Skip to main content
Monthly Archives

August 2017

Aug 21

Nine best practices to steer nonprofit technology

By Sponsor Insight

By Robert Ramsay, CPA, CISA, CITP, CCSFP, Barnes Dennig

Working with nonprofit leaders on a regular basis, the questions I get from the executive directors and C-suite personnel typically revolve around, “How deep in the details do I need to be for my organization?”

While the answer to this question varies greatly, there are a few tips I provide to help leaders sort this out. The following is a brief overview of current key topics, and offers guidelines for steering technology dealing with security, staffing, outsourcing, strategic planning, cloud computing, online banking and finding board members from the technology sector.

 

[content_box box_type=”normal”]

Barnes Dennig is offering a free educational seminar covering these topics and more on Sept.13th.

Ford Salon at Robertson Hall, Butler University (4600 Sunset Ave.). Registration and breakfast at 7:30 a.m. , presentation and discussion at 8 to 10 a.m.

Let us know if you are interested in attending and we’ll send you more information.

[/content_box]

 

Ransomware:

Data security may be the most difficult and fastest changing element of technology to keep up with today (There are many interesting discussions about the “singularity,” and when robots will take over, but practically speaking, data security is the issue of the day). The most common data security risk is Ransomware, the malware that encrypts your information and demands a ransom to return your data.

By the end of 2017, ransomware is projected to exceed $1 billion per year according the FBI. Executives must make sure that everything (and I mean everything of significance) is backed up and easily retrieved. They also must ensure that all employees are trained to “think before they click.” As backup and retrieval improves and employees reduce the number of times they accidentally click on malware, Ransomware as we know it will diminish in volume and severity.

Online banking:

Online banking is a convenient way to move money. Unfortunately, this applies to the nefarious as well as the well-intentioned. Executives should challenge their finance teams and their bankers to demonstrate that segregation of duties exist to such an extent, that if one person’s account were hacked, this would still not allow the hacker to misdirect (and steal) electronic funds.

Network penetration testing:

Also called “white-hat hacking,” network penetration testing can help you know “What do we look like to a hacker?” This is becoming more and more routine, especially for entities that accept credit cards. Almost like an annual financial statement audit, having an annual data security audit can help make sure your controls are evolving as fast as the threats.

HIPAA compliance:

One set of standards that is growing rapidly in the nonprofit sector is HIPAA security requirements. These are a result of U.S. Federal laws that govern personal healthcare information (PHI). Originally just for healthcare providers, these laws have expanded to include all parties in the healthcare system that touch PHI. Because nonprofits want to improve client outcomes, tracking health information is becoming more ubiquitous. Many organizations are choosing to comply with HIPAA as a risk management decision, even if they may not be legally obligated to do so. This is often wise for marketing, as well as security purposes.

PCI compliance:

Similar to HIPAA, PCI is another set of data security standards becoming generally accepted in the nonprofit sector. These Payment Card Industry (PCI) Data Security Standards are more widely required and more precisely defined than the HIPAA requirements. They also offer a clear tier of difficulty that corresponds with the agency’s volume and complexity of processing. Leaders should insist that their finance and information systems teams are coordinating to meet and exceed these requirements on an ongoing basis.

Staffing /outsourcing:

Outsourcing is a fact of life in technology, but very few internal technology teams know enough to provide 100 percent of the security knowledge needed to keep you safe. However, every nonprofit needs to have someone in-house that fully understands your mission, your strategic plan and your current use of technology. If that person is good, then you can task them with deciding activities that are best performed in-house, and those best outsourced.

Strategic technology planning:

Starting at the board level, almost all nonprofits are familiar with strategic planning. These efforts provide guidance to management, and ensure priorities are clearly communicated. Similarly, strategic technology planning helps steer the technology team. When properly aligned, technology is most efficiently assisting the entire organization to meet its goals. The board should provide clear objectives, and allow management to decide how to meet them.

The cloud:

Internet-provided computing can save costs and provide flexibility to IT operations. It presents opportunities, and risks that must continuously be weighed against the opportunities and risks of NOT using the cloud. Because the environment changes rapidly and risk management can be very difficult, having a board member (or committee) from the technology sector can be very important. Ongoing communications between the board and management are a great way to navigate these challenges.

