Kappa Sig Hdqtrs.: part of the story

[lifesaver]

Lambda Chi Alpha recently split into three seperate corporations (I think it was 2001). They are:

1) Lambda Chi Alpha Fraternity, Inc. - (generally referred to as 'the Fraternity') Manages the membership of the fraternity, its records and provides services to chapters and alumni. Also responisbile for conferences and such.

2) Lambda Chi Alpha Educational Foundation, Inc. - (generally referred to as 'the Foundation') The company that manages the endowment and provides scholarships to the undergrads.

3) Lambda Chi Alpha Properities, Inc. - (generally referred to as 'LCAP') The management company that owns and manages some of the fraternity's houses and properties.

They were split in 2001, and the biggest reason was to protect the other groups. If someone was injured in a LCAP owned house and sued, they could only go after the assets of LCAP, protecting the fraternity itself and most impotantly, the cash cow that is the Foundation.

OR, if someone sued the Fraternity, the Foundation and LCAP would be shielded because they are all now, seperate companies.

They are all housed at the same building in Indy, but I wonder if LCAP was transfered the ownership of the HQ building. It would make sense.

But in Our case, all three are legal corporations all on their own with seperate boards and can and do act independently of each other. There might be statements of understanding between them, yet they do sometimes work in conjunction with each other. For example, all three are pitching in on a new computer system at HQ. Or sometimes, the Foundation will pay for alumni mixers to do fundraising for both the Foundation and Fraternity. Often the Foundation will provide scholarships for the undergrads to attend the Fraternity's national/regional conferences.

The LCAP is the newest kid on the block and was only a part of the fraternity since the mid 90's. The foundation has been around since the 50's. THe author of our ritual donated a portion of his estate upon his death to start it.

[Rudey]

How does Lambda Chi Alpha Fraternity, Inc. get its funding or income if you don't mind my asking?

-Rudey

Originally posted by lifesaver
Lambda Chi Alpha recently split into three seperate corporations (I think it was 2001). They are:

1) Lambda Chi Alpha Fraternity, Inc. - (generally referred to as 'the Fraternity') Manages the membership of the fraternity, its records and provides services to chapters and alumni. Also responisbile for conferences and such.

2) Lambda Chi Alpha Educational Foundation, Inc. - (generally referred to as 'the Foundation') The company that manages the endowment and provides scholarships to the undergrads.

3) Lambda Chi Alpha Properities, Inc. - (generally referred to as 'LCAP') The management company that owns and manages some of the fraternity's houses and properties.

They were split in 2001, and the biggest reason was to protect the other groups. If someone was injured in a LCAP owned house and sued, they could only go after the assets of LCAP, protecting the fraternity itself and most impotantly, the cash cow that is the Foundation.

OR, if someone sued the Fraternity, the Foundation and LCAP would be shielded because they are all now, seperate companies.

They are all housed at the same building in Indy, but I wonder if LCAP was transfered the ownership of the HQ building. It would make sense.

But in Our case, all three are legal corporations all on their own with seperate boards and can and do act independently of each other. There might be statements of understanding between them, yet they do sometimes work in conjunction with each other. For example, all three are pitching in on a new computer system at HQ. Or sometimes, the Foundation will pay for alumni mixers to do fundraising for both the Foundation and Fraternity. Often the Foundation will provide scholarships for the undergrads to attend the Fraternity's national/regional conferences.

The LCAP is the newest kid on the block and was only a part of the fraternity since the mid 90's. The foundation has been around since the 50's. THe author of our ritual donated a portion of his estate upon his death to start it.

[lifesaver]

Originally posted by Rudey
How does Lambda Chi Alpha Fraternity, Inc. get its funding or income if you don't mind my asking?

-Rudey

I dont mind. Unlike some on here, my world dosent cease to exist if people know my orgs. address or something. I also dont see any problem with transparency. We got nothin' to hide.

The Fraternity gets its funding and income from three sources.

1) Undergraduate dues, (undergrad semesterly dues - I think its about $45 a semester, per person in the chapter/colony) fines (levied on a chapter for violations of policy) and fees (initiation, new member fee, chartering fees, etc.) I'd also venture to guess theres a bit of a markup on our insurance bills to cover the cost of handeling the paperwork, etc.)

2) Alumni donations. Alumni can donate to an undergraduate chapter, the Foundation or to the Fraternity itself.

