Category Archives: Risk Management

Money Managing in Challenging Times

Posted on March 31, 2009 | 2 comments

valueFirst of all, thanks to all those who attended last weeks training.  The resources we talked about will be listed below.

It goes without saying that these are interesting times financially and operationally for the charitable sector.  Like many of you, I went through the economic slowdown that came after the tech meltdown in 2001 but this seems to be of a far greater magnitude.  But if there can be any silver lining in all of this, I think it is a greater focus on the operational side of nonprofit organizations.

I have read more articles about not-for-profit operations, administration and finance recently than I think I have in the last ten years.   And they have been positive.  They have spoken of the need for organizations to look at how their finances and operations are handled, to make sure they have the systems in place to be able to figure a) out exactly where they stand financially and b) what to do going forward as far as budgeting, cash flow and capacity.

While I’m not happy about the pain that will be felt by many organizations and the populations they serve I am pleased that these discussions are taking place and that we will end up with a stronger sector once this crisis passes.

Below are many links to articles and resources on money managing in tough times, divided into three sections.  More resources come out every day, so at best this list will only be complete as of the moment it is published, so if you know of any good resources that are not listed below please add them to the comments section.  And don’t forget to subscribe to the comments to see what others add.

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Posted in Governance, Nonprofit Accounting, Policies and Procedures, Risk Management

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Where the Money Went

Posted on March 20, 2009 | Leave a comment

2273635564_840c6966671I work for a nonprofit which is home to several named endowed funds. We are getting ready to send out annual statements for 2008. Unfortunately, all the funds suffered a loss. A lot has to do with the economic state we are in, but how do you think would be the best way to approach this to families who will see the loss and subsequently question it?

You are not alone, I know several organizations that have similar issues. I think you need to be as honest and straight forward as possible with your donors. Unless they have been under a rock they should be aware of the financial situation we are all in and what has happened to investments in just about everything. They may already be anticipating losses in their funds.

I would include as much information as you can in those statements. Were the losses your funds suffered less that what the market lost in general? That would be something to highlight Were steps taken to minimize losses when the managers realized the market was heading south? I would highlight any ‘good’ news as much as you can. It is the donor’s money and they have a right to ask questions, but if we are proactive in giving them information up front perhaps we can forestall some questions. But you will get some so you should be prepared in advance to answer them all as completely as possible. Saying “I don’t know” is bad, and lying to a donor or covering up bad news is even worse.

If mistakes were made in handling the endowed funds on your end, say perhaps the funds were invested a little more aggressively than they should have been, be up front and let them know that mistakes will not happen again. And maybe letting them know what your investment plan going forward would be helpful as well.

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Posted in Governance, Nonprofit Accounting, Policies and Procedures, Q&A, Risk Management

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Nonprofit News Roundup

Posted on March 6, 2009 | 1 comment

News StandIn case you missed any of these:

Here is a NY Times Op Ed that says businesses should be more nonprofit-like.

Need tech stuff?  Have you tried TechSoup yet?  You should check them out and read about these seven solutions for (at least) seven tech challenges.

There are two news pieces from the U.S. Government Accountability Office regarding nonprofits.  The first talks about improving the accuracy that donors report charitable gifts on their tax forms.  The other focuses on where federal dollars received by nonprofits go.

The last paragraph of the second piece has some pretty large implications I think, as it implies that they have trouble collecting data about where the money is going.  Click through to the full report to read more on the data collection issues.  I hope this is something that the GAO will push to be fixed because if the Feds are not getting good information about how the money is being used it might possibly result in less money being available.

Changes in COBRA benefits

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Posted in Nonprofit Accounting, Policies and Procedures, Risk Management

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