2009 Financial Recap
by Michele James • February 2010 • 9 Comments •
Lambda Chi Alpha Fraternity concluded the fiscal year 2009 (ended June 30, 2009) with total assets of $4.412 million. The Fraternity had revenues of $4.0 million. The majority of revenue generated comes from undergraduate fees with the remainder coming from alumni contributions, investment income, royalties, and event registration. During this same period the Fraternity had expenses of $3.72 million. Income for the year came in at a healthy $276,180. After write offs of bad debt however, the Fraternity posted a total change in net assets of ($389,348) reducing the Net Assets to $1.861million from $2.250 million a year earlier.
Over the last five years, total membership revenue has steadily increased with an annualized growth rate of over 5 percent. While the average number of chapters remains solid around 200 the average membership size at each chapter has grown from approximately 41 in 2005 to 51 in 2009. The Fraternity spends more than 64% of its annual operating budget directly on programs and services for chapters.
Lambda Chi Alpha Fraternity is well positioned for the future. Net assets have steadily increased over time from $584,079 in fiscal year 2005 to $1,861,000 in fiscal year 2009, tripling in a five year span.
John Gezelius Says:
February 2nd, 2010 at 4:51 pmExpenses are up approximately $800K from last year; what are we doing now that we were not doing before? Colonization efforts perhaps?
Bruce Belden Says:
February 2nd, 2010 at 5:26 pmI think management should give us further explanation of the large asset write-off ($665,528 by my calculation – $276,180 + $398,348). This is a very significant amount of money for an organization with total net assets of $1.8 million. The amount is not even mentioned specifically, which does raise the question of why not.
Jason Lenox Says:
February 2nd, 2010 at 5:32 pmBruce;
Could it be from writing off the LCAP properties that were sold at a loss, after being managed into the red?
Zax
Jason Lenox
Phi Tau Zeta # 274
Mike Harris Says:
February 2nd, 2010 at 11:40 pmA response to Bruce Beldon’s question would be appropriate. Thanks.
In ZAX,
Mike Harris
Alpha Lambda 711
Bob Koch Says:
February 3rd, 2010 at 12:57 pmBrothers:
As a member of both boards (Fraternity and LCAP),I can tell you that brother Lenox’s comments are close. The Fraternity wrote off the receivable that had supported LCAP’s operations for several years. We did that in two phases, first in 2008 and then the balance in 2009. That is the reason for the loss for our Fraternity last year.
LCAP, which is a separate entity, has also been selling its properties in the worst commercial real estate and banking environment in the past 50 years. While LCAP still has some properties, most are either under contract or have been leased out to eliminate their previous negative cash flow. The future impact to our Fraternity should be minimal.
Tom Earp Says:
February 3rd, 2010 at 1:51 pmBrother Lenox and I have discussed before and that along with other Brothers, LCAP was a total failure.
It hurt a lot of Zetas the way it was handled. The thought was great, but it was not run right as some of us know.
Ask about UMass, Un.Mo, Shippensburg, being three as an example.
Tom Earp
LX Z 1
Michael Byington Says:
February 3rd, 2010 at 4:38 pmThe flashing inconsistency between the last paragraph of the written recap and the incongruity with the balance sheet’s ”Summary” differences between FY08 and 09 “Expenses” begs an explanation.
Curious Says:
February 3rd, 2010 at 6:17 pmI wish it didn’t take seven months from the fiscal year’s end to release a financial report. I’m glad my fraternity is out of the vat of red that was five years ago, but really let’s get a move on!
Dennis Spahr Says:
June 4th, 2010 at 9:14 pmI would think that there might be a possibilty that Headquarters would have some legal liability for LCAP’s losses if not a moral obligation. LCAP may have been set up as a separate entity, but they share officers and board members. Shouldn’t financial reports have a comment from General Council or other legal expert opinion as to possible exposure to LCAP’s problems by the LCA Headquarters and its officers and board. Is there any money set aside for possible contingencies. I am not a legal expert, but it just seems to me the fraternty should look to protect itself for any consequences from LCAP.