The Elephant in the room

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Paul Hawker

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Looking for some input here, and perhaps get some advice for Presidents of regional clubs that are considering moving over to ***.

What should happen to the money in their VCA Regional Club account, and to other assets, they may have received from VCA or their VCA members.

Assuming that some of their regional members will wish to go over to the ***, and some will wish to remain with VCA (from lots of forum posts), what should the regional presidents do with their club assets.

I have heard from different presidents different opinions on what is the right and legal (sometimes they are different) thing to do with the money received from VCA and their membership.

Normally when a club president steps down, he will turn over his club reins to the next president. He will leave the club set up as it was, and transfer all powers over to the next person.

It may be unpresidented for them to take the money, or any club assets with them.

They usually turn over the bank account, the state incorporation status, etc to who ever volunteers or is elected to continue on with running the club

Would like to get comments from all sides as what should be done with this "Elephant in the room"

Especially would like to hear from anyone with legal experience in this field.
 

GRANGER73

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I would think that any succession would be covered in each of the individual club's bylaws. In some cases the club will continue to operate. In other cases dissolution maybe the end result.
 

Coloviper

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There is no Elephant! To answer to all your questions, you might want to consult Bob Pantax and he will have all the answers you seek. As far as the money, each region is incorporated as it's own company, in it's own state, with it's own bank account and it's own executive staff (Pres., VP, treasurer and secretary). VCA Corporate does not own this locally and never did. It is no different than an owner in Ohio who owns the building, local business, etc. but runs a McDonald's franchise. McDonald's does not own the building, nor that business, but they do own the franchise rights which dicatate how to run that business, the product, etc.. VCA Corporate is nothing more than a franchise. Why are you the least bit concerned about this situation Paul? You are not on the VCA board, etc. as it is their position to handle with real lawyers and paid legal advice. Your request is telling to say the least and without merit. I believe it is better directed at the VCA Board, would you not think?
 

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My best guess is ANY AND ALL MONEY LEFT will go to LAWYERS until the well is dry. SAD BUT TRUE
 

doctorbob

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Advise legal opinion. I would think monies provided to the regionals by the VCA should be returned.
 
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Paul Hawker

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Coloviper

Not taking any sides on this issue, however a number of friends of mine are Regional Presidents. They are going to need to know what is the proper way to handle this.

As said, the Presidents would most likely want to know the proper proceedure to take during this transition. No desire to have the lawyers get involved after the fact. That will just weaken both clubs, and hurt SRT as other forums pick up on the squbbling.

Do not feel that there is all that much money involved in this, as most clubs will most likely spend down most of their funds with a holiday party or event, however what is there should be accounted for, and handled in the proper manner.

I would expect that VCA would take steps to see that any dissolutions are handled properly, and I would also expect that most Regional Presidents would want to do the same. I also believe that *** would be all for having things done properly for any clubs that wish to change affiliations.

It may be totally a problem if a club would co-mingle funds between associations in one state, while in another, maybe no problem. I would even beilive there might be different regulations in different counties within the same state.

Regional Presidents are the ones responsible for signing annual tax returns. Those that switch at a different time other than their fiscal year end may decide it is best to file two different terms if it is in the best interests of their individual clubs.

For example, what would happen if a President wanted to move to ***, while the club Treasurer wanted to stay with VCA. What if their articles of incorporation had lapsed. (As Zone Director, I was always after my clubs to make sure they were up to date with their respective paperwork.)

In some clubs the Presidents signs the checks, in others the Treasurer does this. Some require two or more signatures to be official. Some just work out of a separate checkbook in one of the officers names, with no incorporated complications.

Lots of these little matters to be addressed, and I believe it should be looked at before, rather than latter.

In other words, if a regional club decides to transition, they should give it the proper thought to be sure all is done correctly.

I know several clubs that are investigating the best way to handle these issues, and if their respective representatives would share their findings, it may save a lot of work for everybody.

Believe this would be better for all involved.
 

