Wednesday, July 01, 2015

FROM THE TRENCHES - THE IMPACT OF FASB 116 & 117 ON NONPROFIT ORGANIZATIONS

Disclaimer: this is a "from the trenches" opinion piece written by a nonprofit finance director who lived through the transition from pre to post FASB Statements 116 & 117. Please click the "summary" and "status" links to read the full text of the statements and consult your independent auditor for final interpretation.

Both Statements were effective December 15, 1994 for nonprofits with over $1 million in annual expenses and over $5 million in total assets.

Statement No. 116
Accounting for Contributions Received and Contributions Made (Issue Date 6/93) [Summary] [Status]

This Statement radically changed (and standardized) the way nonprofits reflect income. Generally, Statement 116 requires that contributions are recognized in the period received. Why was the change radical? Pre-116, nonprofits received multi-year funding and reflected only the portion for the current fiscal year. The remainder was held in a balance sheet account known as "deferred revenue". This prevented the appearance of a large bubble of "profit" in the first year. Statement 116 had one unfortunate effect, it made financial statements very hard for boards and the public to understand, creating artificial profits and losses which, without notation, could be misleading.   Did the advantage (standardization) outweighs the disadvantages (hard to interpret financials)?   We don't have to choose, Statement 116 is required to be in conformance with GAAP.

Statement No. 117Financial Statements of Not-for-Profit Organizations (Issue Date 6/93)
[Summary] [Status]

Not as controversial as 116, Statement 117 requires nonprofits to provide a statement of financial position, a statement of activities, and a statement of cash flows. The statement also requires that the amounts for each of three classes of net assets:  permanently restricted, temporarily restricted, and unrestricted be displayed in a statement of financial position and that the amounts of change in each of those classes of net assets be displayed in a statement of activities.

When Statement 117 published all nonprofit accounting software had to be re-written to allow for a three column presentation. It also forced out some critical information. An organization that had previously showed high net assets, now might now call attention to a true loss in current unrestricted activity offset by permanently restricted funds. This statement made financials significantly more transparent and easy to understand by boards and the public.


Technorati Tags: , , , ,

NONPROFIT TOUGH LOVE

the great lie is that it is "Civilization", it's not civilized. It's been the most blood thirsty...brutalizing system ever imposed upon this planet...that is not civilization, that's the great lie...or if it does represent civilization, and if that's truly what civilization is, then the great lie is that civilization is good for us" John Trudell, on Western Civilization (in "Trudell" documentary by Heather Rae, 2006)

John Trudell was making an important point about the effectiveness of a bias when it is built right into the language. Bias embedded in language is that much harder to overcome because you need language to be able to describe the problem.

My favorite illustration? A riddle: A father and daughter are in a car accident. The father is killed and the daughter taken to the hospital. The surgeon looks at the girl and says "I can not operate on her, she is my daughter"! How can this be? (answer at bottom of post)

Why was I thinking about the intersection of linguistics and belief today? And how, oh how, am I going to segue to nonprofit financial management? Simple. I came across an online quiz: the CFO Fitness Quiz: Are You Tough Enough for the Caring Sector? on the Bridgestar website (you have to sign up, but it's free and really worth it).

Until that moment I had not thought about the juxtaposition and contradictions inherent in personality type and industry. The questions hidden in the question are these: is the nonprofit sector an easy to manage industry? does working for a caring profession imply you are a kind person? are kind people necessarily competent?

Our industry has long had to be defensive on that last point. The underbelly of the nonprofit world. If we're here because we are caring, are we also here because no one else wanted us? Have we perpetuated the problem by hiring for heart and not skill?

This issue is, of course, tied to our fears about the coming "leadership crisis" (and I don't really believe there will be one). The truth is, our industry has done a lot of growing up. Our pay scales don't always look low to me anymore; our talent is (sometimes) formidable; we mission and vision with the best of 'em; we invest in training and marketing; and we account for our dollars as good (or even far better) than our for profit equivalents.

Answer: The solution, of course, is that the surgeon is a woman.


