Development - Mississippi Society of Certified Public Accountants

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The Bermuda Triangle:
Accounting,
and Program
Development
Services
I guess I'll go sit and watch Pete and Bob talk
now, but hey…I do get a CPE hour
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Speaker Biography…Bob Mims
Bob Mims is the controller and director of investments at Ducks Unlimited,
Inc. In his role with DU, Bob serves on the Environmental Not-for-Profit
Roundtable, the National Advisory Council of FASB, and is involved in the
decisions related to the finances and strategic planning for the company.
He is also the CFO of DU’s sister organization, Wetlands America Trust.
Mr. Mims previously served ten years for KPMG as a senior manager in the
financial services field. Prior to his parole from public accounting, Bob was
the primary recruiter and local office training coordinator for the Memphis,
Tennessee and Jackson, Mississippi offices. Bob also was extensively
involved in KPMG training, earning National Instructor of the Year honors
on three occasions. He is currently involved in training for National
Nonprofit AICPA courses and chairs the Not-for-Profit conference for the
AICPA.
Bob lives in Memphis with his wife and four children, coaches basketball,
and has been involved in several mission trips to East Europe, where he
taught Economics to University students. Bob has helped other nonprofits
facilitate their strategic planning design. Other courses Bob has taught
include Nonprofits and Reserves, Cost allocations and SOP 98-2, Fraud
Basics and Detection (an 8-hour course to the Federal judiciary),
Benchmarking Nonprofits, Personality Characteristics and Traits, Direct
and Indirect Cost Rates, Nonprofit Sustainability, Strategic Planning, and
The impact of Donor Intent: “Walking through the Gray Areas of
Accounting.”
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Expectations
Grasp the challenges associated with three distinct
areas of a not-for-profit organization
• Accounting
• Development
• Program
Understand the solutions
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Let’s first look in the mirror of who we are?
The glass is not half full
(Development)
The glass is not half empty
(Program)
Our view is that that glass is
actually half empty, but there
is a BIG hole in the bottom of
the cup and we don’t have
the funds to fill that hole so
we may as well just give up
now. (Accounting)
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Let’s talk about the Triangle
Accounting – the
“money counters”
Program –
the “money
spenders”
Development
– the “money
makers”
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Development’s “statement of faith”
“I’m a magician”
 “Anything you can do, I can do
better 
I can and will count the same money
twice
After counting the same money twice, I
can and promise to count that same
money a third and fourth time.
I promise to switch jobs to another
nonprofit after counting said money
the third time.
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Program’s “statement of faith”
My mission is more important than
your job
My mission is more important than
your life
I can and will spend what is really
not there
I realize that by having the most
employees in our department that
the loudest voice usually wins
I promise to have a loud voice
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Accounting’s “statement of faith”
I promise to be Write.
I will always question the amounts reported by
Development and slash the budgets from Program
I promise to confuse my board by counting for the
endowments in three different net asset categories
I can and will attend Accounting only type
conferences where I can and will complain about
Development and Program staff
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Perception Issue – How we view each other
Development
Program
Accounting
But remember – we all
have the same end goal
in mind!
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Favorite TV show
Program
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Development
Accounting
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Some Examples
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Definition of Insanity
A workout program that I ordered but did not
complete
Repeating the same thing over and over again
expecting different results
Examples include:
• Diet plan with cookies and pizza
• Buying season tickets to Ole Miss games hoping for that
national championship
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Accounting Definition of Insanity
A Capital
Campaign
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Campaign Challenges
Development
Program
• Planned gifts
• Pledges
• Major gifts
Can spend it
Can spend it
Can leverage them
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Accounting
No
No
How?
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More Campaign Challenges
Development
Program
Accounting
• Does the Board believe that the amount raised will
be spent?
• Does the Board know that the Campaign began a
few years ago (silent phase)?
• Is there a program expectation of spending more
than business as usual?
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Campaign Solutions
Development
• Charged with breaking out the revenue expectations
to specific amounts and categories
Program
• Map out the expected expenses over the term of the
campaign
Accounting
• Make sure that numbers 1 and 2 are not less than 0
• Map out the nets and communicate what will be left
over
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Set a campaign goal for your NET
Surplus target of $12 million in
reserves after five years (or is it 6)?
