funds. Administrative funds are the monies derived from your members, such as dues, tail twister fines, 50/50 drawings, etc. Civic funds are monies derived from the public from fund raising activities. All funds raised from the public must be used for the public. The civic funds cannot be used for club membership expenses. It is permissible to donate administrative funds to the public, but you cannot use civic funds for administrative purposes.

According to Lions International's legal staff, the IRS has defined the rules for service clubs much more rigidly. Clubs cannot hold long term certificates of deposit for long periods of time. Any CD held for more than one year must have a specific project stated in writing for the use of those funds and a specific date for use of the funds.

There is more information available from Lions International on handling club finances. This article is just to give you some food for thought. Please take this information seriously!

Failure to follow the rules will make it more difficult if not eliminate your ability to raise funds in your community. Failure to follow the rules may also result in a fine from the IRS that could devastate your club and, in turn, your community.

Article taken from District 26-B's Growls & Roars Volume 1 No. 11 (May 1997). Used with permission.