Why Your Financial Systems Matter

Thanks to the Independent Sector for the heads-up: From the Los Angeles Times comes a story about a local chapter of the Service Employees International Union. This story has everything -- everything that can give the public a reason to think nonprofits are poorly run or are run solely as a scam to make money for the founders: undisclosed payments made to businesses owned by family members, poor financial record keeping, lavish spending and possible misstatements of fundraising expenses.

Even if all the issues mentioned in the story are found to be justified, it is still almost a perfect example of everything you should not do. And just because something is legal doesn't mean it is ethical. Taking the time to think, "How will this look?" to the media, regulators, other nonprofits and especially the community you serve can only help your decision making, financial or otherwise. Having a strong financial system in place and people knowledgeable about those systems, as well as other nonprofit accountability measures, are key for all organizations regardless of mission or size.

Nonprofit Deregulation?

On the Independent Sector's website is a really good article by Clara Miller, a leader in the sector who I think makes a lot of sense and has written extensively about nonprofit financial issues.

In this piece she once again lays out the complex world of nonprofit capital management. Things that we as nonprofit finance professionals take for granted that would send our for-profit counterparts into confused apoplexy. She posits that in our efforts to do good we may have let a patchwork of rules and regulations from many different sources cover us so that our capacity to meet our missions may seriously limited if not in jeopardy.

Read the article, or others by her, and tell us what you think about what she has to say and the issues she brings up in the comments section below.

Accountability and Transparency, Part 2

CAN also has an Ensuring Nonprofit Integrity Initiative, what we consider a "thoughtful response to the nationwide increase of nonprofit watchdogging and accelerating calls for accountability by donors, policy makers, and the general public." Please do check it out, there are tool kits and workshops to help you along the way.

Plus you should stop by and check out our new website! Very new and improved...

Accountability and Transparency, Part 1

Guidestar has another good piece on accountability and transparency. The top piece of information people listed as how they show they are accountable are the audited financial statements. All most all the things people listed come from the admin and finance side and to me show once again how important these roles are in any size nonprofit.

It also reminds me to remind you that if you have not done so please do go on to GuideStar.org and find your 990. If you have filed one they have it listed. But the nice folks there allow us to add to the information up there, describe our programs in more detail, add accomplishments and goals and even explain things if you think your organizations numbers are a bit off. As one of the first place someone may go to research your organization it behooves us all to keep our info current.

Tid Bit On Nonprofit Compensation

Reminiscent of the Getty's troubles: Have you heard the news about the head of the Smithsonian Institution?

"The Senate passed a non-binding amendment to the budget resolution that would freeze a $17-million increase for the Smithsonian until it undergoes a series of ethics and accountability reforms, including requirements that no Smithsonian employee be paid more than the President of the United States, and that all travel expenditures conform with federal government guidelines.

While the amendment may be dropped in the final version, it provides an indication of some lawmakers’ thinking on nonprofit executives’ compensation."

Again, thanks Independent Sector

CAN in the news

MercuryNews.com | 09/12/2006 | Local non-profits need fiscal oversight after peers' crises

An op-ed piece promoting and encouraging adequate fiscal oversite by nonprofit boards.