Over the years, I have had the experience of watching many members of community organisations demonstrate great glee during meetings when the Treasurer’s report is given. The reason for their glee is the balance of the organisation’s bank account. The challenge here for community organisations is to reflect on their purpose as defined in their Rules. I have yet to see an organisation whose Rules contained the purpose, “To build the balance of the organisation’s bank account to as high a figure as possible”.
Community organisations generally have purposes that involve returning money to their community and/or members in line with their purposes. Service clubs are a prime example where they usually run two separate accounts. One is for money raised from the public which must be returned to the community. The other is for money raised by the members directly to fund the administrative needs of the club. It is the publicly raised funds that the focus is on in this article.
Several service clubs are known for having Distribution Events where they distribute the balance of their account to the community. This is often an annual event and cause for celebration. Others however may not have such events and see the size of their bank balance grow and grow. Such an attitude is surely questionable given the purpose of these organisations. What is your organisation doing?
Purpose Driven Community Organisations
Many community organisations that are purpose-driven may need to consider where their funds need to go. Is your local environmental improvement organisation putting funds back into the planting of trees, raising awareness of environmental impact or even holding events to educate people on conservation and the environment? Do you have a tourism development organisation that is using funds raised from events and other activities putting that money back into the community in terms of signage, promotion or the area and other purposes for which it was formed? Is your local sporting club using funds to provide uniforms and equipment to assist equitable participation in sport by disadvantaged youth to assist in breaking the poverty cycle? The concept is clear so what questions might you have about your organisation or others in your community?
Some community organisations are fortunate enough to generate considerable surpluses each year through the hard work of volunteers and the support of communities. Rather than holding large sums in non-specific bank accounts, however, perhaps it might be a better idea to develop a project for the organisation. Money transferred to such an account keeps the organisation focused on the goal and also provides transparency to the community at large.
An example here is a Lions Club that is seeking to build an aged care facility in their town. They place 20% of all funds raised into an Aged Care account specifically for that purpose. It is then perfectly clear to members, and can also be reported to the public, how the project is developing. The same concept could exist for a Tourism body looking to build bike trails or nature walks with signage in their local bush.
Goals and Objectives
The most important principle to consider is whether or not your community organisation has a goal and objective for its fundraising. Purposes existing in Rules and Constitutions can often be somewhat generic and there is certainly good reason for setting organisations up in this manner. It will allow for changes over time. However, it is arguable that any organisation needs to have a current purpose and objective that members are working towards. This can then be communicated, not only to members but to the community as well. Having large sums in bank accounts with no purpose can lead to the community at large having no trust in your community organisation being true to its values and purposes.
In summary, have a look at the balances in your community organisation’s bank accounts. If they are sizeable, ask the questions about why that is the case. Examine the Purposes set out in the Rules for your community organisation and ask yourself and the organisation if they are being met? Is a Distribution Event a possibility for your organisation to put money back into the community? Is it worthwhile to put a long term project in place and allocate funds towards the project in a separate account? But whatever you do, please challenge your community organisation if it is simply accumulating cash with no clear intention of how it will be used for the benefit of your community.