Technorati Tags: , , , , , , ,

Wednesday, June 27, 2012

Dream Jobs in the Nonprofit, Government and Private Sectors

What do you want to be when you grow up?  Every college graduate has got the message "there are no jobs out there, you are going to be living in your parents basement until you're 30".  But what IF you could get a job, what would it be?  Not to be too "new-age" but maybe the possibilities are only limited by our imagination.  Here are a few real job possibilities:

  1. Chief People Officer - this is what they're calling a Human Resources Manager today. I remember when I thought calling People "Human" resources (as opposed to natural resources like petroleum I suppose) was egregious. What exactly was wrong with "Personnel Manager" again? 
  2. This is almost as good as (yes it is real!): Dream Coordinator - I've always wanted to coordinate dreams but I keep getting sleepy..
    Dream Coordinator:  the Dream Foundation is searching for a highly motivated and committed individual to coordinate dream granting in their Los Angeles office.
Think these are too improbable, perhaps you may want to explore a traditional government job. 


The National Journal published the following list: The Four Most Overpaid White House Staffers. They are:


Deborah Nirmala Misir Ethics Advisor $114,688
Erica M. Dornburg Ethics Advisor $100,547
Stuart Baker Director for Lessons Learned $106,641
Melissa M. Carson Director of Fact Checking $46,500


Yes, there is a White House Director for Lessons Learned. I can't make this stuff up, I'm not that creative!


Okay, so maybe non-profit or government aren't your style, try the public sector:

Do you have "Poker" and "Table Tennis" on your Resume? This is a real job posting for an Engineer position!

REQUIRED SKILLS:
  • Ruby on Rails Experience
  • SEO (Search Engine Optimization) knowledge
  • CSS based HTML presentation
NICE TO HAVE SKILLS:
  • Table Tennis
  • Poker 
Must stick with my policy, always leave 'em laughing, here's the winner:

The company "Underwear Affair" is searching for a Participant Coach - found this one on Craigslist. I almost want to do the job just to put it on my resume.

Saturday, September 04, 2010

Love Evictions, Couch Surfing and SuperNofa's

“SHP-CPD-LOCCS-HMIS-APR-SRO-HUD-LAHSA” the man in the front of the room intoned.   "_#*@!#$ _” I muttered. This is going to be a very long day.

We are sitting in a room on the second floor of a building at 453 S. Spring Street. Here in yet another government building for yet another government workshop. This time it is the Los Angeles Housing Services Agency or LAHSA. Yes, THE LAHSA of LA Times headlines notoriety. Smack in the middle of City politics, this organization performed so poorly that the Feds have been summoned. And if there’s anyone who can improve a process, it’s the Federal government.

LAHSA was formed like our land masses, by something akin to continental drift. The plates of local government, the city plate and the county plate, clashing together, sliding across the lava of city politics. Once set in motion so definitively that even the terrifying Laura Chick, former City Controller could not put them together again.

More and more the workshops are led by outside consultants; identifiably by the fact that they still have a small spark of life. (side note for later exploration: What sucks the life out of the employees of these government agencies? Do they select for this dullness in the screening process? Or do they become this way over time? )

The goal of the workshop as defined by our consultants? To take less Pepto-Bismol. Our trainer herself was once a government employee, in charge of information technology. Her job? to manage the removal of typewriters!

The Feds sent their representative too. We were introduced to Rufus, the head of the homeless team. So if you want to solve the problems of homelessness and you go to the Feds for help, Rufus is your man.

The first pearl of wisdom delivered to us? “HUD Homeless Eligible” is NOT synonymous with “Homeless”. When asked “Why?” the consultant (obviously practiced at fielding this nonsense) replied “that’s above my pay grade”.

Workshops like this make me embarrassed to be a financial manager because they remind me exactly what my job requires me to manage. Maybe “typewriter removal” isn’t such a preposterous job goal after all.

Our hosts introduced us to the definitions of permanent, transitional and permanent with supportive services housing. There was a fourth type, it interested me the most. The category was called “Innovative Supportive Housing”. When our speaker reached this category, she said the following “I’m going to skip over this part.” She continued “because innovation is VERY rare”. Sigh.

Our training material was divided into cutesy mnemonic bytes. The six hours of our workshop could all be elucidated by memorizing the “3-6-8-8 “. The three program objectives, the six types of projects, the eight categories of homelessness and the eight legitimate ways to spend HUD money. Hmmm, I guess it works.

Mnomics aside, a lot of thought has gone into the activity of ending homelessness. How do people become homeless? Some are obvious such as succumbing to the mental illness, fleeing domestic violence, being evicted… What about being evicted by a family member? (that does it Johnny, you can’t live in the basement anymore!). These have become known in the industry as “love evictions”.

