Not a target. Not a goal. A cap the bylaws require and board policy enforces.
Management and general expenses shall not exceed the greater of $8,000 per fiscal year or five percent of total annual revenue. — LCV Financial Stewardship Policy, adopted under the Bylaws
Most organizations tell you an overhead percentage they achieved last year. It’s a result. It can change. Nobody has to answer for it.
Ours is a ceiling the bylaws require the board to maintain. The dollar floor lives in board policy so it can track real insurance and filing costs — but every change to it, and our performance against the cap, must be disclosed to the members in the annual report. Exceeding it takes a recorded vote, allowed only for extraordinary legal, insurance, or regulatory costs. If we ever break it silently, that is a governance failure, not a rounding error.
That’s the difference between a marketing number and a rule.
This is not a definition we invented to flatter ourselves. It’s how the IRS Form 990 itself categorizes nonprofit expenses: management and general vs. program services. We use their line, not a friendlier one.
One refinement from the same rulebook: payment processing fees are a cost of raising funds, not administration, and are reported as fundraising expense — the three-way split (program / management & general / fundraising) the Form 990 requires.
The cap reads “5% of revenue, with a fixed $8,000 floor.” Here’s the honest reason.
Fixed costs like insurance, state filings, and accounting software don’t scale down with a small budget. At startup scale, those unavoidable costs exceed 5% of a tiny budget no matter how frugal we are. A pure 5% rule would make it mathematically impossible to carry insurance, which would be irresponsible.
So the floor covers what never scales down — insurance, books, and filings. The 5% figure governs from $160,000 in revenue upward — which is the point where 5% of revenue exceeds $8,000. The floor lives in board policy rather than the bylaws so it can be updated as real costs change, but every change must be disclosed to the members.
We could have written “5%” alone and quietly broken it in year one. We’d rather publish the arithmetic.
On every disbursement above $500.
By bylaw, the Treasurer may not be the President. The person who watches the money is not the person who spends it.
Every reimbursement requires a documented business purpose and receipts within 60 days, with excess advances returned. It applies to the President exactly as it applies to a first-week volunteer.
And an annual financial report to members even when the numbers are tiny. The habit matters more than the amounts.
Not after.
The annual report goes to every member automatically. Our IRS filings are public.
Under the board-adopted compensation policy, the President’s compensation is tied to defined revenue milestones. Below the first milestone, no cash compensation is paid — a stipend is authorized by the board and recorded as conditional, payable only if and when the organization reaches revenue targets set in advance. Reasonable and documented business expenses are reimbursed under the accountable plan from day one, at every stage.
Compensation is set only by disinterested directors, with the President recused, using comparability data from similarly-sized civic organizations, and recorded in contemporaneous minutes — the three steps that give rise to the IRS’s rebuttable presumption of reasonableness under the excess-benefit rules.
The full ladder is published in our governance documents. We would rather you read it than wonder about it.
A meet-and-greet costs almost nothing. A workshop costs the price of printing. The Empty Ballot List costs postage and somebody’s Saturday.
The reason we can cap administration at 5% isn’t discipline. It’s that the work itself is cheap and the results are large. Ten dollars puts a name on a ballot. Your thirty-dollar membership is not a drop in a bucket here — it’s a meaningful fraction of what it costs to give a county an election it wasn’t going to have.
State and federal filings; insurance (directors and officers, event liability, fidelity); banking, accounting, and legal fees. Payment-processing fees are classified as fundraising. Everything else is programs.
Two reserves, by bylaw: an operating reserve targeted at three months of administrative expense, and a lifetime-dues reserve into which half of every lifetime payment is deposited and from which one year’s dues is released each year for the life of the member.
| Tier | Dues | Chapter | League |
|---|---|---|---|
| Individual | $30 | $18 | $12 |
| Household | $45 | $27 | $18 |
| Student | $10 | $2 | $8 (the floor) |
| Lifetime tiers | — | 50% to the lifetime-dues reserve | Remainder allocated by the Board |
Filing Week micro-grants ($100–$250) are paid from the League’s share of dues; the number and total are published each June.
Directors-and-officers and general liability coverage are in place before the first public event; fidelity coverage extends to every person who handles League funds, including chapter treasurers; the Board may review or audit any chapter’s books at any time.
The Contested Ballot Report, with the year’s numbers by chapter, is published each June with the financial report.