Funding & Funds | Alumni Association of the University of Michigan                            

Operating vs. Scholarship Funds

In addition to a club's operating funds, most clubs also have scholarship funds supporting local students. Operating funds and scholarship funds serve different purposes and should be kept in separate accounts. Neither operating funds nor scholarship funds should be co-mingled with a club leader's individual funds. Keeping them separate reduces the risk of liability and provides a mechanism for clearly tracking a club's income and expenses.

Operating Funds

Operating funds are utilized to cover expenses related to club operations and events (e.g., club events, meetings, promotion).

The Association recommends that a club keep its operating funds in a club checking account (and, if appropriate, a savings account) under the club's own Taxpayer Identification Number (TIN). To apply for a TIN (which has no effect on a club's tax status), use federal tax form SS-4 (.pdf).

The Association recommends that club banks accounts have two authorized signers for larger amounts (e.g., more than $100 for smaller clubs; more than $500 for larger clubs).

Club officers should include their titles when signing checks to reduce the possibility of personal liability.

Bank accounts should be reconciled promptly, and the club officer reviewing the statements should share a copy of them with the other signer and/or another officer. This control mechanism allows for early detection of problems.

Scholarship Funds

Scholarship funds are those club funds designated for support of U-M students.

The Association recommends that all scholarship funds with more than $10,000 be maintained by U-M. 

To the extent a club maintains scholarship funds in an account outside of U-M, the above guidance regarding maintenance of operating funds applies to scholarship funds as well.