Where exactly are you when you are homeless? Living in a sub-standard place such a tent or a friends garage? Living in a motel room for 7 days and then sleeping in an alley? There are so many places to be and still fall within the definition of homeless. What about the category of “staying with friends”? This one has a name too: “couch surfing”.

How would you sum up today’s workshop? Perhaps the act of reverse engineering compassion.

Once upon a time, a hundred groups of folks around the country came with 100 innovative ways of bringing services to the homeless. By the hand of god (or an act of congress) whichever is greater, billions of tax payer dollars were allocated to implement these programs. Then the fun began. This time it wasn’t the innovators making up the system…it was the government. The government then regurgitated those techniques and the result was…CFR 24, Part 3, Section 5. Or something similar. The funding was announced, the groups applied for the dough, and the two parties signed a contract. Suddenly the fox was guarding the hen house. 

And now I’m taking classes from the fox.

Friday, February 15, 2008

NONPROFIT ROLE PLAYING?

Civil Society, Government, Church - What role do we play?

Ever wonder what the role of nonprofits should be in the mix of government agencies, the business community, churches and other "faith-based" orgs? I have, since April, 2005, ever since I heard Bruce Sievers speak on the topic. It is great grist for the mill.

And so the quest for knowledge continues. Recently, a friend sent me a job opening for an innocuous position for the County of Orange called "Performance Auditor". The job paid well (approx. $90 to $150K) and the job description read like so many others:

This position will report to the Performance Audit Director and be assigned activities such as: management audits, process improvement studies, reorganization studies, cost effectiveness assessments, cost-benefit analysis, best practice analysis, program performance evaluations...

etc. etc. All read normally until...I got to the the requirements section. It read:

The candidate must also understand the role of government in society and how it interrelates with the business community.

Can I have a reality check here folks? Send me your comments. It's essay question time. How many of us can answer that question. What exactly is the role of government in society? But more importantly how is it supposed to interrelate with the business community?

If you get that one correct, try this: compare and contrast the answers posed by a democratic or republican candidate. What would Ronnie say? Should we go with "invisible hand" or do we go Libertarian? Just stay out?

In my day (and that includes the present), job requirements meant "knowledge of a certain software package" or "excellent communication skills".

What about after your first year on the job, at evaluation time? Here's how it might read:

Y.T. has a strong understanding of the role of government in society but needs improvement in the interrelation of government with the business community. We recommend several books on Political Science and perhaps a copy of "Good to Great" on her night stand.

What I'd do to be a fly on the wall for that HR meeting.

File this under: huh?


Technorati Tags: , , , ,

Saturday, January 12, 2008

JOB HUNTING II

Job Hunting II

A good list of job search sites needs regular maintenance, here are three additions since our earlier post. From here on we'll post the whole updated list (with new items first) bi-monthly.

Bridgestar's mission is to support and strengthen nonprofit organizations by enhancing the flow and Effectiveness of passionate and highly skilled leaders into and within the nonprofit sector.

Commongood Careers - a nonprofit search firm that connects highly skilled, passionate individuals to organizations that are dedicated to creating positive social change. Founded by nonprofit professionals. Offers personalized, engaged support to job seekers and organizations throughout the hiring process, as well as access to a wealth of knowledge about nonprofit careers.

California Only:

Nonprofit Directions is a job listing service for the nonprofit sector, available both in print and on the web.

Nonprofit Directions is a service of the Center for Nonprofit Management, the founding partner of the Nonprofit Jobs Cooperative, a collaboration of nonprofit Management Service Organizations across the country who have combined efforts to form a new national jobs listing website.



Technorati Tags: , , ,

Friday, January 11, 2008

THE SAD & THE FUNNY: NONPROFIT JOBS CORNER

NONPROFIT JOBS CORNER

THE SAD:

A recent job search turned up this position advertisement:

Litigation Attorney
Disability Rights Legal Center
http://www.idealist.org/match/851494920-305
Los Angeles, CA
Salary: $48,510 per year depending on experience plus excellent benefits

Imagine graduating from Law School to find this salary! How will the Disability Rights Center recruit good talent with this offer???

