# AICPAnfp The Bermuda Triangle: Accounting, Development and Program Services I guess I'll go sit and watch Pete and Bob talk now, but heyI do get a CPE hour American Institute of CPAs #AICPAnfp Speaker BiographyBob Mims Bob lives in Memphis with his wife and four children, coaches basketball, and has been involved in several mission trips to East Europe, where he taught Economics to University students. Bob has helped other nonprofits facilitate their strategic planning design. Other courses Bob has taught include Nonprofits and Reserves, Cost allocations and SOP 98-2, Fraud Basics and Detection (an 8-hour course to the Federal judiciary), Benchmarking Nonprofits, Personality Characteristics and Traits, Direct and Indirect Cost Rates, Nonprofit Sustainability, Strategic Planning, and The impact of Donor Intent: Walking through the Gray Areas of Accounting. Bob Mims is the controller and director of investments at Ducks Unlimited, Inc. In his role with DU, Bob serves on the Environmental Not-for-Profit Roundtable, the National Advisory Council of FASB, and is involved in the decisions related to the finances and strategic planning for the company. He is also the CFO of DUs sister organization, Wetlands America Trust. Mr. Mims previously served ten years for KPMG as a senior manager in the financial services field. Prior to his parole from public accounting, Bob was the primary recruiter and local office training coordinator for the Memphis, Tennessee and Jackson, Mississippi offices. Bob also was extensively involved in KPMG training, earning National Instructor of the Year honors on three occasions. He is currently involved in training for National Nonprofit AICPA courses and chairs the Not-for-Profit conference for the AICPA. American Institute of CPAs #AICPAnfp Expectations Grasp the challenges associated with three distinct areas of a not-for-profit organization Accounting Development Program Understand the solutions American Institute of CPAs #AICPAnfp Lets first look in the mirror of who we are? The glass is not half full (Development) The glass is not half empty (Program) Our view is that that glass is actually half empty, but there is a BIG hole in the bottom of the cup and we dont have the funds to fill that hole so we may as well just give up now. (Accounting) American Institute of CPAs #AICPAnfp Lets talk about the Triangle Accounting the money counters Program the money spenders Development the money makers American Institute of CPAs #AICPAnfp Developments statement of faith Im a magician Anything you can do, I can do better I can and will count the same money twice After counting the same money twice, I can and promise to count that same money a third and fourth time. I promise to switch jobs to another nonprofit after counting said money the third time. American Institute of CPAs #AICPAnfp Programs statement of faith My mission is more important than your job My mission is more important than your life I can and will spend what is really not there I realize that by having the most employees in our department that the loudest voice usually wins I promise to have a loud voice American Institute of CPAs #AICPAnfp Accountings statement of faith I promise to be Write. I will always question the amounts reported by Development and slash the budgets from Program I promise to confuse my board by counting for the endowments in three different net asset categories I can and will attend Accounting only type conferences where I can and will complain about Development and Program staff American Institute of CPAs #AICPAnfp Perception Issue How we view each other Development Program Accounting But remember we all have the same end goal in mind! American Institute of CPAs #AICPAnfp Favorite TV show Program Development Accounting American Institute of CPAs #AICPAnfp Some Examples American Institute of CPAs #AICPAnfp Definition of Insanity A workout program that I ordered but did not complete Repeating the same thing over and over again expecting different results Examples include: Diet plan with cookies and pizza Buying season tickets to Ole Miss games hoping for that national championship American Institute of CPAs #AICPAnfp Accounting Definition of Insanity A Capital Campaign American Institute of CPAs #AICPAnfp Campaign Challenges DevelopmentProgramAccounting Planned giftsCan spend itNo PledgesCan spend itNo Major giftsCan leverage themHow? American Institute of CPAs #AICPAnfp More Campaign Challenges DevelopmentProgramAccounting Does the Board believe that the amount raised will be spent? Does the Board know that the Campaign began a few years ago (silent phase)? Is there a program expectation of spending more than business as usual? American Institute of CPAs #AICPAnfp Campaign Solutions Charged with breaking out the revenue expectations to specific amounts and categories Development Program Map out the expected expenses over the term of the campaign Accounting Make sure that numbers 1 and 2 are not less than 0 Map out the nets and