Free class on how charities account for expenses

April 17, 2014, 8:37 am

Learn All About Nonprofit Expense Accounting on May 1 is the announcement from Sift Media of another free webinar on NPO accounting. The class is Expense Accounting – Key Accounting and Reporting Issues for Nonprofits #3.

The free class is one hour long and will be offered on May 1, 2014 at 2:00 p.m. Eastern. That means 11:00 here on the west coast.

Some of the topics covered will be the functional allocation of expenses and joint cost allocation.

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Portion of telemarketing proceeds retained by charities in Michigan

March 14, 2014, 9:04 am

Previously mentioned that in 2012 California charities retained 37% of the total proceeds raised by telemarketing firms. In New York, the percentage going to the charities was 38%.

The Michigan Attorney General released their report on telemarketing campaigns in the state for 2013 –  

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Portion of telemarketing proceeds retained by charities in CA and NY during 2012

March 1, 2014, 8:00 am

What portion of telemarketing campaigns makes its way to charities for whom the campaigns were conducted?

Here’s the 2012 results based on two recent articles:

  • New York – charities retained about 38%
  • California – charities retained about 37%

The articles:

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More good stuff on overhead ratios and “worst charities.” – 2–14

February 24, 2014, 7:55 am

Some more articles that are worth attention but I don’t have enough time to respond in a full post. Here are the headlines, with links and a brief comment below: Super Bowl t-shirts, costs to raise funds, and an art museum gets ready to close its doors.

Impact

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More good stuff on overhead ratios and “worst charities” – 11-7-13

November 7, 2013, 8:22 am

Two great opinion pieces in the Chronicle of Philanthropy that are worth your time, both dealing with the ‘overhead’ issue. At first glance they seem to have opposing views. I think they are both correct with many good points, which illustrates the complexity of the issues.

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More good stuff on overhead ratios and “worst charities” – 10-16-13

October 16, 2013, 8:39 am

I’m adding a new category of good stuff, which will be called “impact” for the time being.

Here are some more articles worth attention but I don’t have enough time to comment in a full post. Here are the headlines, with links and a brief comment below:

  • When Good Is Not Good Enough –
  • To Get to the Good, You Gotta’ Dance With the Wicked
  • Why I Think Nonprofits Should Act More Like Businesses
  • Revisiting America’s worst charities and rethinking overhead: Interview with Kendall Taggart  
  • Investigators say police charity hired felons to raise donations

 

Impact

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A different perspective on what ails the critique of what ails the nonprofit sector

October 2, 2013, 7:00 am

The debate around what is happening in the NPO sector is a good and healthy.

For some serious pushback against the critique of the charity sector by Mr. Dan Pallotta (which I’ve mentioned here and here), check out the article by Mr. Phil Buchanan at Huffington Post:  Getting the Facts Straight About the Nonprofit Sector.

If you have been following the conversations in the NPO community, you really ought to check out Mr. Buchanan’s article.

Here are my brief thoughts on three of his four critiques of the critique:

First, Pallotta says the sector has failed because we haven’t “ended” homelessness or poverty.

Mr. Buchanan wonders that if that’s the standard, then perhaps the NPO community should get full credit for improved infant mortality.

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More good stuff on overhead ratios and “worst charities” – 9-9-13

September 9, 2013, 6:54 am

Some more articles that are worth attention but I don’t have enough time to comment in a full post. Not a lot going on that I’ve been reading until I saw two articles in two days.

Here’s a few articles exploring the challenges of outcome measures, whether NPOs are spending enough on infrastructure, possible regulatory revisions in Florida, and is anyone criticizing the practices in the “worst charities” articles?

Previous lists of good stuff here and here.

“Overhead ratio”

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Charity pushes back against CNN and Tampa Bay Times. CNN stands firm.

August 30, 2013, 5:09 pm

The charity at the top of the America’s Worst Charities list compiled by the Tampa Bay Times, Center for Investigative Research and CNN, Kids Wish Network, is pushing back against the methodology. You can see the detail about the Times’ reporting on the charity here.

