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Social Committee - Gift Cards

Started by MegC1 • 11 replies • 375 views

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MegC1 (South Carolina)
Posts: 11
Posted:
Hoping to hear from what others do in their communities around social committee and gift card use.

1. Social committee runs competitions in the community with $25-$50 gift card prizes (holiday lights, yard of the month type events). Should Board members and social committee chairs be able to participate? Note: the social committee chairs send out the voting link and collect/compile/announce the results. Voting is done via SurveyMonkey and no one outside the chairs sees the results of the voting.

2. Should the HOA allow for using current year budget (e.g. 2024) to purchase gift cards or items for the following fiscal year (e.g. 2025)? This comes from social wanting to use their unused budget by buying gift cards to use/spend during the next fiscal year. Unused budget in 2023 was over $1,000.

My opinion is that the below rule doesn't allow for paying for next year using current year funds:
"If the Annual Assessment collected in any given year is in excess of the actual costs and expenses incurred by the Association for that year (such excess being a "Common Surplus"), the Board may, at its sole discretion (a) return each Owner's share of the Common Surplus; (b) credit each Owner's share of the Common Surplus to each Owner's payment as for the Annual Assessment for the following year; or (c) apply the Common Surplus to the Association's Reserve Fund."
MelissaP1 (Alabama)
Posts: 13,836
Posted:
I do not believe the HOA should spend money on gift cards. The board are volunteers. Plus not everyone is going to agree a person deserves a card.

Remember the HOA money is NOT your money. It is every members money. It is for operating costs and capital improvements.

This is my opinion as gift cards do not fall under maintenance expenses. It is okay to use your own personal money to buy them if you want. Just not HOA dues.
Former HOA President
TimB4 (Tennessee)
Posts: 21,061
Posted:
Meg,

The best thing would be to apply any operating surplus to the reserves contingency line item.

As for subjective monetary prizes, subjective because there is no set standard - just opinions, I am very much against them.
Instead, I would propose that the Association makes a sign that is allowed to be displayed in the winners yard.

Regarding judges/committee members participating - I'm against it because of the perceived optics from the member. i.e. it just doesn't look right if they win.
If voting is done by the membership (which is what I am getting from your posting) I'm not as opposed providing it's one vote per lot.
However, unless voting process can be seen by everyone, the individual who has access to the voting tally should not participate (again, optics).

Side note/observation: if gift cards are in the budget, then they are not excess funds.
DeanJ
Posts: 1,786
Posted:
Quote:
Posted By MegC1 on 02/23/2024 6:24 AM
Hoping to hear from what others do in their communities around social committee and gift card use.

1. Social committee runs competitions in the community with $25-$50 gift card prizes (holiday lights, yard of the month type events). Should Board members and social committee chairs be able to participate? Note: the social committee chairs send out the voting link and collect/compile/announce the results. Voting is done via SurveyMonkey and no one outside the chairs sees the results of the voting.

2. Should the HOA allow for using current year budget (e.g. 2024) to purchase gift cards or items for the following fiscal year (e.g. 2025)? This comes from social wanting to use their unused budget by buying gift cards to use/spend during the next fiscal year. Unused budget in 2023 was over $1,000.

My opinion is that the below rule doesn't allow for paying for next year using current year funds:
"If the Annual Assessment collected in any given year is in excess of the actual costs and expenses incurred by the Association for that year (such excess being a "Common Surplus"), the Board may, at its sole discretion (a) return each Owner's share of the Common Surplus; (b) credit each Owner's share of the Common Surplus to each Owner's payment as for the Annual Assessment for the following year; or (c) apply the Common Surplus to the Association's Reserve Fund."

My opinion is your board is violating the declaration because they don’t have a budget line for social and they are directing surplus to social instead of following the declaration.

I don’t see an issue with the board waiting until they realize a surplus before spending the funds in the social budget line and buying cards. When the cards are used really isn’t material any more than buying disposable plates in bulk to be used over multi years would be.

No, social committee can’t vote to give their members prizes.

MarkM19 (Texas)
Posts: 1,459
Posted:
Meg,
I am not a fan of the gift cards being given out for contest winner. We also have a social committee chair who is not an owner but works for the PMC. Our board trusts her completely, but my problem comes from years past when the last committee chair who was an owner abused this privilege. It is very hard to track gift cards. We also have decorating contest with owner/judges, and no one has ever questioned the results or the awards. We have several owners who spend over 1,000.00 a year to win the $50 gift card. I doubt they are doing it for the money. I am not in favor of this, but it is not a hill I want to die on. It really is an insignificant expense in my opinion.

