By the Numbers: A Message from Theta’s CFO

I think many of us have a favorite or lucky number. Mine is the number 27. 27 is a significant number in many personal important dates for me—including my wedding anniversary, my birthday, and the birthdays and anniversaries of many family members. As the readers of this article are well aware, Kappa Alpha Theta Fraternity, the organization for which I am so proud to work, was founded on January 27.

I enjoy numbers, not just for what they can signify—such as connections—but also for the information they provide about an organization such as Kappa Alpha Theta’s.

As Theta’s chief financial officer (CFO), I get to see the financial numbers and what is available, what the options are for utilizing the Theta’s resources most sensibly for Theta and our members, and what Theta staff can present to Grand Council and the Fraternity Housing Corporation (FHC) Board for budgets.

As Theta staff began preparing budgets in April 2020, things looked much different than in prior years. We wondered about things we hadn’t had to wonder about before: Would the college experience be so different from prior years that recruiting new members would be more challenging? Would we have significant numbers of inactive members? Would members defer or skip a year of school and return when campuses fully reopened?

From a budget perspective, we planned for the worst and hoped for the best. The first significant decision made was to temporarily lower the college per capita fee and initiation fee for the 2020-2021 academic year by 25%. We knew the membership experience would be different and we knew the need was there. We also went into the academic year having no estimate or projection of what member counts would be. We started the budget process with program reductions and still had to eliminate several staff positions. Having worked at Theta for more than two decades, it was beyond difficult to see co-workers and dear friends leave the organization and see many programs halted. Theta was not eligible for the Small Business Administration’s Payroll Protection Program (PPP) and received only a small loan from the SBA’s Economic Injury Disaster Loans (EIDL). The loan represented only 5% of the loss in revenue the Fraternity and the FHC experienced at the end of the last fiscal year. While we were able to achieve a balanced budget for 2021-2022 within the Fraternity, it was not without many disappointed faces around the “virtual office.”

As 2020 turned into 2021, we saw the financial impact of the year on Theta, its members, its chapters, and the FHC and facility corporation boards. Not one part of this organization was immune to the financial impact of COVID-19 and the Abolish Greek Life (AGL) movement. I cannot tell you how many times I have said that or written that or typed that sentence. In the many years I have worked at Theta, never has there been a year that has impacted Theta’s finances to this level. We have seen college chapters lowering their dues costs as a result of fewer activities available for members to attend and in an effort to retain membership. We have seen facility corporation boards lower rent to chapters as a result of fewer members living in the facilities or for shorter periods of time in the academic year. The FHC projected 25% less revenue and will be down more than 40% for the year. Fortunately, we saw only a slight decrease in returning active members and we actually saw a slight increase in the overall number of initiated members compared to the prior year. To us, the new member numbers were a solid indication of the resiliency of our college members during these challenging years.

Something I am asked is from where the revenue comes and to where those revenue dollars go. The primary source of Theta’s revenue comes from our college chapter membership through per capita, initiation, and risk management fees. That represents approximately 81% of the Fraternity’s revenue. Then, how is the money spent? It seems easy to say, “Well this percentage went to programs, this percentage goes towards the magazine, and this percentage goes towards education and leadership,” on and on. Just like any other business, the daily functions and responsibilities require a paid staff to keep Theta operating. Of course, this organization is incredibly fortunate to have so many dedicated volunteers. Our volunteers help immensely to stretch the ability to operate on fewer dollars, but the need for paid staff is critical to maintaining operations and programs. Paid staff positions are the primary area on which revenue is spent. Fraternity staff oversees the program areas that include alumnae, education, finance, collegiate services, housing, administration, and technology. Each of these program areas provides the tangible benefits, memories, and educational and personal development opportunities that our members know and come to expect.

As we plan for the upcoming fiscal year, we are still proceeding carefully in bringing back programs to present to Grand Council and the FHC board. Theta is very fortunate to have current and former board members, volunteers, and staff who have been incredibly good stewards of Theta’s resources, and we plan to continue that approach as we plan for the future. Our budget planning for this upcoming year is based on a return to primarily on-campus activities for our undergraduate membership, with commitment towards ensuring the programs continue to bring the most benefits to our collegians and alumnae.

Theta has been here for over 150 years and our funding approach today will put this beloved organization in a position to continue on for another 150.