New Club Procedures Added

As our organization begins our Soroptimist new year, your federation board reflected on our leadership in meeting the needs of the women and girls and their families and at the same time reflected on our obligation to protect our organization from the legal and financial risks that come to our attention. As a result, your federation board has created new procedures to better manage our risks.  

When the temporary pause was put into effect in January 2021, a number of clubs in the U.S. contacted SIA headquarters about the continued operations of businesses they maintained to provide funding for the club’s work. This also brought forward questions regarding the liability insurance coverage for these businesses, as well as their legal and tax status.  Initial questions and answers pointed to an emerging layer of risk that SIA needed to understand, manage and mitigate.  

SIA conducted a census survey of U.S. clubs in February 2021 to determine the number of clubs that were operating affiliated businesses.  Our census and follow-up communications now show 24 clubs operating 20 affiliated businesses.  Progress has been slow but steady to restructure the relationship between the club and their affiliated business so as to protect club members and Soroptimist International of the Americas, Inc from risk associated with the club’s affiliated business activity.  

SIA’s position is not to deny clubs the ability to operate these businesses. It is to ensure that the affiliated business is properly set up and insured to withstand the exposure to risk that is inherent in its ownership and operations, and to “wall off” or separate that risk from reaching the Soroptimist club, its members and Soroptimist International of the Americas, Inc.

At the June 2021 board of directors’ meeting, the board passed a new procedure that requires all clubs with an affiliated business to

1) Ensure the club’s affiliated business is carrying out the SIA mission.

2) Structure the business so that the club, its members and Soroptimist International of the Americas, Inc. do not assume any risk for the club’s affiliated business endeavors.

3) Provide annual reporting on their affiliated business to SIAHQ.

The newly approved procedure is as follows: SIA Procedure B. Procedures Governing Clubs #11: 

“Affiliated Businesses An Affiliated Business is defined as a club activity to carry out  SIA’s mission that involves owning and/or operating an ongoing activity. This does not include discrete fundraising events conducted periodically such as annually that are of short-lived or time-bound duration.

Any club that has or seeks to create an affiliated business to support the club in carrying out SIA’s mission must ensure the business is structured so that the club, its members and Soroptimist International of the Americas, Inc. do not assume any risk for the club’s affiliated business endeavors.  Affiliated businesses may include thrift stores, medical equipment loan centers, apartments, homes, shelters and similar ongoing activities.  This is not an exhaustive list, and an affiliated business is determined on a case-by-case basis in consultation with SIA’s General Counsel and insurance advisors.

Clubs chartered by SIA who have an affiliated business must adhere to the following guidelines:

• The affiliated business is created as a separate entity from the club. 
• The affiliated business has a separate federal/national, state/provincial, or local tax status and its own tax identity number separate from the club.
• The affiliated business holds the proper permits to operate in its locality in its name.
• The affiliated business must have its own general liability insurance, and must name Soroptimist International of the Americas, Inc., as an additional insured with coverage of $1 million per occurrence and $2 million aggregate per policy period. 
  •  Language for general liability additional insured must read: Soroptimist International of the   Americas, Inc., its directors, officers and employees and the region board, governors, officers, and employees are named as Additional Insureds under Commercial Liability endorsement #CG 20 10 (04/13) (copy attached) and Commercial Automobile Liability (if applicable) policies. Additional insured coverage is on a Primary and Non-contributory basis with a Waiver of Subrogation in favor of the Additional Insureds under Commercial General Liability and Commercial Automobile (if applicable) policies.  
    
• Clubs must file annually with SIA headquarters the additional insured general liability Certificate of Insurance within 30 days of the policy’s renewal date. If the club or the affiliated business is a property owner, they must also file annually evidence of insurance for property coverage with SIAHQ within 30 days of the policy’s renewal date. Failure to do so within 30 days of the policy renewal date will place the club “not in good standing” status until the insurance documents are filed. (See SIA Procedure B. 5.) The club must also file the annual Use of “Marks” permission.
• Clubs seeking to set up a new affiliated business should be in contact with the risk department at SIA headquarters before establishing the affiliated business.

PROVISO: Clubs identified as having an affiliated business as identified in June 2021 agenda item XXI.A. have 90 days from the date of notification by the President in early July 2021 to file the appropriately updated insurance forms and complete the set-up of their affiliated business as a separate entity (or execute the interim affiliate business agreement if their separate entity filing cannot be completed in the 90 days).  Clubs that have not made the appropriate filings at the end of the 90 days will be placed in “not in good standing” status.

In addition, the Board updated SIA Procedure B.5. to include annual filings related to affiliated businesses as required for clubs to remain in good standing status. The updated Procedure B.5. reads:

In order to be in good standing, a club must remain current in all financial obligations to the region and Federation, have submitted all required final reports from Federation club grants, and submitted any annual filings regarding affiliated businesses. Clubs not in good standing are not eligible to vote in Federation elections or mail ballots, and cannot receive grants or awards from the Federation.

Both of these procedures will be available on our website in all languages by July 22, 2021.

Again, the board approved procedures regarding affiliated businesses are critical to ensure affiliated businesses are structured so that the club, its members and Soroptimist International of the Americas, Inc., do not assume any risk for the club’s affiliated business endeavors. We know the steps in this procedure may be new to clubs and we are very willing to help clubs in any way we can.  

Please do not hesitate to contact our Associate Senior Director Records & Risk Management Lisa Mangiafico at lisa@soroptimist.org if you have any questions.