I would say that board members and committee members should never be allowed to enter or win these contests.
MegC1 (South Carolina)
Posts: 11
Posted:
I should add that the social committee does have a budget line item every year to host community events (summer kick off, fall festivals, etc.). The co-chairs of the committee (who are owners) pretty much have had full authority to spend their budget on whatever they want (including gift cards).
CathyA3 (Ohio)
Posts: 6,299
Posted:
Per our attorney, condos in my state may not spend assessment dollars on social events unless our CC&Rs/Declaration states that this is a legitimate use of this money. If our board wants to host such events, they need to be participant-funded.

Also, our bylaws state that directors, officers, and committee members may not receive any compensation for their work. So even gift cards would be out. Heartfelt thanks in the newsletter is about all these folks can expect.
JohnC46 (South Carolina)
Posts: 14,265
Posted:
Quote:
Posted By MegC1 on 02/23/2024 7:33 AM
I should add that the social committee does have a budget line item every year to host community events (summer kick off, fall festivals, etc.). The co-chairs of the committee (who are owners) pretty much have had full authority to spend their budget on whatever they want (including gift cards).

There in lies the problem. Social events should be self funded.
SheliaH (Indiana)
Posts: 6,964
Posted:
Some communities give the social committee a small budget, as the purpose of the committee is to promote goodwill among the homeowners, so they sponsor things like holiday decoration contests, and the gift cards are purchased for that reason. I prefer gift cards to come from other sources - maybe someone can donate them.

We don't have a committee, but a few years ago, the board members passed the hat to purchase two gift cards to be used as door prizes for people who showed up to the annual meeting or turned in a proxy - we'd hoped to promote more attendance or at least more proxies to be submitted so we could have an annual meeting. It did work, although the turnout wasn't what we'd hoped for, so we stopped. Board members weren't eligible for the giveaway.

All of that said, I think other funding sources should be considered. You don't say how large your community is, but on its face, a $1000 budget seems a bit much, so maybe you need to rethink some projects. As for next year's budget, if the social committee already has a line item in the budget for this year, I think it's ok for unused money to be carried over into next year.

Finally, I think the rule you quoted may be referring to the total net income/loss amount from the operating budget, not a specific line item.
It appears to mean that if there's a surplus, the Board can decide to credit everyone's account for next year or send it to the reserves fund. In my community, we'd transfer it to reserves.
If it is not right do not do it; if it is not true do not say it. Marcus Aurelius
KerryL1 (California)
Posts: 14,550
Posted:
Our Social Committee has a budget too, Meg. If any $ remains at year's end in the entire budget it goes to reserves.

Your contest seems like a great way to focus residents' attention on the care & maintenance of their front yards even if they don't decorate. This benefits the entire HOA.

I don't think Dean knows what's in your declaration when, in any case, they don't contain budget line items. But what if yours and others state that one purpose of the HOA is to promote the general welfare of owners?

My HOA's declaration says nothing about promoting the "well-being" or similar of residents. Yet my HOA spends lots on automatic door openers to our elevator vestibules on each residential floor, and to some doors to our city-block exteriors. We have two AEDS. We have evacuation chairs on two floors of our 25 story twin towers to assist disabled residents if the elevators stop working. None of these are mandated by the City. Board make decisions on what they truly believe benefits their corporations. There's no requirement that every decision must only involve maintenance & providing utilities, investments & insurance.

Perhaps you appreciate your Social Committee the way I do:

Social events, contests, etc., enliven and activate what can be pretty bland social spaces.

Its events bring residents together fostering nice senses of belonging to and connectivity with the community

When folks feel like they're a part of "their" social group, of their community, they're more likely to follow the rules, respect the common areas, maintain their homes, and volunteer for committee and board service.

Maybe it's our urban location, but the several high rises around mine all have Social Committees funded by Owners' dues.

JohnC46 (South Carolina)
Posts: 14,265
Posted:
I am all for events that bring members together for social events. That said, the events should be self funding and not part of the associations budget. Yet in the beginning, some "seed money" from the association is fine but end this association ASAP
MegC1 (South Carolina)
Posts: 11
Posted:
I didn't think to look at it from a compensation perspective. Per our bylaws, officers are not allowed to receive compensation, but one could argue prize money is only compensation if it is awarded on their performance or services not how nice their house is decorated.

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