Jim Ulvog

New overtime rules go into effect December 2016

Image courtesy of Adobe Stock.
Image courtesy of Adobe Stock.

It is only a few months until lots more people must be paid time-and-a-half for the actual hours worked beyond 40 a week. This will likely affect a huge number of charities and churches.

Just so you get the picture, after 12/1/16 your charity will need to track the actual hours for any full-time administrative staff or program managers earning less than about $47K and pay them for all hours worked over 40 per week.

Here are two more articles providing an intro to the issue.

5/23 – Associations Now – Overtime rule released: how organizations can prepare – additional discussion on how to start planning for the new overtime rules.

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Jim Ulvog

To all those serving in the American military or who have served

Image courtesy of Adobe Stock.
Image courtesy of Adobe Stock.

I was on active duty in the U.S. Air Force a mere four years. I never got within 3,000 miles of hostile action against American forces. To top it off, my small contribution was decades ago.

As a result, I am squeamishly uncomfortable accepting the appreciation when someone tells me “Thanks for your service.”

It took me a few years to get to a place where I could accept those comments.

I now graciously and proudly accept those expressions of appreciation from my fellow Americans, not because of what I did so long ago, but on behalf of all those soldiers, sailors, marines, and airmen who do not have someone looking them in the eye, shaking their hand, and saying “thanks.”

So for all those troops pulling alerts, standing watch, scheduling logistics, or taking fire, please know that vast numbers of Americans are grateful for your service.

I pass on to you their thanks.

You are there, not here, so many people have thanked me instead. It is you they are really thanking.

While today we remember with gratitude those who did not return, I hope those who are serving today hear the appreciation.

Jim Ulvog

Overview of new lease accounting rules

Image courtesy of DollarPhotoClub.com before they merged into Adobe Stock.
Image courtesy of DollarPhotoClub.com before they merged into Adobe Stock.

In about three years there will be a complete overhaul of the accounting rules for leases.

For a quick introduction to the changes, here are a few of the comments in a recent AICPA webinar.  I will keep this nontechnical.

“Right of use” asset

The basic concept is that a lease contract gives you the right to control the use of property, equipment, office space, or some other identified asset for a specific period of time. The economic substance is that the asset is yours to use for the term of the lease.

By creating a “right of use”, the lease contract gives you an asset that needs to be reflected on the balance sheet. In addition the liability for future payments needs to be recognized.

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Jim Ulvog

It is time for charities to focus on the new overtime rules

Image courtesy of Adobe Stock.
Image courtesy of Adobe Stock.

The Department of Labor announced on 5/18/16 that new overtime rules will go into effect on December 1, 2016. That is about six months from now.

In one over-summarized sentence, here is the deal: for employees paid less than $47,476 annually, the employer needs to develop a system to track actual hours worked so employees are paid for overtime hours, with very narrow exceptions for charities.

Employees paid over that amount must still meet the previous requirements for job duties and be paid on salary basis to avoid the overtime requirement. The threshold will be revised every three years.

In case you don’t immediately see some implementation issues, then think about your super-dedicated first level supervisors paid less than $48K and ask yourself if you know how many hours they spend outside the office answering emails and how many extra hours they spend in the office beyond what they are scheduled.

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Jim Ulvog

Initial reactions to Sen. Grassley’s letter to Wounded Warrior Project

Image courtesy of DollarPhotoClub.com
Image courtesy of DollarPhotoClub.com

Here are a few of the first reactions I’ve seen to the letter that was released to the media by the Senator’s staff on Monday.

Professor Brian Mittendorf describes what he sees as The Fundamental Issue in the Wounded Warrior Project Inquiry. The underlying issue in the letter from Senator Grassley to WWP is just a different way to look at the core issues in the discussion. The issue: (more…)

Jim Ulvog

Senator Grassley sends letter to Wounded Warrior Project asking for more information

Image courtesy of Adobe Stock.
Image courtesy of Adobe Stock.

Yesterday Sen. Grassley sent another information request to Wounded Warrior Project. The request went by electronic mail, which means a couple of hours later it appeared in public.

The full letter is visible here.

The letter was discussed in an article at News4Jax.com:  Senator questions Wounded Warrior Project spending.

First few comments are looking at donated ads. Letter asserts that backing out about $80M of donated ads drops the program service percentage from 80.6% down to 66.6%.

