Staff Burnout - Healing Our Sector's Secret Sickness

By Kedren Crosby, Principal, Crosby Consulting 

In the nonprofit sector, we're encouraged to punch the time clock with our hearts. Of course, there is rarely a time clock, so often our hearts work around the clock in frenzied pursuit of our agency mission. We love our work but can become consumed by its bottomlessness. Perspective begins to wane, personal lives suffer, balance is lost and so goes the denouement from zealot to burnout.

IMBALANCE IS INTRINSIC IN OUR SECTOR'S DNA. 

The nonprofit movement in America was birthed out of the same religious fervor which esteems martyrs and saints. In the 1800s, Tocqueville internationally esteemed our uniquely American ability to self-sacrifice and organize to create a more civil society. Our roots are steeped in self-denial for the good of the cause. We often throw our personal lives 'under the bus' for the betterment of the organization. Honestly, is it any wonder people burn out?

IMBALANCE AS A SIGN OF THE TIMES. 

Technology has inextricably enmeshed our work and personal lives. We find it difficult to compartmentalize when one piece of our world goes awry. Operating in this fiscally austere economy is also extraordinarily discouraging with the reality of budget cuts, program eliminations and lay-offs. If the wrong stars are aligned for long enough, one begins to relate to Sisyphus, the character in Greek mythology who was destined to push a massive boulder up a hill only for it to roll back down again and again - for all eternity. Ugh!

So.. what do you do about it? Read on....

Don’t Lose Your Deduction on Technicalities

By Steve Stucky, CPA, Partner at Sikich LLP

There is a lesson to be learned from David and Veronda Durden. The couple was denied a $25,000+ deduction on their tax return for a charitable donation they made to their church because of a simple technicality. The IRS disallowed the deduction, increasing their tax liability by thousands of dollars because the proof they had confirming the donation didn’t meet all of the IRS’ strict requirements. The most shocking part is the Tax Court recently ruled in favor of the IRS, leaving no recourse for the generous couple.

The Durdens made the contributions over the course of one year by writing checks—all more than $250 each. At the end of the year, the church sent them an annualized summary of the donations, which the Durdens kept as proof. The IRS argued that the annualized summary failed to meet the four requirements needed for proof of a cash donation more than $250 and therefore was not valid. The four requirements include:

1. It must be in written form and contemporaneous, meaning you must receive the proof by the tax return’s due date or by the date you actually file the tax return—whichever is earlier.
2. The proof must include the amount donated.
3. The proof must state whether the recipient organization provided any goods or services in consideration for the donation.
4. If any goods or services were received, the proof must include a good faith estimate of their value. If the donors only received “intangible religious benefits,” then it must explicitly state that.

The summary that the Durdens received did not meet the fourth requirement. They argued that they “substantively” complied and that it was just a technicality that the proper language wasn’t on the annualized summary. The IRS and the Tax Court did not care. Don’t expect the IRS to be reasonable when it comes to getting more of your money, whether it comes to your charitable donations or just general business deductions. Take every precaution and follow every regulation to the letter. The church already qualifies as a nonprofit charity, and almost all church members regularly contribute their monies through the collection plate, which seems to meet the “intangible religious benefit.” This seems like a good chance for reversal, but that takes time, effort and money to challenge the IRS. A simple solution is for all nonprofits, including churches, to include this additional language on summaries on a regular basis.

FMI, contact By Steven K. Stucky, CPA; Partner, Sikich LLP. Steven can be reached at 317-842-4466 sstucky@sikich.com.

Planned Giving Group of Indiana

We are very excited to welcome the Planned Giving Group of Indiana(PGGI) as a sponsor. Beginning with today’s edition, PGGI will be providing weekly information and updates to keep you better informed about the latest in planned giving and fund development. PGGI is a great complement to both your professional development and networks and we encourage you to explore membership in both PGGI and AFP.

I want to quickly introduce you to a few key components of the PGGI website:

- Board Member List – see who regards PGGI as important to their organizations and careers
- GiftLaw Pro - provides quick information to some of your most frequently asked questions
- Events Calendar - keeps you up to date with the fall speaker schedule
- Washington News – learn how key legislation could impact your organization
- Membership

Don’t miss the Sept 5 kick-off for the new year of programming. Come as a visitor or find a current member and come along for free. Go to their website www.plannedgivingindiana.org to register. Members $25, non members, $40.

Seminar: Improving the Fiscal Health of Your Nonprofit

Join the Sikich nonprofit team and guest speakers next Wed, Aug 7 – 8:30am-11:30am, as they provide insights on maintaining and enhancing the financial health of your organization. Pam Velo of Velo Philanthropic Advising will talk about her years of work in assisting major donors to connect with their philanthropic goals and how your organization can create those relationships. Bernstein Global Wealth Management will discuss current trends in investment management and the Sikich team will offer ideas to navigate your increasingly difficult financial decisions. Don’t miss this great opportunity for Executive Leadership, CFO/Controller, Development staff, Finance Committee and other board members. Register here.

Whether you represent a professional association, social service agency or charity, be confident that your non-profit organization will stay financially secure while keeping the best interests of your communities in mind by discussing your unique situation with a Sikich expert. You’ll know you’re getting the best and most customized accounting, advisory, technology and managed services from someone who is involved in community activities and has assumed leadership positions on non-profit boards. To learn more about Sikich Nonprofit Services, contact Steve Stucky at: SStucky@sikich.com or 317.842.4466

“...Run More Like a Business?”