3) Capital Campaigns. Right now the Fraternity (not Foundation or LCAP) is in a capital campaign and as of February, has raised about $2 mil of a targeted $6.5 mil

I know the Foundation has the most money. LCAP is probably the second most valueable, because of the properties it owns and the Fraternity is last. They have some money in the bank and some liquidity, but the other two companies are definately worth more in assets.

The largest employeer is the Fraternity. I'm just guestimating, but I'd imagine the Fraternity employees about 25 staffers. I'd think the Foundation employees about 3-5 and LCAP about 5 or so as well.

[KSigkid]

Originally posted by Rudey
That seems to be the issue with Kappa Sigma right now.

I guess I don't understand how the foundation can just operate so independently without a purpose to serve the fraternity.

So when dues are collected and donations are made, they all don't go to the foundation and not the fraternity/sorority right? Obviously some has to go to the fraternity/sorority to be able to rent from the foundation.

-Rudey

I don't think anyone ever thought that the foundation would operate so independently of the fraternity as a whole. The assumption was that the two would operate hand-in-hand, so when IMH was put up for sale it was a HUGE shock to everyone's system.

All of our dues went to the fraternity as a whole, not the foundation. I think the foundation was funded by donations that were earmarked especially for it.

[Wolfman]

The Friendship Foundation manages all the fraternity-owned properties, including the Omega World Center. The Omega World Center in Decatur,GA is a 5-floor office building, with an adjoining auditorium, in which only two floors are used as the Omega IHQ;the remaining space is leased to businesses and organizations. Friendship Foundation is an independant corporation made up of fraternity members just as the Life Membership Foundation. The present administration has made an effort to coordinate the work of all three entities under the rubric of it theme, "Economic Empowerment Leading to Social and Economic Change." In a previous administration there was a "turf skirmish" between the the fraternity and the foundation,but it has been rectified.
The foundation bankrolls the sholarship program of the Fraternity and other programs, while the housing corporation actually runs the day-to-day operations of the Omega World Center and other properties.

"The value of our fraternity is not in numbers, but in men in real brotherhood..."-Bro. Walter H. Mazyck,Esq.,The Oracle,1925.

[Wolfman]

Here's a link to a pic of our bldg.: http://www.soulofamerica.com/gallery...s/omega_hq.jpg

I hope it works!

"The value of our fraternity is not in numbers,but in men in real brotherhood..."-Bro. Walter H. Mazyck,Esq.,The Oracle, 1925.

[ladygreek]

Originally posted by 33girl
Our foundation is a separate entity that can and has been run by nonmembers. I think the reason that they are separated (the foundation from the GLO) is for tax purposes. Maybe it's that the foundations are nonprofit and the GLOs themselves are not-for-profit (yes these are 2 different things).

Nonprofit and not-for-profit are synonyms. The difference is the type of nonprofit IRS designation--501(c)(3) for charitable purposes--contributions are tax-deductible (foundations,) and 501(c)(7) for the benefit of members--contributions are not tax-deductible (fraternities and sororities.)

As for DST, we have Delta Sigma Theta Sorority, Incorporated, the membership organization. It owns our HQ. Then there is a separate Delta Research and Educational Foundation that rents space within the HQ. They are governed by two different bodies although there is some overlap because of positions within the sorority.

The Foundation has an endowment comprising unrestricted and designated funds. The interest from the endowment is used to fund scholarships and other charitable programs of the Sorority.

Alumnae chapters may set up separate nonprofit corporations/foundations through which to buy property. But these corporations must also have distinct governing boards, and the property must also be used for charitable purposes.

[ladygreek]

Originally posted by Wolfman
Here's a link to a pic of our bldg.: http://www.soulofamerica.com/gallery...s/omega_hq.jpg

I hope it works!

"The value of our fraternity is not in numbers,but in men in real brotherhood..."-Bro. Walter H. Mazyck,Esq.,The Oracle, 1925.

I have been to the Omega World Center and it is indeed very impressive.

[Rudey]

If the dues and donations go to the fraternity, then where does the foundation get its money?

I thought I had figured the whole concept out earlier when I thought foundations hold onto the money so as to shield the fraternity in case of a lawsuit.

-Rudey

Originally posted by lifesaver
I dont mind. Unlike some on here, my world dosent cease to exist if people know my orgs. address or something. I also dont see any problem with transparency. We got nothin' to hide.