I tried recalculating the 66% number in half a dozen different ways but can’t figure out how the calculation was made.

Fourth paragraph repeats the criticism of watchdog organizations who exclude SOP 98-2 allocations from program. Paragraph suggests that $41M of joint cost allocations should be removed from program.

Take your pick on how to account for long-term care support

Fifth paragraph opens up a very confusing discussion of funding for the Long-Term Support Trust. Since the letter is a public document I will quote it: (more…)

Jim Ulvog

Discussions on the WWP financial statements I would like to see

Image courtesy of Adobe Stock.
Image courtesy of Adobe Stock.

As I’ve watched coverage of the Wounded Warrior Project financial statements in recent months, I have been surprised by the shallowness of the coverage. Minor issues draw heavy focus while major issues remain unaddressed.

Majoring on the minors

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Jim Ulvog

GuideStar begins major effort to let charities report their outcomes

Image courtesy of DollarPhotoClub.com
Image courtesy of DollarPhotoClub.com

GuideStar Premium is a new feature allowing charities to describe their goals and what progress they’re making. This provides NPOs the opportunity to quantify their outcomes and impacts.

This is a big step. It is a wonderful experiment.

GuideStar Platinum: Measuring Nonprofit Performance at Scale provides an overview of the new platform. This page provides more detail on the service.

Charities are allowed to self define the measures used. Organizations self measure their progress.

This will create wide variety in the measurement tools. I believe that is a wonderful thing. Self defining outcomes will allow a measure that is very carefully tailored to a particular organization. Over time I am guessing there will be some sort of comparability between charities within a specific sector which will allow some vague level of comparison within sectors.

The important point is that the outcomes for a rescue mission are radically different from an at-risk youth mentoring program, which in turn are radically different from a civil rights group or public issue advocacy group. Each organization needs a metric that specifically addresses what that organization is trying to accomplish.

There are somewhere in the range of 250 charities listed at Platinum Early Adopters. Congrats to these organizations taking the first struggling steps to publicly declare their quantitative progress against their outcome goals.

I took a look at the results for about a dozen of those early adopters. Here’s what I learned from my nonrandom sample.

Traditional input measurement

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Jim Ulvog

Deeper coverage of Wounded Warrior Project – 5/10

I’ve noticed a number of articles lately that dive deeper into the WWP issues that the first round of coverage. These articles are discussing substance.

4/24 – Wounded Warrior Project – Statement by interim COO Charlie Fletcher – Interim COO promised to continue mission to serve wounded warriors and make the changes need to move organization forward.

5/4 – Florida Times Union at jacksonvile.com – First Coast News: Wounded Warrior Project executive resigns – The WWP Chief Programs Officer resigned, citing personal reasons.

Article gives no more detail.

The webpage listing the executive staff shows the CPO position as second of nineteen. My paraphrase is this looks like a strategic planning position with additional emphasis on managing and directing programs. His most recent experience was in development. He is a ’93 West Point grad.

Following article gives some speculation of what might be behind the resignation.

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Jim Ulvog

Portion of churches with revenue greater than expenses

Superb infograph shows percentage of churches whose income is greater than their expenses.

Lesson I draw from the graph:  Recovery from the Great Recession has been slow for churches. Many churches are still struggling. Those are the results I would expect to see.

Visit Church Law & Tax extract from their March 2015 edition of Church Finance Today: Percentage of Churches with Income Exceeding Expenses – their analysis is broken out into nine different regions of the United States.

A few pieces of information:

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Jim Ulvog

More coverage of Wounded Warrior Project – 4/21

Seems like the coverage of the WWP financial situation is slowing down. A few interesting articles for your consideration:

4/9 – David Bauerlein at Florida Times-Union – Ousted Wounded Warrior Project executives defend in their leadership of Jacksonville-based charity – This is the original article that generated the AP story I mentioned earlier. The Times-Union article is far better.

Note to the public relations, financial, and executive leadership of charities: pay attention to this article. The reporter not only understands joint cost allocation rules, he can explain the issues. Check out the section of the report titled How much really goes to veterans?

Perhaps it is just a function that I don’t get out very much, but I have noticed over the last couple of years that there are several reporters around the country who have a solid understanding of nonprofit accounting. There are quite a few reporters who are skilled at reading a 990. Keep that in mind as you interact with media.

