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Training Log Archive: barb

In the 7 days ending Aug 29, 2016:

activity # timemileskm+m
  Bicycling2 1:22:00
  Running1 20
  Total3 1:22:20

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Monday Aug 29, 2016 #

Note

Got set up with MA to run CORIs.
Working on Workers Compensation and unemployment insurance; we have an employee number for MA UI.
Wednesday we'll walk through the other insurance options: auto, general liability, property, D&O, disability.
Still thinking about accounting systems. I had looked at some of the online systems, like Quickbooks, Xero and Aplos. Aplos is designed for non-profits and is based around fund accounting.
Each expense and income item will be tagged with account, program and funding source. We'll be able to calculate what portion of our net assets are restricted, and how.

The children's non-profit Variety has a nice approach to using UCOA along with program and funding source, and I'm drawing a lot from that.

Some things I like:

  1. Account, program and funding source are three orthogonal aspects of any expense or income item.
  2. You assign funding source periodically, like at the end of the month, based on what expenses meet the requirements of each restricted fund.
  3. Program (=activity=purpose) is important to track separately from funding source - you want to know what each program is actually costing, and it may be funded both by restricted and unrestricted funds.
  4. It may be convenient to pool some costs, and then assign them to programs periodically. Example: salary & related expenses -- at end of month, look at timesheet to figure out what programs to assign them to.
  5. Funds designated by the Board are tracked, as funding source; the difference to restricted funds is that the Board can decide to change the designation. But it is important to have an explicit decision to *remove* designated funds and have that documented.
  6. You want to be able to have a report that clearly shows how much of your assets are restricted vs unrestricted. Similarly, you want to be able to see how much of your income is restricted vs unrestricted. If you get a large donation for a specific purpose, you don't want to report your finances in a way that allows that donation to hide the fact that your core business functions are operating at a deficit, for example.


Avoiding the tail wagging the dog: if you document your spending, income, assets and liabilities clearly, then you can easily keep track of restrictions on funds and financial performance of different programs and so on. If you have accurate data, and the ability to create appropriate reports, you don't need to have separate bank accounts or adjust when your year is; you can create the reports to get the information you need to make good decisions.

Again:
First, you need to track accounts, for government reports and decision making.
Second, tracking by program/function helps for government reports (Program vs Management vs Fundraising) and for decision making.
Third, tracking funding source is necessary to honor the restrictions imposed by donors or granting agencies, as well as (in the case of board designated funds) to empower projects by giving them a feeling of control over their own budget -- they can have confidence that resources designated to them (including those generated by them, potentially) will be tracked and available across artificial time boundaries.

Keeping program and funding source as separate dimensions is important if you want to be able to clearly track and report on each dimension.

Note that net asset classifications (restricted, designated unrestricted, and undesignated unrestricted) can be calculated from the 3-dimensional revenue and expenditure data.

Nice white paper on FASB's statements about GAAP for nonprofits.
And the most important docs, Financial Accounting Standards 116 and 117.

From #116: "Since donor-imposed restrictions affect the types and levels of service a not-for-profit organization can provide, whether an organization has maintained certain classes of net assets may be more significant than whether it has maintained net assets in the aggregate. For example, if net assets were maintained in a period only because permanently restricted endowment contributions made up for a decline in unrestricted net assets, information focusing on the aggregate change might obscrue the fact that the organization had not maintained the part of its net assets that is fully avaialble to support services in the next period." That's actually quoted from FASB Concepts Statement #6.

Useful: Managing restricted funds

Note

Dave and I will get to see this kid on Sunday.

Running 20 [2]

Sunday Aug 28, 2016 #

Note

I am preparing for the Navigation Games board meeting on Wednesday night. I'll have all our financials pulled together, and we'll be figuring out how to work having an employee, and how to raise money. I have a draft of a crowdfunding campaign ready to go. We need $7000-$10,000 for programs this fall; hopefully that will lead to some revenue to keep things going in the spring.

We'll be talking about insurance, IRS and MA requirements for hiring an employee, accounting practices, and more. And of course we'll be prioritizing the programs that we'll tackle this fall.

Wednesday Aug 24, 2016 #

Bicycling 24:00 [3]

Tuesday Aug 23, 2016 #

Bicycling 58:00 [2]

Visited an accountant after work. Learning more about non-profit accounting.

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