National/International Fraternities in Debt?
 

I recently heard that a growing number of fraternity headquarters are losing money or barely breaking even over the past few years. If this is the case, I was wondering if it was due to weak chapters that cannot pay fees? I was also wondering if some fraternity headquarters overextend themselves by putting too many chapters at weak greek systems? I know that our international headquarters is not experiencing this problem, but our expansion is mostly re-colinization with maybe a few new colonies a year. I may be completely wrong about all of this, but I am just curious.

I would say that Delt is about the same. Much of our expansion is recolonization -- with brand new chapters generally being at smaller private schools with very high academic standards.

For fraternities, maybe all of those huge lawsuits that keep cropping up could be part of the problem, although I haven't heard too much about groups being in debt.

The fraternities' sizes are much more varied than the sororities' sizes. There are fraternities that have 250 chapters and fraternities that have 10. I've heard of some of the smaller groups trying to come together (such as sharing office space, etc - NOT a merger) to save money, although I don't know how successful these efforts have been.

Shadokat and 33,

I think you're both right. Insurance costs are eating everyone alive, and the smaller groups are probably more vulnerable. I also have heard about some organizations sharing office space, etc. although I can't give an example.

National Organizartions are not rich! Period!

Insurance costs are still going up. The cost of running Offices and staff, printing magazines, mailers of all kinds, postage, running web sites esculate.

In a conversation with our Ex. Sec. basically head of the LXA Fraternity said that MANY Greek Orgs or in a Money pinch.

It may even come down to Fraternity/Soroitys Merging.

On one thread, they were talking about BIG Houses on campus. Big houses dont make rich Chapters. These houses cost $$$$$$. The first time they do not keep a full house and chapter, oops, they are in a world of hurt.:(

True. In fact, an increasing number of fraternity professionals and high level volunteers believe that owning a house is a huge deteriment for a chapter and limits its flexibility in terms of coping with varriances in membership and budgets.

While it is hard for those of us who grew up in chapters with nice houses, a lot of GCers will tell you that their chapter runs just fine without a house, thank you!

I can imagine that having a fraternity chapter close where the fraternity owns the house can also be a liability. All of a sudden an organization would have to swallow the cost of dealing with the house.

There was a fraternity on my campus that closed three years ago. The national organization still owns the large tudor style house that the brothers used to live in. It is in desperate need of renovation and all of the national organization's attempts to rent the house out until the fraternity can return to campus have been unsucessful. Now the national org has to put down the money for renovation while it is not gaining income from rentals or brothers paying dues. It seems like a losing situation for the national org.

Insurance costs have been going through the roof lately. This has put a HUGE financial burden on many fraternities. While we the membership pick up a huge tab on insurance, HQ's are still picking up a very large portion of it.

Often times though, at campuses where houses are "THE" thing, if a chapter closes, someone is ready, willing and able to buy your house or even rent it from you if need be. Sometimes this can be a good source of "non-dues" revenue for organizations, and it affords you the opportunity to recolonize on the campus and be in the position of already having a house.

Shadokat,

What you say is often true, but not always. I also suspect that there is a difference between fraternity and sorority properties. Frankly, sororities take much better care of their houses. And they aren't subjected to the parties that fraternity houses are.

As you can see in the case lionlove sites above, owning a house that your chapter isn't living in can be a real liability.

We finally sold our spectacular chapter house at the University of Colorado at Boulder to the university after it had been trashed when the chapter lost it's charter for the third time.

This is part of the plan for LXA's return to Colorado State somewhere in the next two years or so...

Yes, All That's True. However...
 

It's true that a chapter can be competitive without a house on a big-house campus, but it takes a great deal of leadership and focus. Freshmen tend to identify the "non-standard" fraternity right away. If it's a competitive chapter, then they're interested.

Regarding the national offices, frankly, the financial status of the national office should not affect the strength of any individual chapter. A very strong fraternity chapter should be so because they have a solid history, involved and generous alumni, and a very clear vision of who they are and what they should be doing. In effect, they should be largely independent of the national offcie except for administrative matters. Even the weakest national has some good chapters; even the wealthiest national has some dogs on their books. The quality of chapters shouldn't be determined by whether or not the national office has enough operating funds. And, there is no reason for any national office to be in pooor financial condition. You can't depend on undergraduate dues alone. Effective fundraising is the key, and while it's not easy, it's not rocket science either.

Re: Yes, All That's True. However...
 

Weeeelllll....I think the key word in that is "fraternity." Sororities from what I've seen seem to be much more tied to their national HQs as far as pledging procedures, rush techniques etc. I remember almost all of our sororities mentioning having a traveling consultant on campus at some time or another. I don't EVER remember any of the fraternities talking about having one. (keep in mind this is a while ago, so things may have changed) If the national wants to mandate that level of involvement with individual chapters, they need to have the volunteers and training as well as money to back it up. If they don't, the debt will get passed on to collegiate members in the form of higher dues...and some people will leave because the financial obligation is too much...and numbers will go down, interfering with rush performance, which makes numbers go down further, yadda yadda yadda.

Firehouse,

Some excellent points. Good post.