MoparBoyy

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why should it be returned? it was given to the region for there use. the VCA never decided what the money was to go for, saving, events, etc. thats up to the region. if they were good with the money and invested it (selling swag, setting up fundraisers, etc) its theres to keep. if they voted to leave the VCA, then its there money. its up to the *** of the region, NOT VCA.

why is this even a question?
 

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Since the VCA answered that they have no affiliates or chapters on their taxes I don't see how national would be able to recoup anything from anyone.
 

GreenVenom

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Doesn't matter, as of January 1 2014 when some (most) regions move to the *** and the VCA chapter is dissolved in that state all assets left over can be transferred to any non-profit organization leadership wishes. 2013 VCA Members recieved their full year of participation and therefore are no longer entitled to any other benefit beginning with 2014. Think about it like an insurance policy you paid for a year in advance. At the end of that year you had the coverage agreed to for a year whether you submitted any claims or not, and are no longer entitled to any other benefit and whatever the insurance provider does with your premium is up to them regardless of your wishes. Been there done (even got a T-shirt once) this several times. As one organization was dissolved $$ were transferred (donated) to similar organizations.
 

GreenVenom

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For what it's worth, these groups I was involved in did throw some epic events that all members were invited to participate in order to reduce the treasury before dissolving.
 

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Hi Paul. Is there anything in writing as to what the amounts paid to the "franchisees" was to be used for and when it was to be used? The analogy that seems to fit is the following:

Assume a Burger King franchisee decides to terminate its franchise agreement with Burger King and go with McDonalds. Further assume that it has received a payment or payments from Burger King while it was still a Burger King Franchisee that was conditioned on it being a franchisee and was intended to be spent on matters related to it being a Burger King franchisee.

If that analogy holds here, it seems like that if a departing local club spends what it has received before the end of the year, there is no issue. So my recommendation for those Regions is to use the remaining funds and to party out. Just have a designated driver and make sure that old and new club people are invited and feel welcome.

Cheers - as George would say.
 

doctorbob

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I retract what I said. Party on! Easiest way to resolve any issues is to have no funds related to the VCA.
 

Sam Goldfarb

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The funds were already returned, to the regions, where they came from to begin with. The members from each region sent their dues to National VCA who returned approximately half to the regions to operate. There were no paid positions in any regions that I know of and the funds were spent to benefit those members that participate in Regional events. The only issue that could come up would be a region that wanted to have a VCA chapter and a *** chapter. Simple solution, take a head count, divide the remaining money and assets by the number of members and distribute to each according to the count. Or, refund , per person, their share and let them join one, both or none.

There is no "franchise" relationship, there was no "franchise" fee or "franchise" agreement. Look at the VCA tax returns, NO Chapters! Problem solved, ***** the lawyers! One lawyer in a town goes broke, two lawyers in the same town eventually own the town!
 

Nsane1

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I'm wondering if this is getting muddled. I don't think anyone is talking about monies being "returned" I think we are talking about monies being "retained".

EX: Officers of VCA Region A decide to leave, new Officers of VCA Region A step forward and wish to continue VCA Region A. Should this region, with perhaps a decade+ of continuity in that region, along with a Treasury, be forced to start from scratch? Keep in mind these new officers of Region A, are current members of that same region (and obviously 2014 members).

Given that almost every region in the world has 2014 VCA members, this is a real issue. These particular members were not served by their officers that took Region A, it's heritage, it's treasury, somewhere else. Clearly, they wanted that Region to stay VCA, or they wouldn't have renewed.

Unfortunately, it's not just about money, it's about history, a business presence, and serving members appropriately.
 

FOViper

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EX: Officers of VCA Region A decide to leave, new Officers of VCA Region A step forward and wish to continue VCA Region A. Should this region, with perhaps a decade+ of continuity in that region, along with a Treasury, be forced to start from scratch? Keep in mind these new officers of Region A, are current members of that same region (and obviously 2014 members).

Given that almost every region in the world has 2014 VCA members, this is a real issue. These particular members were not served by their officers that took Region A, it's heritage, it's treasury, somewhere else. Clearly, they wanted that Region to stay VCA, or they wouldn't have renewed.

Unfortunately, it's not just about money, it's about history, a business presence, and serving members appropriately.

