fraternity debt

This question was submitted by one of our readers. If you have a question you want me to answer go here to submit it: Fraternity Advice.


My fraternity is really small, and is in debt pretty bad, so we really can’t do much without having to pay for it ourselves. How are we supposed to recruit?


This is a hard one to answer considering you didn’t give much information.  Feel free to leave more info in the comments below and I’ll address them.

Here are some thoughts I have about your situation:

You obviously need to get your debt under control.  I will assume you owe the money to yourselves and not others.  By owe to yourselves, I mean that brothers are behind in dues.

Here are my thoughts on How to Get Brothers to Pay Fraternity Dues.

If you owe money to others, you probably need to fundraise your butts off and get back to level.  Here are some quick thoughts on fraternity fundraisers.

Finally, those ideas really don’t address the problem.  You need to figure out why you are having money problems.  Are your dues too low?  Does your fraternity spend wastefully?  Is your house sucking you dry?  Obviously low numbers is hurting you…

Whatever your problem is, you need to figure it out and address it.

Finally, assuming you can get your money problems under control (no need to read further if you can’t) then you can focus on recruitment.

Besides the fraternity recruitment advice that I go into great detail on in this site, there is something that your chapter offers that is unique.

Your fraternity can offer perspective new members the ability to rebuild a chapter.  You need to find leaders who will relish the challenge of rebuilding your chapter into something great.  These guys will get to be saviors to be remembered for generations of future brothers.  This is appealing to a lot of guys.

So the next question is where do you find those guys?   Think of where the leaders are on your campus.  RAs are a great place to start.  Also student government is ideal.  And don’t forget the athletic teams.

Have frank conversations to these guys letting them know that you are essentially giving them your chapter to build into something great.  All you need is one guy to buy into the vision.  He will be able to help you sell the vision to others.

Best of luck.  Remember that the bigger the challenge, the bigger the reward.  Feel free to keep the conversation going below.

This question was submitted by one of our readers. If you have a question you want me to answer go here to submit it: Fraternity Advice.

3 thoughts on “How do Fix a Fraternity Deep in Debt

  1. Thanks Pat. I don’t know about most insightful. I’m just expounding on your comments most of the time. Most often you do a great job with your answers. I just try to come from another angle to support what you’re already doing. Keep up the great work.

    Now, to clarify… If any of you change my advice into buy alcohol and charge at the door of your house, I will personally hunt you down. Don’t even think about it. You know better. This is about parlaying your economies of scale, social promotions, and hard work into profits from marketing & entertainment, not alcohol. You know the rules. Don’t do something stupid to get yourself in more trouble trying to dig out of an already deep hole.

  2. I love Dennis’ comments – he is one of the most insightful fraternity men I know. he brings up a couple of good points here that I’d like to piggy back on.

    If your debt is to your nationals, have a candid conversation with your executive board’s treasurer. They want you to get current, and will do everything they can to help. They don’t want to see your chapter close. Often, debts are owed from years past by brothers who are no longer in the chapter. Often these debts are forgiven if you can maintain your commitment on a payment plan.

    Also, I love the idea of having a fundraiser party and splitting the take. This will be a great social event, and raise money for your chapter. Sounds like a no-brainer to me…

  3. I’d bet it’s national debt based on some combination of not keeping up with rosters, being irresponsible with pre-paid initiation fees, and/or a hefty risk rating/fine. If you’re in such a position, you should know pretty clearly what you did wrong. I’d stress that you need to take immediate steps – even before addressing the current debt – to correct the way you do business so it doesn’t happen again. If it is a debt to headquarters, then they’ll almost certainly put you on a promissory note of some kind. If they pull your charter then they don’t get paid at all, so it’s in their best interests to keep you afloat.

    There’s no easy answer. No one can tell you what magic words to say so money falls from the sky. You have to budget very tightly to make your payments. That won’t leave you much room for actual operations, and obviously your concerned how you’ll recruit because of that.

    My advice is prioritize.

    There are tried & true ways to do fundraising or philanthropy based social events. One I’ve had most success with is work out a deal with a bar to split the door on a band, you promote/sell tix, you and your dates get in free with a reserved area. We used to do that three times a semester and pocket 2-3k every time.

    As painful as it is, you can charge party fees for socials. $30 covers a shirt and your fee. That gets you enough to work with.

    As uneasy as some build parties make me, they’re all about a ton of elbow grease and a small amount of money make for a spectacular event. I’ve turned a deck into a viking ship, a humongous alligator where you walk through the head down a tunnel (stairs) to a dance floor where the stomach would be; I’ve covered all the walls in a house with bamboo and dumped a couple tons of sand inside over black plastic. I’ve seen some pretty elaborate stuff done before. The key is lots of time and hard work can make up for a small budget.

    You can do chapter w/ dates camping trip, road trip to another chapter for the wknd, and all the stuff you’d do if you were on social pro – ie meet up and carpool to the bars with dates. We had to cut formal & semi-formal when paying off stuff like this. We’d do cocktail party nights where everyone dressed up and brought their own classy drinks. Not the same, but kinda made up for it.

    You’ll still want to spend on a couple big events a semester, but by using some of these techniques you can drastically reduce what you’re spending on social. That’ll free up budget to spend on rush. Obviously, think about how you’re doing rush too.

    Most campuses everyone waits till students show up & they spend a ton of money trying to out-compete everyone. That’s most likely not legal anyway, but for the sake of this conversation it costs a lot of money. If you told most freshmen you’re spending 1500+ for every pledge you end up with, you could probably just write them a check and end up with more guys.

    Try working smarter, not harder. I don’t love colony recruiting, but I do love efficiency. Do more year round recruiting so you have people locked up before formal rush. They’ll ultimately join because they’ve made friends with you over months rather than because you could out-party everyone else in a couple week period. Do stuff over summer back in your hometowns to lock up incoming freshmen. I don’t mean go to high school parties, but network and recruit people before they’re exposed to your competition. If you can walk into formal rush with a large percentage of your pledge class already committed, then you can either cut back your spending or keep it the same and massively increase your numbers. You do still have to hold those guys through rush, but that’s a lot easier than winning them over from scratch.

    Obviously fundraise and get your finances in order as well. I’d strongly recommend reaching out to an alumnus or parent accountant that can do a legit audit of your probably very sketchy books and then teach you how to run an actual business. You really need that help right now, not just to get through this, but to make sure it doesn’t happen again.

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