Finding board members from the technology sector:

This is typically not an easy task for the board chair or the personnel committee. When the benefits of diversity are mentioned, technology experience should be included on the list of needed skills. Fortunately, several organizations are earnestly working to assist boards wishing to connect with technology leaders. In your community, you may have any number of networking groups. The following are some of the largest with a national footprint: United Way’s BoardBank, VolunteerMatch.org, NTEN, and the NPower network. Regionally, there is a large variety of organizations that offer board member training and matching. They can range from your local YWCA to an arts consortium. The bottom line for these efforts is to be intentional about recruiting to fill this niche requirement on the board.

Robert J. Ramsay, CPA, CISA, CITP, CCSFP has performed consulting services for more than 20 years, helping organizations make more mission and strengthen their processes, with a particular focus on data security.  He is a member of the firm’s nonprofit client service team and has worked with organizations across the sector.  Prior to joining Barnes Dennig, he worked for PwC and TechBridge, a 501c3 consulting firm in Atlanta.

Barnes Dennig’s website provides additional information on these topics. Click here to learn more about our technology practice and the services for nonprofits like yours.

 

[content_box box_type=”normal”]

Event Description:

What Not-for-Profit Leadership Needs to Know about Technology and Cybersecurity

Wednesday, September 13th, 2017
Ford Salon at Robertson Hall, Butler University
4600 Sunset Avenue, Indianapolis, Indiana 46208

7:30 am – Registration and Breakfast
8:00 -10:00 am – Presentation & Discussion

You don’t have to look far to see the news stories: technology threats, security breaches and fraud are on the rise. Don’t miss this opportunity to learn about the current situation not-for-profit organizations are facing as we discuss the big picture on technology, cybersecurity and risks that impact not-for-profits every day.

Join Barnes Dennig Director and technology expert, Robert Ramsay, CPA, CISA (Certified Information Systems Auditor), CITP (Certified Information Technology Professional), as he leads an interactive discussion on what nonprofit leaders need to know about technology and cybersecurity. Attendees will gain useful knowledge on the following topics, and more:

  • How to protect your operations while doing business online, and where to look for risks
  • Cybersecurity threats that not-for-profits commonly face and what to do about them
  • How to fight technology fraud with HIPAA/PCI compliance
  • Email vulnerabilities and how they can impact online banking
  • Best practices for online treasury management

This event is presented free-of-charge, and attendees will be awarded 1.5 hours of CPE credit. Register Here>>

 

[/content_box]

 

Aug 21

Leaders: Do you know what is on your organization’s horizon?

By Leadership, Sponsor Insight

By Sara M. Johnson, FACHE Director, Executive Education,IU School of Public and Environmental Affairs at IUPUI

While relaxing on a recent cruise to Cuba, I started thinking about leadership (I know…I can’t help it). Ever an observer and student of leadership and organizational culture I was struck by lessons that can be learned on both land and sea.

As we left the port on the cruise ship, I positioned myself on the top deck to watch our departure. As we worked our way to the Skyway Bridge at the edge of Tampa Bay, I noticed the ship turning subtly left and right within a path of lighted buoys. Slowly, the ship would veer left, then right, threading its way through the Bay as we headed out to sea. There was great attention to direction and the required turns that led us safely out to the Gulf. The narrow passage under the bridge also required a precise positioning by the captain in order to prevent the cruise ship from hitting the bridge supports. This seemed a strategic process to ensure the safety of the ship and its passengers. Though it may have been something the captain did all the time, it was strategic, subtle and purposeful. I doubt I would have known it was happening had I not been on the deck observing his path.

On land, I mindlessly travel the same route to work most of the time. I know where the potholes are, the lane changes, and the bottlenecks. I know the best time of day to leave the house to avoid the most traffic. It is easy to drive through traffic without really thinking about what I am doing. Some days I arrive at work, hardly remembering the trip.

In the classic book, “Leadership on the Line,” by Ron Heifetz and Marty Linsky, they talk about the “view from the balcony.” Like the view from the ship’s deck, leaders must occasionally step back, take a look out over the organization, and observe the big picture and the horizon. It is easy to get comfortable and lose sight of what is ahead and the signs along the way.

So, in my relaxed state on vacation, it occurred to me how dangerous it may be to lead the way I drive versus the way the captain navigated the water. Do I need to “get on the balcony” or “on the deck” to determine the best path for the future success of my team and organization? Like the buoys, should I be paying more attention to the signals from staff and other stakeholders?