Please provide a list of official VCA regions for 2014. Regions that have fully committed to stay with VCA for 2014.

Also, which regions have people that are willing to "step in" and take over the VCA titled region?
 

johniew398

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why should it be returned? it was given to the region for there use. the VCA never decided what the money was to go for, saving, events, etc. thats up to the region. if they were good with the money and invested it (selling swag, setting up fundraisers, etc) its theres to keep. if they voted to leave the VCA, then its there money. its up to the *** of the region, NOT VCA.

why is this even a question?


I agree and if necessary take a vote with the region members deciding.
 

Bobpantax

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Interesting. Based on your assumed facts, it would seem appropriate for VCA Region A to retain the funds. The funds were paid to VCA Regions not new club Regions - assuming any funds are left at the end of the year.

The question I have is why are the new Region people concerned about this? Based on some of their posts here, they say the new club is doing well. So if that is the case, each new Region should receive some money from the new national club shortly after the first of the year.

Is there a concern about money being available for distribution to the Regions of the new club by the new club's national office? I did notice that the FAQ issued by the new club (that was posted here recently) was a little fuzzy on that point.



I'm wondering if this is getting muddled. I don't think anyone is talking about monies being "returned" I think we are talking about monies being "retained".

EX: Officers of VCA Region A decide to leave, new Officers of VCA Region A step forward and wish to continue VCA Region A. Should this region, with perhaps a decade+ of continuity in that region, along with a Treasury, be forced to start from scratch? Keep in mind these new officers of Region A, are current members of that same region (and obviously 2014 members).

Given that almost every region in the world has 2014 VCA members, this is a real issue. These particular members were not served by their officers that took Region A, it's heritage, it's treasury, somewhere else. Clearly, they wanted that Region to stay VCA, or they wouldn't have renewed.

Unfortunately, it's not just about money, it's about history, a business presence, and serving members appropriately.
 

FOViper

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Is there a concern about money being available for distribution to the Regions of the new club by the new club's national office? I did notice that the FAQ issued by the new club (that was posted here recently) was a little fuzzy on that point.

I'm not sure how this is fuzzy:

• We distribute regional subsidies on a monthly basis. Also, the dues the regions receive are for that month. The VCA disburses every 3 months and withheld regional dues from 4-9 months (It's published: dues received in Jan 2013 weren’t paid to regions until at least July 2013). Our method alleviates the cash flow burden put on the regions. VCA national delays regional disbursements because of cash flow burdens for funding national operations (this has been admitted in writing).
 

Sam Goldfarb

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Again, the simple solution is to "refund" the money to each Regional member and let them each decide where to spend the money. VCA, ***, Both or None. Or, as was the case in Ohio, vote. We had one person against ***, 2 wait and see what happens with both clubs and the rest were for *** move. While not everyone voted, I would think that those that felt strongly either way did. We always had many people pay their dues every year and show up for one event. Others paid every year and we NEVER saw them. Maybe all they wanted was a magazine and an ID badge, whatever it was I must assume that they were happy with the value they were getting or they would not have continued to pay their dues.

When a non-profit is dissolved, generally speaking, you can only distribute money and property after you have paid off all of your nonprofit’s debts. For distributions, there are specific rules you will need to follow. For example, your nonprofit must return any items that were loaned to it on the condition that they would be returned upon dissolution. In addition, after paying off debts and returning loaned assets, a dissolving 501(c)(3) organization must distribute its remaining assets for tax-exempt purposes. In practice, this usually means distributing assets to one or more other 501(c)(3) organizations. Other distribution rules, contained in your articles of incorporation, bylaws, or a plan of distribution, may also apply. A VCA 501(c)(3) Region could legally transfer it's assets to a *** 501(c)(3) Region!

The Regions are separate legal entities from National VCA and should be able to decide who to affiliate themselves with, without having to dissolve themselves, making the issue moot!

