Monday, December 04, 2006

DON'T TELL THE DEVELOPMENT DEPARTMENT

I'm a big fan of the "Don't Tell the Donor" blog. Where else can we get an insiders look at nonprofit fundraising confessions? This anonymous blogger, known only as "a fundraiser" is apparently a Blackbaud Raisers Edge user.
"A fundraiser" has me (again) pondering the sad cross purposes of fundraising and finance. The two should be like body and mind--inseparable. "A Fundraiser", in a December 1st post titled "Projections, predictions, and the problem of past performance", confides:
...it discourages me when I hear fundraisers who feel they do not have a responsibility to provide cash flow projections and predictions to the finance teams.
It seems obvious that finding a resolution to these problems could only make us more effective. Accordingly I offer a few thoughts of my own, hopefully they'll get us a little further in that direction:

Accountants are bound by (at least) three guidelines:

1) Generally Accepted Accounting Practices (GAAP)
2) The Accrual accounting method
3) FASB 116

To accountants these are "obvious", to fundraising staff (or the general public for that matter) they may remain mysterious and arbitrary.

On the other hand, when an organization has a fundraiser, fundraising staff may count expenses as the occur, but consider the total income only when the event is over. The result (known as the "cash method" of accounting) may be that the financial statements just don't agree with the numbers in fundraising.

What we have here is a failure to communicate!

The tendency may be to abandon all hope and just keep (and refer to) separate records.

The solution? Accountants have no trouble creating a "cross fiscal year" report to reconcile the numbers with those of fundraising.

A simple briefing on accounting terminology and a corresponding understanding of the reporting needs of the fundraising folks...and voila...communication.


Technorati Tags: , , , ,

No comments: