Association finances
Tamypedia
This section of the Organizational Guide discusses the finances and financial management of an association. Often one of the central questions for association members is whether the funds will suffice, and what to use them for. This section focuses on the financial management of an association and what all association members - particularly board members - should know about it.
Those with keen interest in financial matters may avail themselves of a wide selection of accounting guides after reading this introductory section. At the beginning of the year, Tamy organizes a training occasion to all treasurers of associations operating within Tamy, with comprehensive instructions on financial affairs management; at the end of the year, there's another training session on the creation of a financial statement.
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Starting point: Managing the financial affairs of a nonprofit association
Associations can be classified into nonprofit and financial ones.
The Associations Act includes regulations that govern nonprofit associations. They don't concern associations whose aim is to generate profit or procure some kind of financial advantage. The purpose of a nonprofit association is to promote an ideological purpose, as determined in the rules (see example below).
An example of an ideological purpose determined in the rules
The aim of the association is
1. to function as a link between students of occultism at the University of Tampere as well as support their general, shared, intangible and tangible goals.
2. to supervise the interests of its members in the alchemy unit of the University of Tampere, in the University administration, the Student Union and other units important to students of occultism.
3. to promote its members' ability to study and develop teaching of occultism at the University of Tampere.
A nonprofit association may practice only such financial activity
1. that has been determined in its rules (see example below)
2. that immediately relates to the realization of the association's goals (such as collecting entrance fees to events)
or
3. that is of little financial value (such as jumble sales, overall badge sales)
This is why you should list list any larger sources of income in your rules that do not directly relate to the realization of the association's goals.
An example of financial activity determined in the rules
To support its activity, the association may receive grants, donations and testaments; own real property to carry out its activities; and organize raffles and other types of fund-raising events.
According to the Income Tax Act section 22, an association is considered nonprofit if it works exclusively and directly to promote public welfare in a spiritual, ideological, moral or societal sense; if access to its activities is not limited to a specific group of people; and if it does not procure pecuniary benefits to members as dividends, financial profit, unreasonably high wages, or in other forms of financial compensation.
A nonprofit association is liable to taxes only with regard to its business income. It is exempt of property tax.
Further information
Monetary transactions in the association
Bookkeeping
Accounting period
Financial statement
Auditing
Fund-raising
Good practices