Dividing up cash to members without dissolving the non-profit should not be problematic. It wouldn't be any different than "partying" all the cash away and if the cash actually never transfers between parties then it may avoid any issues. The concept of consideration might work and everyone could "sell" a can of soup to the region for an amount equal to their "share". Then they join the club of their choice paying their dues and "donating" an amount that they feel adequate. The Region in return gives them a pen or key chain as a token of appreciation and donates all the collected soup cans to a homeless shelter.

The issue is only important, if a Region wants to have both VCA and *** and members are making demands to divide the funds.

Dibs on Movie Rights!
 

MoparBoyy

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they are not dissolving the non-profit.. any region who is leaving VCA is doing just that. they are a non-profit own by there own ***, if the *** decides to change associations. its there choice, THEY are the ***, not VCA. Even if they decide to go independent.. the VCA has ZERO say in how they run there non-profit.
 

Bobpantax

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The national and the regions are, or at least are supposed to be, 501(c)(7) organizations. They would not qualify as 501(c)(3) organizations. I do not think that it is proper to make distributions to members of money under state non profit law or applicable Federal tax law. So, unfortunately, paying members is not a viable alternative.
 

SHEVIPER

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Please provide a list of official VCA regions for 2014. Regions that have fully committed to stay with VCA for 2014.

Also, which regions have people that are willing to "step in" and take over the VCA titled region?

I would like to know this as well.
 

TrackAire

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Let's cut to the chase....I doubt that any region has a lot of money left in the regional account. So if the regions do have left over money with no VCA region left to leave it to....donate the monies to a children's hospital or children's charity.

Don't stupidly use the monies on a party just to burn through the funds.....Karma's a *****, you don't want to **** her off. That goes for both clubs.

Cheers,
George
 

Bobpantax

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Great idea George. And it certainly is the right time of year to do it.

Let's cut to the chase....I doubt that any region has a lot of money left in the regional account. So if the regions do have left over money with no VCA region left to leave it to....donate the monies to a children's hospital or children's charity.

Don't stupidly use the monies on a party just to burn through the funds.....Karma's a *****, you don't want to **** her off. That goes for both clubs.

Cheers,
George
 
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Paul Hawker

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As a side note, I know of one Canadian Regional Club that I believe has many thousands of dollars in their slush fund. If anyone knows the rules in Canada, this might also be helpful.
 

Nsane1

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The generalization that the regions won't have money is VERY false. Some regions have huge sponsorship bases, and have tens of thousands of $$ in their treasuries.

Again, it's not all about money though. Why should a ""new" VCA Region have to start a new 501c7 when it has existed for 10 years.

As to a request of who is out who is in, we don't spend time making fun, pretty, yet divisive maps. I've told you virtually every existing region in the world has members. We have received formal notice from 6 or so that they are out, and we are actively getting replacement officer groups in each of those areas. Several have already been identified and announced to those regions.

The simple fact is some are still on the fence, and some are waiting until the last minute to give notice, so there really is no way to know. If we go off people's words, a lot of the Presidents have expressed their desire to leave, so we'll make "new" clubs, as I've mentioned there are PLENTY of members.

Hence the reason for the question... We are gonna have to create a lot of "new" clubs that are 10, 20 years old, which personally seems wrong to me.
 

knuk

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The funds were already returned, to the regions, where they came from to begin with. The members from each region sent their dues to National VCA who returned approximately half to the regions to operate. There were no paid positions in any regions that I know of and the funds were spent to benefit those members that participate in Regional events. The only issue that could come up would be a region that wanted to have a VCA chapter and a *** chapter. Simple solution, take a head count, divide the remaining money and assets by the number of members and distribute to each according to the count. Or, refund , per person, their share and let them join one, both or none.

There is no "franchise" relationship, there was no "franchise" fee or "franchise" agreement. Look at the VCA tax returns, NO Chapters! Problem solved, ***** the lawyers! One lawyer in a town goes broke, two lawyers in the same town eventually own the town!

Lets complicate this even more.... our region has always carried a healthy balance in the bank account from year to year. Now, should a member who just joined this year recieve the same share (if money is given back to members) as someone like me - a 16 year member? Or do we go back and prorate all refunds?

WE NEED THE BOARDS VIEW ON THIS ASAP....HELLO??????
 
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