Here’s a chance with Bryan Orander, Charitable Advisors

I don’t usually respond well when I hear people make simplistic statements like “nonprofits should run more like businesses”. When I ask for clarity, they add definition around setting aggressive goals; executing effective marketing strategies; building a brand; recruiting the best people; and generally operating in an intentional, well-organized manner that consistently generates a profit. So they expect that two person nonprofit to operate like Eli Lilly & Co? From a practical standpoint, my perception would be that most nonprofits are run as well as or better than small businesses of comparable size.

That being said, here is an affordable opportunity for a member of your nonprofit staff team to join me and a cohort of small business owners to reflect on where your organization is headed and what you need to do to improve your impact, financial and staff management, and operations. Each series is limited to 15 attendees and only a few slots are open to nonprofits. The discussion will not be about nonprofit boards, restricted revenue, or foundation relations but it will be about all of the things that nonprofits share in common with businesses – reflection and planning for profitability and sustainability; identifying your purpose and target audiences; researching your assumptions; identifying new products and services; hiring, organizing and leading your team, developing processes that let you work more effectively and train new staff more easily; cash flow management, financial budgeting and forecasting, etc.

Using a proven curriculum from Kauffman Foundation, this program is still in its first year with Business Ownership Initiative locally so they are offering the dramatically discounted rate of only $300 for the 10 week series. For more information.

Register for the next Series, beginning the morning of Friday, September 13 at: http://gv091313.eventbrite.com Bryan Orander, President of Charitable Advisors and Publisher of the Not-for-Profit News in Indianapolis and Cincinnati will be the lead facilitator for this session. www.CharitableAdvisors.com

If you have an idea for a new nonprofit, social enterprise, or business, they also have a 10 week series to help you flesh that out and decide if you have what it takes to be an entrepreneur, also only $300 this cycle. Limited nonprofit slots are available. For more information.

Register for the next Series, beginning the evening of September 11 at: http://nv091113.eventbrite.com Denise Herd, President of Herd Strategies will be the lead facilitator for this session. http://herdstrategies.com

How Financial Policies Sustain and Strengthen Your Organization

(Jim Simpson - Financial Technologies & and Management)

The board and finance committee responsibility includes ensuring that financial policies and procedures exist and are followed by the organization. Staff management is often delegated the responsibility to develop and maintain financial policies and procedures with limited direction or guidance from the board and finance committee. The board and finance committee can be consumed by more immediate financial matters like budgets, audits, financial statements, and cash flow.

Financial Policies and Procedures help sustain and strengthen your organization by defining:

• How the accounting function is performed including transaction processing like accounts payable, account receivable, payroll, journal entries, and grants and program management?
• What authorization and custody controls exist to reduce financial risks and protect organization?
• What environment and culture exist for your organization, how is authority defined, and what external influences exist?
• How does your accounting system help you implement your financial policies and procedures?
• What segregation of duties and controls exist to detect or prevent accidental or intentional mistakes?
• What training do you provide to ensure competence and knowledge of accounting staff?

It is important that you compare your major transaction processing (A/P, A/R, Payroll, etc) transactions to best practices and evaluate costs versus benefits for each transaction process. If you have not reviewed and improved your financial policies and procedures recently then an experienced outside perspective, like FTM's, can help. An organization with good financial policies and procedures benefits from operating efficiencies, clear expectations, financial accountability, and better training.

More Information - At the end of this article is more detail about how financial policies help sustain and strengthen your organization. Read it at:http://www.ftmllc.com/Library-articles.htm

FTMs next nonprofit webinar will provide more details and will be held on Thursday, July 25th at 12:30 EST. You can register by emailing us atregister@ftmllc.com or calling us at 317-819-0780.

Financial Technologies & Management (FTM) has been a supporter of the Not-for-Profit News for eight years. They are a full service CPA firm providing bookkeeping, accounting, controller, CFO Advisor, and Software Advisor services to over 350 nonprofit and religious organizations since 1999. Contact them at 317.819.0780 or info@ftmllc.com to see how they can help your nonprofit organization.

The Overhead Myth

A letter to Donors from BBB, Guidestar, and Charity Navigators

To the Donors of America:

We write to correct a misconception about what matters when deciding which charity to support. The percent of charity expenses that go to administrative and fundraising costs-commonly referred to as "overhead"-is a poor measure of a charity's performance.

We ask you to pay attention to other factors of nonprofit performance: transparency, governance, leadership, and results. For years, each of our organizations has been working to increase the depth and breadth of the information we provide to donors in these areas so as to provide a much fuller picture of a charity's performance.

That is not to say that overhead has no role in ensuring charity accountability. At the extremes the overhead ratio can offer insight: it can be a valid data point for rooting out fraud and poor financial management. In most cases, however, focusing on overhead without considering other critical dimensions of a charity's financial and organizational performance does more damage than good.

In fact, many charities should spend more on overhead. Overhead costs include important investments charities make to improve their work: investments in training, planning, evaluation, and internal systems- as well as their efforts to raise money so they can operate their programs. When we focus solely or predominantly on overhead, we can create what the Stanford Social Innovation Review has called "The Nonprofit Starvation Cycle." We starve charities of the freedom they need to best serve the people and communities they are trying to serve.

Read the full letter here.http://www.bbb.org/us/storage/113/Documents/GS_OverheadMyth_Ltr_ONLINE.pdf