Managing the Chapter's Finances
A newly formed chapter will want to open checking and savings accounts; most banks are offering free checking accounts these days. After an account is established, FNPS will send membership support checks twice per year, once in January for July-December and again in July for January-June. It is recommended that two authorized signatures are required on the bank account and that the FNPS Chapter set withdrawal limits. For example, spending thresholds of over $200 of unbudgeted funds may require approval by the FNPS Chapter BOD and/or the executive committee. For expenditures over a certain amount, say $500 or above, approval may be required by the general membership. These requirements should be clearly stated in the Chapter’s bylaws.
It is a certainty that Chapters will soon be using Debit/Credit Bank Cards to access their funds for the convenience of on-line purchases and payment of fees or taxes. Bylaws and procedures should clearly address use of these Bank Cards—because the card does not need to be present to order on-line, special care should be taken to ensure the security of Chapter funds.
Bookkeeping is maintained by the Chapter’s Treasurer. The extent of this bookkeeping is determined by the size and type of organization and 501(c)(3) status. Minimally, a balanced checkbook ledger should be maintained, with specific detail to identify both the sources of revenue and nature of expenditures. The Dade Chapter has developed a Treasurer's Manual to help manage their finances; Chapters may find good ideas here to replicate.
Most Chapters will want to maintain a spreadsheet or other accounting system, such as Quickbooks, that allocates expense and income according to a chart of accounts. It makes good sense to have these accounts (or labels) correspond with financial reporting requirements. For example, registering with the Florida Department of Agriculture and Consumer Services (FDACS) to solicit funds requires Revenue and Expenses to be reported using their electronic reporting system (see https://www.freshfromflorida.com/Business-Services/Solicitation-of-Contributions and https://csapp.800helpfla.com/csrep/ or on an IRS Form 990-EZ.
Fundraising should be a part of your Chapters organizational planning. Historically, FNPS and the FNPS Chapters have generated funds through merchandising, giving presentations or classes, or providing a service, such as plant surveys on public property. FNPS Officers, Board Members, or Committee Chairpersons can supply ideas and names of FNPS Chapter representatives who have been successful in fund raising ventures.
FNPS Chapters may use any means of raising funds that are consistent with:
- FNPS Bylaws,
- Internal Revenue Service (IRS) regulations of a tax-exempt organization (if the FNPS Chapter is either a 501(c)(3) or under the GEL program),
- Florida sales tax requirements, and
- The Florida Division of Consumer Services rules for solicitation.
Chapters can take donations but they are not tax-deductible unless the chapter has 501(c)(3) status or is a participant in the FNPS Group Exemption. Charitable Organization Registration. In order to engage in solicitation in Florida, FNPS Chapters must register with the FDACS and pay a fee annually. As of this writing, the application is completed in-full initially, and then red penned (except for financials) in subsequent years.
Links You’ll Need
Register to solicit contributions: http://www.800helpfla.com/socbus.html
View your on-line registry with FDACS:
FDACS reports on-line about your Chapter, and reports your financials for all to see. If you do a search for Florida Native Plant Society in the Gift Givers Guide, you will see that there is much variability in financial patterns among Chapters. When you register and state the “purpose” of your organization, you may want to copy the FNPS example, which deals with what will be provided through donated funds.
“To provide conferences, workshops, programs and publications, available to the members and the public, at reduced rates or no charge, promoting the preservation, conservation, and restoration of native plants and native plant communities of Florida.”
Some counties also require a Charitable Solicitation Permit. Contact your local county government for information.
A charitable organization registered with the FDACS must include the following information on any printed solicitation, written confirmation, receipt, or reminder of a contribution:
- The registration number
- The percentage of each contribution that is retained by a professional solicitor
- The percentage of each contribution that is received by the organization
Many Chapters sell native plants and seeds, arts and crafts, books, T-shirts, packets of native tea, bumper stickers, pins, patches, and mugs. Although this has traditionally happened at meetings or events, we suspect that on-line merchandising will soon catch on. The Dade Chapter FNPS developed a Merchandise Proceedures Manual to capture all the intricacies of merchandising, and we thank them for letting us include it here.
Please note: All Chapters need to collect sales tax in Florida for merchandise sold.
Florida Sales Tax and County Surtaxes
If an FNPS Chapter intends to sell any items, it must obtain a Florida Annual Resale Certificate for Sales Tax "business partner number", collect, and pay the sales tax. A sales tax application and e-pay system are on the Florida Department of Revenue website (summarized instructions below).