The Fraternity gets its funding and income from three sources.

1) Undergraduate dues, (undergrad semesterly dues - I think its about $45 a semester, per person in the chapter/colony) fines (levied on a chapter for violations of policy) and fees (initiation, new member fee, chartering fees, etc.) I'd also venture to guess theres a bit of a markup on our insurance bills to cover the cost of handeling the paperwork, etc.)

2) Alumni donations. Alumni can donate to an undergraduate chapter, the Foundation or to the Fraternity itself.

3) Capital Campaigns. Right now the Fraternity (not Foundation or LCAP) is in a capital campaign and as of February, has raised about $2 mil of a targeted $6.5 mil

I know the Foundation has the most money. LCAP is probably the second most valueable, because of the properties it owns and the Fraternity is last. They have some money in the bank and some liquidity, but the other two companies are definately worth more in assets.

The largest employeer is the Fraternity. I'm just guestimating, but I'd imagine the Fraternity employees about 25 staffers. I'd think the Foundation employees about 3-5 and LCAP about 5 or so as well.

[lifesaver]

Dues go to the Fraternity, but not all donations go to the Fraternity. Some go to the Foundation. The capital campaign currently under way is for the Fraternity, not the Foundation.

The Foundation holds its own fundraising efforts. You can give money to the Foundation or to the Fraternity. When ya make a donation to the foundation, they remind you to make it payabe to the Lambda Chi Alpha Foundation.

The Foundation has had an endowment at its core since its creation in the 1950's. The Fraternity has operating capital and some investments. But I'd guestimate that the Foundation has 100X more cash and investments then the Fraternity does.

[33girl]

Originally posted by ladygreek
Nonprofit and not-for-profit are synonyms. The difference is the type of nonprofit IRS designation--501(c)(3) for charitable purposes--contributions are tax-deductible (foundations,) and 501(c)(7) for the benefit of members--contributions are not tax-deductible (fraternities and sororities.)

I was told that a nonprofit must use any money it makes for operations or philanthropic purposes, and a not-for-profit doesn't set out to make a profit but can keep it if it does (i.e. a hospital is a not-for-profit entity). I didn't say that was definitely the difference between a GLO and the GLO's foundation, just maybe.

[Rudey]

Originally posted by 33girl
I was told that a nonprofit must use any money it makes for operations or philanthropic purposes, and a not-for-profit doesn't set out to make a profit but can keep it if it does (i.e. a hospital is a not-for-profit entity). I didn't say that was definitely the difference between a GLO and the GLO's foundation, just maybe.

http://www.nonprofits.org/npofaq/01/09.html

-Rudey

[ladygreek]

Originally posted by 33girl
I was told that a nonprofit must use any money it makes for operations or philanthropic purposes, and a not-for-profit doesn't set out to make a profit but can keep it if it does (i.e. a hospital is a not-for-profit entity). I didn't say that was definitely the difference between a GLO and the GLO's foundation, just maybe.

A fiscally strong nonprofit (of any kind) is one that is able to have a fund balance at the end of the year, i.e. revenues exceed expenses. It is strongly encouraged. Usually it is put into a reserve or if the nonprofit owns property it may be used to fund depreciation. A strong nonprofit maintains at least a six-month operating reserve.

Above that, net funds are usually used toward the next year's operating budget.

Many hospitals and medical clinics are incorporated as nonprofits. However, lately there has been much scrutiny of this because of the abuse of their nonprofit status.

[madmax]

Originally posted by Rudey
But doesn't one control the other or no?

-Rudey

One could control the other but not always. In this case, the "Kappa Sigma" Foundation should really be named the Richard Miller Foundation. This is a private foundation that was started by Richard Miller and it is independant of Kappa Sigma Fraternity. It would be like anyone of us starting our own foundation with the purpose of helping our organization. The person who signs the checks is in control. If Miller wanted to give control to Kappa Sigma Fraternity he could have named the fraternity's officers to the board of the Foundation or he could have the given the building to the Fraternity as a gift. Kappa Sigma Fraternity screwed up by letting Miller use the name Kappa Sigma Foundation because he then solicited donations in the name of the fraternity but the fraternity did not have control of those donations.

As far as who is legally right and wrong, I'm taking the side of the Foundation. Miller put up the money. He bought the building. He started the Foundation to manage the building. Any decisions regarding the building are up to the Foundation.