communicate what will be left over American Institute of CPAs #AICPAnfp Set a campaign goal for your NET Surplus target of $12 million in reserves after five years (or is it 6)? BudgetPlan FY15FY16FY17FY18FY19FY20 Operational surplus 2,000 American Institute of CPAs #AICPAnfp Mapping out your Campaign revenues that are cash BudgetPlan FY15FY16FY17FY18FY19FY20 Events 40,000 41,200 42,436 43,709 45,020 46,371 Major gifts 25,000 25,750 26,523 27,318 28,138 28,982 Royalties 3,000 3,090 3,183 3,278 3,377 3,478 Direct Mail - net 3,000 3,090 3,183 3,278 3,377 3,478 Planned gift maturities 1,500 1,545 1,591 1,639 1,688 1,739 Totals 72,500 74,675 76,915 79,223 81,599 84,047 American Institute of CPAs #AICPAnfp Load in your other revenue and expenses BudgetPlan RevenueFY15FY16FY17FY18FY19FY20 Total Philanthropy 72,500 74,675 76,915 79,223 81,599 84,047 Total Govt/Contractual 80,000 Investment income 1,000 Inkind 5,000 Total revenue 158, , , , , ,047 Expenses Program 125, , , , , ,438 Fundraising 23,475 23,801 24,137 24,483 24,840 25,207 Admin 7,825 7,934 8,046 8,161 8,280 8,402 Total Expense 156, , , , , ,047 Operational surplus 2,000 Nonoperational surplus 1,000 American Institute of CPAs #AICPAnfp Favorite Movie Program Development Accounting American Institute of CPAs #AICPAnfp What about grant income problems? This position will be fully funded by the grant All money as revenue is green and Im offended to hear otherwise We are leaving money on the table by not accepting this grant What happens to these positions and programs when the grant ends? American Institute of CPAs #AICPAnfp Are there solutions to the program/grant income issue? NO American Institute of CPAs #AICPAnfp Can there be a solution here? Charged with understanding and raising philanthropy that pays for fundraising and costs the grant does not cover Development Program Keep Development and Accounting in the loop and understand indirect and other costs of program Accounting Do the math Help with rules on restricted funds paying for overhead American Institute of CPAs #AICPAnfp Favorite reality show Program Development Accounting American Institute of CPAs #AICPAnfp Major Gift Challenges DevelopmentProgramAccounting Restricted to its use Does not pay for Fundraising Multi-year payment schedule Bequests and other planned gifts Revocable vs. Irrevocable American Institute of CPAs #AICPAnfp Major Gift Solutions DevelopmentProgramAccounting Gift acceptance policy Charge for use of restricted gifts (tax on overhead) Fund before you build policy Gift counting policy American Institute of CPAs #AICPAnfp Favorite Superhero Program Development Accounting Rocky Ironman Frodo Baggins American Institute of CPAs #AICPAnfp Unusual Contribution Challenges DevelopmentProgramAccounting We take all gifts! A new donor! Think of how this could benefit our clients! Lets hire some more staff to work with this. What are the risks and costs associated with this? Not ever gift is a good gift. American Institute of CPAs #AICPAnfp A few examples of unusual contributions Board members rental property that he couldnt sell for the past 2 years. Empty building (which is sitting on top of the old tanks from a gas station that used to be on this property) Fur coats donated to a domestic violence shelter Oil, gas, and/or mineral rights Confiscated unlicensed athletic apparel Beautiful artwork when the artist is a major donor Toilet paper and 22 hand-knitted scarves Interesting pieces of used clothing American Institute of CPAs #AICPAnfp Unusual Contribution Solutions DevelopmentProgramAccounting Gift acceptance policy Approval process for non-cash contributions Communication Education about organizational risks American Institute of CPAs #AICPAnfp Bottom line is: Revenue is boiled down to four types Philanthropy Contracted/Government grants Investment income In kind American Institute of CPAs #AICPAnfp Favorite Disney movie Program Development Accounting American Institute of CPAs #AICPAnfp The Annual Budgeting Process - Challenges DevelopmentProgramAccounting Just plug the budget gap with new gifts! We need more donor relations money All special events make money, right? We need more. Think of the kids who need our services. Development will raise it, and the accounting department is fine with just one employee. No you cant use all of your leftover budget to buy extra supplies on the last day of the fiscal year! Please be realistic. Im not a magician. American Institute of CPAs #AICPAnfp Budgeting Process - Solutions Education-Ask Development and Program to come to one of your cult seminars How many accountants does it take to change a lightbulb? Setting up budget parameters (with no numbers) American Institute of CPAs #AICPAnfp Favorite Actor Program Development Accounting Helen Mirren Zach Galifinakas Bob Newhart American Institute of CPAs #AICPAnfp We hope that our session will help you feel more like this: Instead of this: American Institute of CPAs #AICPAnfp 37 QUESTIONS? Bob Mims, CPA Ducks Unlimited