THE FUNNY

Add it to my "new favorite job title":

1) I just had to read the job announcement for this one: Chief People Officer
Seems this is what they're calling a Human Resources Manager today. I remember when I thought calling People "Human" resources (as opposed to natural resources like petroleum I suppose) was egregious. What exactly was wrong with "Personnel Manager" again?

2) This is almost as good as (yes it is real!): Dream Coordinator - I've always wanted to coordinate dreams but I keep getting sleepy...

Dream Coordinator
Dream Foundation is searching for a highly motivated and committed individual to coordinate dream granting in our Los Angeles office.

3. Do you have "Poker" and "Table Tennis" on your Resume? This is a real job posting for an Engineer position!

REQUIRED SKILLS:
  • Ruby on Rails Experience
  • SEO (Search Engine Optimization) knowledge
  • CSS based HTML presentation
NICE TO HAVE SKILLS:
  • Table Tennis
  • Poker
4) Underwear Affair Participant Coach Needed - Another one, this one on Craigslist. I almost want to do the job just to put it on my resume.


Friday, January 04, 2008

THREE NONPROFIT BLOG FAVORITES

The Best of 2007 and one new-comer
Forgive me if I sing the praises (one more time) of my three favorite bloggers, but I simply must. These three blogs have enough material to keep me reading all winter (and real I will!).

But before I begin, let me introduce a new nonprofit blog on the block. I don't know how I missed it, but it looks like it launched with a bang last September. UnCivilized Society is quite the entertaining blog. Admittedly I'm partial to the "Un's", ever since the Un-Cola, I've been into un.
  1. White Courtesy Telephone - Last time I checked this was Albert Ruesga's baby, but on a recent visit (shows how long I am on the uptake), I see a community of bloggers. I am here to sing the praises of them all. If I had to pick one word, I'd say "entranced". I'm still hoping to craft a post title so clever as this: Nonprofits, Virtual Worlds, and the Triumph of Ironic Distance
  2. GiftHub - What kind of being could blend bondage and philanthropy? That would be the self-proclaimed tongue-in-cheek moral tutor, Phil Cubeta. Brace yourself for the journey when you venture forth into Phil's land of satire and parable. There are times when the posts reach pure genius as in this one: Why Laundering Drug Money Through Philanthropy is Good for the Country
  3. The Artful Manager - I try to give props to Andrew Taylor at every opportunity. His blog leaves me with a sense of awe, but doesn't require I lose my sense of humor either: Separate and connected...like a giant fungus

2007 NONPROFIT HALL OF SHAME

This in from the AP: A Bangor, Maine woman is in jail on a felony theft charge for embezzling $60,000 (maybe more) from a nonprofit that assists families with foster and adopted children.

Police arrested Katherine Ratliff, 39, after workers at Adoptive & Foster Families of Maine discovered discrepancies in the organizations accounts.

From a post on Deal W. Hudson's blog: 85 percent of Roman Catholic dioceses that responded had discovered embezzlement of church money in the last five years, with 11 percent reporting that more than $500,000 had been stolen.

Related Nonprofit Eye post:

2006 Nonprofit Hall of Shame



Technorati Tags: , , , ,

Thursday, January 03, 2008

WOULD YOU WORK FOR NO MONEY?

Well would you? No, I'm not talking about volunteering. I mean do what you do every day at your nonprofit, but for free. Yes you have said "I love my job so much that I'd do it even if they didn't pay me". But what if they didn't?

A friend of mine recently said that she didn't know people who worked for nonprofits got paid! It bothered her that any of her donation went to someone doing accounting, she had given it to the kids!

So here we are worrying about excessive compensation, and she's worrying about compensation period.

The fix is in folks. Now that the new 990 is a reality, anyone paid more than $150,000/yr will be highlighted. Yes, this means you. While the average household income in the US still hovers around $36,000, try living in Manhattan or San Francisco (or LA for that matter) on under $100,000.

A recent cost-of-living comparison showed a $116,000 salary in LA to be the equivalent of $212,000 in Manhattan. Given numbers like that, the Executive Directors in Manhattan sure get a raw deal on the 990. They appear to be paid excessively while the LA equiv skates on by under the radar. Is nobody thinking over there at the IRS???

OK, last question (alas I don't have many answers today): Anyone know a for-profit executive responsible for running a multi-million dollar corporation that gets paid LESS than $150,000???

fin.