(This post will be a deep inside-baseball discussion.)

You can see the rebuttal here.

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Template for analyzing financial data of charities that are in the news

August 30, 2013, 7:55 am

If you want to see an example of how to analyze the financial statements of a charity that has lots of GIK or lots of telemarketing costs or lots of publicity, check out Brian Mittendorf’s illustration at Counting on Charity: When Summary Accounting Metrics Fall Short:  The Case of Breast Cancer Charities of America.

In that post he analyzes the financial statements of that charity. Using that post as an example, here’s a few steps you can take:

Start with total revenue, total expenses, and total program costs.

Look at the GIK, especially if it is going places or has uses other than what otherwise would seem to be the core programs. Subtract that from revenue and expenses. That exact same amount also comes out of program costs.

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Telemarketing pays off in the long run? Time for some evidence, part 2

July 23, 2013, 7:23 am

In previous post, I said we need more examples to illustrate that charities can accelerate their revenue through a major, sustained telemarketing campaign beyond what they would have done otherwise.

I mentioned one anonymous illustration supporting the idea and three weak counter illustrations.

Three more counter-examples

I’ve looked at the American’s Worst Charities data quite a few times. Each time I get the impression that these long-running telemarketing campaigns are not doing what such efforts are supposed to be doing, specifically, generating a lot of new money over a long-term horizon.

After thinking about the previous two articles together, I decided to do a little analysis.

My small sample confirmed my previous observation – the campaigns are generating small amounts of new funds.

I picked a haphazard starting point, #10 on the list, and pulled data for the next three charities.

Here’s what I see.

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Telemarketing pays off in the long run? Time for some evidence, part 1.

July 22, 2013, 10:36 am

One of the reasons cited for charities to make heavy use of telemarketing in spite of the high cost is that with a sustained campaign a charity will grow substantially more than it would otherwise. By incurring heavy costs up front, the charity will have far more money for mission in a few years.

As a concept, I agree.

However, it is time for more than one or five anecdotes.

One anonymous example supporting the concept

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More good stuff on overhead ratios and “worst charities” – 7-9-13

July 9, 2013, 7:15 am

Some more articles that are worth attention. I don’t have time to discuss them in a full post.

“Overhead ratio”

StatesmanJournal – Oregon charity law is a firstRead the rest of this entry »


More good stuff on overhead ratios and “worst charities” – 6-29-13

June 29, 2013, 8:24 am

An actual conversation is going about how to use overhead ratios and what outcome measures might look like. Lots of writers out on the ‘net are involved.

Writers are actually engaging ideas from other writers. All of us working in the NPO community need this conversation to develop ideas on how to move away from the misuse of overhead ratios that has been going on for decades.  I think this conversation is a good thing.

In addition, the feature articles by the Tampa Bay Times, Center for Investigative Reporting, and CNN on “America’s worst charities” is developing legs.

There are so many articles I’d like to discuss in my own post but time doesn’t allow doing so.

Soooo, I’ll start to aggregate a few of the more interesting articles.

My comments usually will be limited to one or three sentences.

Focus will be on two areas:

  • Overhead ratio discussion
  • Developments flowing from the “America’s Worst Charities” articles

Here’s my first list:

Overhead ratio

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The “worst charities” discussion isn’t about overhead ratios

June 28, 2013, 8:35 am

The ranking approach used by the Tampa Bay Times in their “America’s Worst Charities” articles is focusing on the high fees paid to telemarketers rather than just the overhead ratio. One of the threads of the online discussions is that their methodology is just focused on overhead ratios.

That is not the case. The overhead ratio conversation is a separate issue. The Tampa Bay Times approach focuses on the high cost of telemarketing as a fundraising technique and the issues related to that industry.

The reporters outlined their approach in a separate article here.

As I looked at bits and pieces of the data, I noticed several of the charities had respectable program ratios, so I decided to poke at the data.

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