Budget Plan
Plan
Plan
Plan
Plan
FY15 FY16 FY17 FY18 FY19 FY20
Operational
surplus
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2,000 2,000 2,000 2,000 2,000 2,000
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Mapping out your Campaign revenues that are cash
Budget
Plan
Plan
Plan
Plan
Plan
FY15
FY16
FY17
FY18
FY19
FY20
Events
40,000 41,200 42,436 43,709 45,020 46,371
Major gifts
25,000 25,750 26,523 27,318 28,138 28,982
Royalties
3,000
3,090
3,183
3,278
3,377
3,478
Direct Mail - net
Planned gift
maturities
3,000
3,090
3,183
3,278
3,377
3,478
1,500
1,545
1,591
1,639
1,688
1,739
Totals
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72,500 74,675 76,915 79,223 81,599 84,047
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Load in your other revenue and expenses
Budget
Plan
Plan
Plan
Plan
Plan
FY15
FY16
FY17
FY18
FY19
FY20
Total Philanthropy
72,500
74,675
76,915
79,223
81,599
84,047
Total Govt/Contractual
80,000
80,000
80,000
80,000
80,000
80,000
Investment income
1,000
1,000
1,000
1,000
1,000
1,000
Inkind
5,000
5,000
5,000
5,000
5,000
5,000
158,500
160,675
162,915
165,223
167,599
170,047
125,200
126,940
128,732
130,578
132,480
134,438
23,475
23,801
24,137
24,483
24,840
25,207
7,825
7,934
8,046
8,161
8,280
8,402
156,500
158,675
160,915
163,223
165,599
168,047
Operational surplus
2,000
2,000
2,000
2,000
2,000
2,000
Nonoperational surplus
1,000
1,000
1,000
1,000
1,000
1,000
Revenue
Total revenue
Expenses
Program
Fundraising
Admin
Total Expense
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Favorite Movie
Program
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Development
Accounting
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What about grant income problems?
“This position will be fully funded by the grant”
“All money as revenue is green and I’m offended to
hear otherwise”
“We are leaving money on the table by not accepting
this grant”
What happens to these positions and programs
when the grant ends?
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Are there solutions to the program/grant
income issue?
NO
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Can there be a solution here?
Development
• Charged with understanding and raising
philanthropy that pays for fundraising and costs the
grant does not cover
Program
• Keep Development and Accounting in the loop and
understand indirect and other costs of program
Accounting
• Do the math
• Help with rules on restricted funds paying for
overhead
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Favorite reality show
Program
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Development
Accounting
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Major Gift Challenges
Development
Program
Accounting
• Restricted to its use
• Does not pay for Fundraising
• Multi-year payment schedule
• Bequests and other planned gifts
• Revocable vs. Irrevocable
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Major Gift Solutions
Development
Program
Accounting
• Gift acceptance policy
• Charge for use of restricted gifts (tax on overhead)
• “Fund before you build” policy
• Gift counting policy
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Favorite Superhero
Program
Rocky
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Development
Ironman
Accounting
Frodo Baggins
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Unusual Contribution Challenges
Development
• We take all
gifts!
• A new
donor!
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Program
Accounting
• Think of
how this
could
benefit our
clients!
• What are
the risks
and costs
associated
with this?
• Let’s hire
some
more staff
to work
with this.
• Not ever
gift is a
“good”
gift.
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A few examples of unusual contributions
Board member’s rental property that he couldn’t sell for the
past 2 years.
Empty building (which is sitting on top of the old tanks from a
gas station that used to be on this property)
Fur coats donated to a domestic violence shelter
Oil, gas, and/or mineral rights
Confiscated unlicensed athletic apparel
“Beautiful” artwork when the artist is a major donor
Toilet paper and 22 hand-knitted scarves
“Interesting” pieces of used clothing
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Unusual Contribution Solutions
Development
Program
Accounting
• Gift acceptance policy
• Approval process for non-cash contributions
• Communication
• Education about organizational risks
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Bottom line is:
Revenue is boiled down to four types
•
•
•
•
Philanthropy
Contracted/Government grants
Investment income
In kind
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Favorite Disney movie
Program
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Development
Accounting
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The Annual Budgeting Process - Challenges
Development
•
•
•
Just plug the
budget gap
with new gifts!
We need more
donor relations
money
All special
events make
money, right?
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Program
•
We need more.
•
Think of the
kids who need
our services.
•
Development
will raise it,
and the
accounting
department is
fine with just
one employee.
Accounting
•
No you can’t
use all of your
leftover budget
to buy extra
supplies on the
last day of the
fiscal year!
•
Please be
realistic.
•
I’m not a
magician.
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Budgeting Process - Solutions
Education-Ask Development and Program to come
to one of your ‘cult’ seminars
How many accountants does it take to change a
lightbulb?
Setting up budget parameters (with no numbers)
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Favorite Actor
Program
Helen Mirren
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Development
Zach Galifinakas
Accounting
Bob Newhart
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We hope that our session will help you feel more like
this:
Instead of this:
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QUESTIONS?
Bob Mims, CPA
Ducks Unlimited
bmims@ducks.org
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