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Report: Tour of Missouri needs fiscal policy guide – Kansas City Star

In Discussables, News on October 24, 2009 at 9:53 am

More stories hit the media on financial accountability and NPO’s. Is there an organization out there that can take this 600 pound gorilla on? A group needs to convene to research and make recommendations on what policies and oversight should and could be occurring to ensure donor rights and advocacy of respectful and honorable use of donated funds.

Report: Tour of Missouri needs fiscal policy guide – Kansas City Star

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Be Accountable

In Discussables, News on October 8, 2009 at 10:52 am

From the Hartford Courant, October 7th, 2009

Attorney General Richard Blumenthal on Wednesday asked the governor for an accounting of funds from specialty state license plates, saying at least $500,000 has been illegally diverted to Connecticut’s General Fund to help balance the state’s troubled budget……Usurping donor intent after the state solicits and receives such contributions is forbidden by constitutional law, fairness and common sense, Blumenthal said.”

http://www.courant.com/news/local/statewire/hc-ap-ct-licenseplatefundsoct07,0,2140204.story

And so it goes. Not that this is new. Too often, as highlighted in my post of Sept 25th, the ones raising the money and the ones spending the money in an NPO, have mutually exclusive goals. This tension always exists, but appears to increase as the economy forces nonprofits to make some critical operating decisions. And when the decisions are driven by personal gain it becomes all the more egregious. Not that Rell has personal gain in this, but the lack of respect and the hubris in assumption of donated funds as a free checkbook is disturbing and all too common.

If you are on a Board of Trustees you need to become more empowered in your governance role. Ask questions and expect answers. And if it’s still not clear ask some more. Do not allow administration to appease you with arguments of their managerial control and administrative duties vs your role in governance. Ensuring the intent of donor funds is honored is governance.

If you are administering an NPO, check your intentions. If indeed decisions need to be made about donor funds, and the use of such funds that is not in compliance with donor intent, you still have recourse. Go back to the donor or donors and explain the need. Ask permission. Seek counsel from the AG’s office. And if you find you still cannot use the funds to solve the financial issue, then build a case for more donations to meet your need.

Yes its hard work, but thats our role.

Financial Practice Standardization for nonprofits?

In Discussables, News on September 25, 2009 at 7:50 am

Recently, UConn University came under criticism for their financial practices with the UConn Foundation. Unfortunately, this isnt the first time nonprofit organizations have been questioned or targeted for scrutiny of their financial accounting and use of donor funds. Mostly it appears to come from a lack of standard reporting and accounting practices across the industry.  Many groups have long been trying to “‘follow the money”.

In many cases it is merely a practice of unclear or complicated accounting and reporting practices. Groups such as Guidestar.org and the IRS, whose quest has recently brought about a reframing of the 990 form for all nonprofit organizations, have devoted countless hours and resources to this complicated matter.

Most recently, hospitals have been under attack, concerns arising around their use of funds in charity care and other program needs.  Many critics, such as the Washington Post,  claim the IRS rule implementing the law is “so vague that nonprofit hospitals have been able to exploit it by offering some free services but often little aid to the poorest people in their communities.”

In the search for transparency, some universal laws should be considered:

1. Not all charities are alike

2. Nonprofits are predominately run by the very community which supports them financially.

3. Too often the ones raising the funds and the ones spending the funds have competing goals

So a short poll:

Given the recent dramatic increase in new not for profits organizations, the continued increase in philanthropic revenue overall and the increased call for transparency, has the time come for a set of uniform financial accounting and reporting standards to be followed?

1.Yes, it will allow for donors to understand across the board how the money is being received and spent.

2. No, each charity is unique and should account and report specific to its own needs

3. Possibly, but more study is needed.