More clearly than I have read anywhere else, this article explains Mr. Nardizzi’s regrets.  He wishes the 2014 conference had not been held at the Broadmoor. It doesn’t matter that WWP got discounts on room rates, food, and meeting space. He also wishes he had not rappelled down the side of the building.

Both of those things have given an impression the organization is wasteful.

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Jim Ulvog

More coverage of Wounded Warrior Project. Former CEO and COO talking to media. 4/12

Image courtesy of DollarPhotoClub.com
Image courtesy of DollarPhotoClub.com

Stephen Nardizzi and Al Giordano are talking to a variety of media outlets. They are defending the organization and their work. We hearing their side of the story.

Here are a few articles of interest in the last week or so. One odd tidbit is the major report received as part of the board’s investigation was provided in oral form only – the AP article says the board says there was no written report.

Another surprising tidbit – In the Chronicle of Philanthropy interview, Mr. Nardizzi indicates he was told not to speak to the media when the story broke.

One more observation after reading these articles – none of the following reports address the issue of whether WWP does or does not have a broken corporate culture.

4/10 – AP – 2 ousted executives defend work at Wounded Warrior Project – Mr. Nardizzi has repeated his comments on the things he regrets. Previous comments were not clear to me. In this article he is quoted as saying in a different interview that wishes the conference drawing so much attention has been located somewhere other than a luxury hotel. He also wishes he had not rappelled down the side of the building.

Those things allowed others (read that as media) to misrepresent the organization. His regret is allowing things to happen which would be  misrepresented.

His previous comments were confusing to me.

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Jim Ulvog

First class mail rates to drop April 10, 2016

Image courtesy of DollarPhotoClub.com
Image courtesy of DollarPhotoClub.com

Price for first class mail will drop from $0.49 to $0.47 on 4/10/16. Price for each additional ounces will drop from $0.22 to $0.21.

If you are a large enough organization to have a shipping department or a staff person who keeps up on all the minutia of shipping, then you already knew about this change.

If you are a small organization like me, you may not have noticed. Since I just caught wind of it yesterday, I’m sure there are lots of other people who don’t know about it yet.

A surcharge was put in place two years ago, in January 2014, equal to the reductions mentioned above. The surcharge was designed to catch up for the revenue drop during the great recession. The regulator for postal prices (Postal Regulatory Commission) ordered the surcharge added in 2014 and ordered it to be dropped this month.

After a search, I could not find the new price list at the USPS website, so I’m left with a guess that the flat envelope rates will change by the same amounts.

Additional info:

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Jim Ulvog

Increase of minimum wage in California will have big impact on charities in the state

Image courtesy of DollarPhotoClub.com
Image courtesy of DollarPhotoClub.com

The California legislature has approved and the governor is expected to sign a bill that will increase the minimum wage in California to $15 an hour over the next several years.

The minimum wage in the state will go from $10.00 now to $10.50 on 1/1/17. It will then increase to $11.00 on 1/1/18 and then another $1.00 a year until reaching $15.00 on 1/1/22. After that, the minimum wage will be tied to inflation.

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Jim Ulvog

Lots of news about Wounded Warrior Project controversy in last few days – 4/1

Lots of things in the news this week. Here are a few things that caught my eye, including Steve Nardizzi and Al Giordano starting to speak out on public platforms.

Public service announcement ads – You can find the Youtube feed of the WWP PSAs here. Brian Mittendorf asked to see the PSAs and WWP provided the link.

Ponder ads in light of ASC 958-720-45 requirements. There is huge room for discussion here. As a tip for enterprising reporters, here are my two tweets:

wwp joint cost alloc

References:

  • ASC 958-720-45-35 – call to action
  • -48 – audience
  • -50 – content (oops, I mentioned -48 in the tweet)

Former CEO and COO speak up – Mr. Nardizzi and Mr. Giordano started a twitter account: TheWoundedTruth, @WoundedTruth. If you have a twitter account and have been reading my articles, you might want to follow @WoundedTruth.

They also started a blog: The Wounded Truth. If you are interested enough to still be reading, you might want to add the blog to your RSS feed.

3/30 – Stars and Stripes – Feud erupts at Wounded Warrior Project between board and founder – WWP founder John Melia has publicly called for the resignation of WWP board chair Anthony Odierno. Reason for the call for resignation is that a meeting which had been scheduled on April 4 between the board and Mr. Melia was cancelled by the board. (more…)

Jim Ulvog