There is a fire burning in the nonprofit community. The fire is the issue of valuing donated pharmaceuticals. Primarily issue is about mebendazole. Albendazole and antibiotics are involved, but to a much lesser degree. There are many alarm bells ringing.
The loudest fire alarm went off yesterday.
…is the frequent expression of appreciation from someone who notices another person wearing a ball cap indicating they’ve served in the armed forces.
I was told that recently.
If you do a bit of research on paying people being compensation or whether to treat them as employee or independent contractor, you will see an obvious trend in the discussions.
If someone is providing services to your church and you pay them, there is usually going to be some taxable income. It is fairly unusual for those services to be in the category of independent contractor.
Corey Pfaffe has three more Q&A discussions posted at MinistryCPA blog. All deal with whether amounts paid to a person for services are taxable and whether such payments should be reported on a W-2 as an employee or on a 1099 as an independent contractor: (more…)
“All expenditures incurred in acquiring the equipment and preparing it for use,”
is the very short answer from Danny Oertle in his post at Nonprofit GPS, Not-for-Profit Organizations Acquiring New Fixed Assets – What Should You Capitalize?
Mission: Accountable explains how in their post Got Free Rent?
The post walks through a good example and gives the journal entries that would be recorded during the first, free months and then the entry over the remaining term.
The same concepts would apply if the free months occurred at some other point during the lease.
It’s a clear, helpful example. Check it out.
The phrase un-mis-educate is coined by “J” in a post, Rethinking Efficiency, at AidSpeak.
J suggests one of the reasons NPOs (NGOs for my international readers) are under so much pressure on overhead ratios is that NPOs have spent a generation mis-educating donors that organization X is better than Y because 90% or 98% of donations to X go to program services.
I agree.
J says that NPOs need to undo the mis-education, thus the need to un-mis-educate donors. I think that is a great turn of phrase.
I did a quick search on the ‘net before starting to research the 990s of Breast Cancer Society of Mesa, Arizona. Found out that a few researchers have been looking at their finances in addition to the Chronicle of Philanthropy.
If you are following the GIK meds issue, you might be interested in these reports:
First, ABC15 in Phoenix, Arizona has a print article in May 2012 – Questions about Valley Breast cancer charity, where donation money is really used. They also have an on-air segment that doesn’t go into as much detail. There is an on-camera interview with the CEO in the video report.
Colette Kamps, CPA of Nonprofit GPS has some background on how long it is taking the IRS to process applications for exempt status.
In her post, How Long Does it Take to Get IRS Approval for Tax Exemption?, she says:
What’s the difference between parody and satire? Which one violates someone’s intellectual property rights?
Umm. I have no idea.
Or at least I didn’t until I read a newsletter from Gammon and Grange, which pointed to Kenneth Liu’s guest post at Forbes: Parodies of Rap Artist Psy’s Gangnam Style Are Fun. But Are They Legal?
Mr. Liu explains the difference in the context of an amazingly popular video, “Oppa Gangnam Style” and the spoofs that have been made of it.
If I now understand the distinction, (more…)
Today’s lesson is that no matter how you set your Facebook settings, someone else could reveal your membership in groups. Remember every day that anything you post in a social media space could eventually become public.
Say, for example, you are out-of-the-closet at college but your parents don’t know. You join a choir and the choir director announces your membership in a group whose very name announces your sexual orientation. The public announcement of your membership to all of your Facebook friends is the first thing your parents know of your previous secret.
That’s the very short version of the story in the Wall Street Journal – When the Most Personal Secrets Get Outed on Facebook.
You are not the customer
The Chronicle of Philanthropy has published their 2012 edition of Philanthropy 400, a list of the largest NPOs in terms of the amounts raised from private sources. The list, here, is behind a paywall. It was also in the e-mail version sent out over the weekend and will be in the paper copy.
An accompanying article discusses the GIK at a few more charities: Gifts of Medicine and Food Fuel Growth But Draw Regulatory Scrutiny
“How will this look on the front page of the newspaper?”
That is a helpful way to evaluate decisions.
When you are trying to figure out what’s the right thing to do, ponder for a moment how your decision will look if you read about it on the front page of your local newspaper.
If you are going to look really bad, then maybe, just maybe, you might be making a bad decision. I mentioned this in a post some time ago.
We are seeing this illustrated live with the issue of valuing deworming medicines. Mebendazole is in the news!
Newspaper test in action
Looking at the ‘overhead ratio’ is a lousy way to evaluate the effectiveness of a charity.
Once you understand that concept, you are left wondering what else to look at when considering whether to donate.
Dóchas Network offers six great questions to ask instead of looking at overhead. (more…)
Bill Zlatos, from the Pittsburgh Tribune-Review has a superb article out: Charities’ methods of valuing donations called into question.
If you are following this issue, you should go read the article.
Mr. Zlatos has been talking to a lot of people and has a lot of great comments. Here are some of the best news-making quotes. I’ll have more to say on these ideas over the next few days.
Reputational risk