MESSAGE
| DATE | 2003-02-23 |
| FROM | jam@rm-cpa.com
|
| SUBJECT | Re: [hangout] Non-Profit books
|
FYI- As a non-profit we are only subject to audits in New York (atty gen)
when our donations/contributions exceed $150,000. We are required to file with a
"reviewed" financial report with the state if our contributions exceed
$75,000. We are required to file tax returns and financial reports when
our revenues exceed $25,000. We simply need to keep our books in
accordance with generally accepted accounting principles. Non-profits tend
to keep their books on a fund basis, or by program (functional) inorder to
report to funders.
Joe
On Sun, 23 Feb 2003, Ruben I Safir wrote:
>
> I'm happy to say that NYLXS hasn't functioned like this
> at all. Our organization has a long record of accomplishements,
> mostly done without much economic benifit to members.
>
> In fact, our members have been loosing money in order to
> keep our programs afloat. This was one of the reasons for
> NYLXS having an emergency meeting. We need to put ourselves
> in a position to pay our people for much of the work in
> preparing and organizing our organizational efforts.
>
> Marco sent the link for that organization to teach us
> how to raise money. Perhaps now is the time for people
> to step forward and aprach them. Any other fund raising
> tricks we can learn would be much apreciated, and the sooner
> the better.
>
>
>
>
> Ruben
>
> On 2003.02.23 19:05 Dave Williams wrote:
> >
> > You should repost this to Hangout.
> >
> > Ruben
> >
> > On 2003.02.21 19:21 Dave Williams wrote:
> > > Hi Ruben -
> > >
> > > I thought I would share my memories of working for a non-profit
> > > organization, just to give you some idea of what you might be able to
> > > expect. For the record, I believe there is a difference between
> > > "non-profit" and "not-for-profit" -- they are classified under a
> > > different code number and mean different things, unless I'm mistaken.
> > >
> > > Regardless, a long time ago I worked as the office manager for a small
> > > non-profit office in central Virginia, the National Kidney Foundation of
> > > Virginia. What I observed was that they were authorized to use a form
> > > of bookkeeping known as "functionalized accounting". By this it seems
> > > that they could describe their assets and liabilities based upon the
> > > "function" they performed -- for example, "Patient Services" or
> > > "Community Education". Many of these categories are total abstractions,
> > > and although the organization was required to hire an auditor every so
> > > often, no CPA who examined the books ever complained about the use of
> > > these categories or examined their application closely.
> > >
> > > I bring this up because the NKF-VA was doing virtually nothing to help
> > > dialysis patients, and the majority of their expenses were actually
> > > re-classified employee bonuses and benefits. All perfectly legal,
> > > apparently. I could have an expensive lunch with someone and just talk
> > > about helping Kidney patients and that was good enough for the
> > > accountants. This is nothing new, of course.
> > >
> > > What the NKF-VA actually did was provide information (little pamphlets)
> > > and help connect patients to the different dialysis centers. Every now
> > > and then they would give a small grant to a local center, amidst much
> > > fanfare and local publicity. They also had a program for issuing small
> > > grants to patients in need, such as for car repairs to help them get to
> > > a clinic. I'm talking really small here, like around $300 tops.
> > >
> > > How did they get money in the first place? Well, as an extension of a
> > > national organization (a franchise, really) they had obligations to the
> > > main organization and would get some funds from them occasionally. And
> > > of course as a non-profit any donations made to them were tax
> > > deductible. They had an office in a small office-park, and they had all
> > > they supplies they needed (stationary, postage, etc.). They had a
> > > public relations director who made a nice salary, an office manager who
> > > did okay (me), a development director who lived comfortably, and a
> > > director who really made a nice living out of it. They had a board of
> > > directors, many of whom were businessmen involved in the local banking
> > > industry (Richmond has a Federal Reserve, and that's about all it has
> > > besides tobacco, aluminum and Chap-Stick).
> > >
> > > Donations from individuals didn't amount to much; it's the local
> > > businesses that really pump in the capital. To do this several annual
> > > high-profile events were held, such as a "chocolate festival" at a local
> > > mall that got all over the local news, or an amateur golf-tournament
> > > sponsored by Cadillac. Everyone who participated in these events could
> > > write off their expenses, and all money made beyond the basic expenses
> > > went to the organization. The board members gained prestige by being
> > > behind the high-profile events, and possibly other advantages I wasn't
> > > aware of.
> > >
> > > But the real cash cow was something else entirely, and it's a program
> > > used by several health-related non-profits (such as the American Cancer
> > > Society). It's the "Donate your old/totaled car program", the one where
> > > you can call a number and a tow truck driver will cart off your old
> > > car. Then the non-profit's representative at the parts yard will send
> > > you a form acknowledging the donation. The non-profit will send you a
> > > quote from a recent Kelly Blue Book for your vehicle, but they leave the
> > > amount you claim for the value entirely up to you. When you file your
> > > taxes you can say that your old Nova was worth $3000, and deduct that if
> > > it helps you.
> > >
> > > The parts yard sells the car for parts, until nothing is left and they
> > > sell the cubed remains for scrap. They make a nice profit off of the
> > > parts, and occasionally they get a nice old car in decent shape. For
> > > that they have an annual donated car auction. The parts yard keeps a
> > > percentage of the sales, and keeps track of all the donated cars in a
> > > database. They cut a check each month to the non-profit, based on their
> > > part of that month's sales. In a large, well-run program this is where
> > > the serious change comes in. The IRS can't hold a person to the amount
> > > they claim for the donation because odds are the car is still sitting in
> > > the yard being cannibalized.
> > >
> > > Between the fast-and-loose nature of functionalized accounting and the
> > > legal scams for financing these organizations, I developed a bad
> > > impression of charities. Especially when you consider how little they
> > > do to actually help the cause the represent. A small amount of money
> > > was earmarked for research donations each year, but it wouldn't make a
> > > dent in the fight against kidney failure.
> > >
> > > Anyway, I hope that's informative. Being a non-profit can be a license
> > > to print money if you do it correctly. In central Virginia a small
> > > handful of dialysis patients would get the occasional bit of pocket
> > > change, while the director of the NKF lived well, got a lot of local
> > > press, and had a lot of nice dinners.
> > >
> > > - Dave
> >
> > ____________________________
> > NYLXS: New Yorker Free Software Users Scene
> > Fair Use -
> > because it's either fair use or useless....
> > NYLXS is a trademark of NYLXS, Inc
> >
> --
> __________________________
> Brooklyn Linux Solutions
> __________________________
> DRM is THEFT - We are the STAKEHOLDERS http://fairuse.nylxs.com
>
> http://www.mrbrklyn.com - Consulting
> http://www.inns.net <-- Happy Clients
> http://www.nylxs.com - Leadership Development in Free Software
> http://www2.mrbrklyn.com/resources - Unpublished Archive or stories and articles from around the net
> http://www2.mrbrklyn.com/downtown.html - See the New Downtown Brooklyn....
>
> 1-718-382-0585
> ____________________________
> NYLXS: New Yorker Free Software Users Scene
> Fair Use -
> because it's either fair use or useless....
> NYLXS is a trademark of NYLXS, Inc
>
____________________________
NYLXS: New Yorker Free Software Users Scene
Fair Use -
because it's either fair use or useless....
NYLXS is a trademark of NYLXS, Inc
|
|