Tax Exemption Not for Sales
A 501(c)(3) nonprofit can apply for Sales and Use Tax exemption on Application Form DR-5 and receive a Consumer's Certificate of Exemption (Form DR-14) so that the nonprofit doesn't have to pay sales or use tax on purchases "when used in carrying on customary nonprofit activities," [quoted from DR-5]. Do not use DR-14 to purchase items for resale, instead use the Florida Annual Resale Certificate for Sales Tax (DR-13) explained below.
Applying to e-Pay Sales Tax
When a nonprofit sells, it must pay 6% (plus the local surtax percentage, if any) of gross receipts. Since selling creates a legal relationship with the Florida Department of Revenue, the Chapter nonprofit Board should authorize sales and appoint someone to complete Application for DR-1 and "sign it" (online) using the Chapter's EIN (IRS: Employer Identification Number). Before you apply, determine your "Filing Frequency" based on your expected gross receipts (the chart is mid page). If your annual gross sales are under $1000 per year, you can request quarterly payment; under $500, you can request semi-annual payment; under $100 you can request annual payment; otherwise you need to pay monthly.
Register online at: http://dor.myflorida.com/dor/taxes/registration.html#register and look toward the bottom of the page for the links shown here (on the image at the left). Yes, it's long and tedious; hang in; most answers are no or do not apply. You can stop and later resume using the second link. You will receive a Certificate of Registration (Form DR-11) and can retrieve its number anytime using the third link. You will also receive the Florida Annual Resale Certificate for Sales Tax (Form DR-13) with a "business partner number" on the back. The DR-13 will expire on December 31 and be automatically renewed if your account is active. Filing and Paying Sale Tax Electronically explains how to pay online and includes (at the bottom) "How to e-file and pay without enrolling". Enrolling allows you to save the Chapter bank account number and prior payment history online; deductions from the account occur only as you direct.
Payments Using e-Pay
Payments are due on the 1st of the month following the end of each Filing Frequency period and are late on the 20th day. For example, a semi-annual Jan-June period is due July 1 and late July 20. Reminders are emailed. You must report $0 if no sales were made during the period. However you elect to pay, your EIN and "business partner number" (on the back of the DR-13) are required. The Enrollment page is here. Wishing you large gross receipts.
Most Chapters sponsor at least one Florida Native plant sale during the year. This is a great opportunity to do a lot of public education while making revenue for the Chapter. Plants usually are either propagated by the membership or purchased at a wholesale price from a local native plant nursery, or both. In any case, it is advisable to sell native plants that naturally occur in your area, and ideally come from local plant material. Not only will the plant be likely to perform better, but there will be no risk of accidentally introducing a different genetic strain into your local populations that may reduce the fitness of local populations placing them at risk of extinction. The FNPS website has a listing of plants by county where you can get ideas for your plant sale.
Important: Florida requires anyone who is selling or growing plants to register with the state. If you are selling plants grown by a licensed Florida nursery, you will need to apply for a Certificate of Stock Dealer Registration. You can learn more from FDACS. If you are growing plants or selling plants grown by non-licensed growers (including chapter members) you will need to apply for a Certificate of Nursery Registration.
Over time, some best practices have emerged for a successful plant sale. These include, but are not limited to:
- Bring adequate change in the cash box, especially ones.
- Label plants clearly with scientific and common name.
- Show off the natives! Provide a local variety of trees, shrubs, grasses and wildflowers.
- Provide profile sheets or cards with cultivation tips.
- Laminate a profile that shows the plant in bloom (especially important if plants are not in bloom during the sale!)
- Group plants according to habitat, water requirements, or landscaping compatibility.
- Sell a butterfly garden "kit."
- Create a display showing native plants in an attractive home landscape.
- Bring reference books, both for landscaping and field identification.
- Offer other merchandise during the plant sale – some people live in apartments!
- Give all shoppers a membership brochure and review the benefits of membership.
- Distribute the Association of Florida Native Plant Nurseries Real Guide for Florida Gardeners.
Native plant seminars, classes, or slide shows have also proven to be effective fund-raisers.The speaker can request that a donation be made to the Chapter in lieu of an honorarium or payment. Community organizations are usually willing to negotiate a donation amount on this basis. Another approach is to charge participants a registration fee to attend a class or seminar. If you have a free venue and a free speaker, your Chapter can bank the income. However, you may be able to charge a larger registration fee and draw a larger audience with a big name; in this case part of the revenue may go to an honorarium and hall rental, but it may be worth it. Sponsoring and marketing a public seminar will also promote your Chapter while generating revenue!