In times of great change, leaders need to build organizational confidence. I suggest it is also good for leaders to do this for themselves occasionally to take note of their own development, reaffirm their values and the direction they are leading their team or organization.

Making an effort to be intentional in our leadership, “getting on the deck” and strategically looking to the horizon as we observe the signals that should guide us daily. Not only will we feel more confident but those who follow will feel more confident, too.

Sara Johnson is clinical assistant professor for the IU School of Public and Environmental Affairs and director of IU Executive Education. Johnson teaches graduate and executive education courses. She is a fellow of the American College of Healthcare Executives (FACHE). As director of Indiana University Executive Education, Johnson leads a team of over 40 faculty and staff.

Aug 15

Ball Brothers Foundation: Emphasizing family and community

By Feature

By Lynn Sygiel, editor, Charitable Advisors

Efficient, flexible and patient.

These three adjectives guide the funding decisions of the Muncie-based Ball Brothers Foundation, according to Program Officer Jenna Wachtmann.

Both Wachtmann and Senior Program Officer Rich Spisak, who came to the foundation just over a decade ago as its first full-time officer, took time recently to share the vision, innovations and unique focuses of the foundation, which at age 90, is among the earliest established foundations in the country.

“Part of the role of this foundation is it is able to provide efficient, flexible and patient capital. I think patient capital is a really good term for the work that we do. We can be patient and see things through,” Wachtmann said.

Patience shows up in current projects, such as improving the area around Kitselman Trail Head, which has been part of the foundation’s vision for 20 years.

“We have just been slowly chipping away at projects in that geographic area,” said Wachtmann, who joined the foundation three years ago. She said key to committing to a project for the long run is that the foundation’s endowment is set up as a perpetual, not sunset foundation.

In the U.S., there are over 42,000 family foundations with assets of more than $400 billion, according to Foundation Source, a service provider that helps families become more efficient philanthropists. In the past, family foundations rarely thought about an end to family’s giving, assuming they would exist in perpetuity from generation to generation. One reason some foundations sunset is concern that over time there might be a shift from the original donors’ intent. There are other reasons, too, like children not having an interest in the foundation or assets dwindling.

That, however, is not the case for the Ball Brothers Foundation. The foundation’s first strategic plan was developed a little over a decade ago. During those strategic planning sessions, lengthy discussions led to the decision that the family would continue to be involved in leadership roles. As a result, it became a high priority to cultivate that next generation of leaders.

Family member Michael Justin (Jud) Fisher is the foundation’s president. He is a Michigan native, a graduate of the Indiana University Lilly Family School of Philanthropy, and joined the Ball Brothers Foundation in 2003 after a banking career. The board is currently made up of third and fourth generation family members. Of the 13 board members, only four are not family members. Spread across the country are well over 200 descendants.

The foundation’s associate directors’ program helps educate the next generation of leaders. While the program was started before both full-time program officers joined the staff, they have helped formalize it. Currently six family members who live outside of the state take part.

The six come to Muncie three times a year at their own expense to learn about the community and the foundation’s grantees. Site visits have become part of their experience.

“They’re seeing exactly where our grants are going. The last time they were here, we took a bus tour. We put our board members, associate directors, and several community leaders on a bus and drove for two and a half hours around the city, pointing out all the various projects that we’ve talked about for a long time. They hadn’t always seen the previously funded projects or how they connect to one another. Those are valuable learning opportunities. So that gets to the heart of the innovation — as new proposals come to light, our board can make great decisions because they’ve seen in person what is being talked about,” Wachtmann said.

Not only have family members become aware of how a foundation operates prior to possible service, but they also have become ambassadors to the rest of the family and their communities. While not guaranteed a spot on the board, associate directors are guaranteed the opportunity to learn how the foundation operates.

“They’re learning skills that they’re taking back to Denver or to New York City, so they’re involved philanthropically in their own community in ways that benefit them, too,” said Wachtmann.

Donor intent is vitally important and talked about regularly. The perpetual mission — to continue to improve quality of life — has always been at the forefront, according to both program officers.

“The board honors that because these were the family members who came before them. They’ve made the choice to continue to honor that donor intent out of respect for the legacy, but also because the need is clearly still here. We are set up so that we can always serve the needs of the community,” said Wachtmann.

One thing that has changed in recent years is the foundation’s visibility in the community.

“We’re much more transparent than we ever have been,” said Spisak. In the last 10 to 15 years, interactions with nonprofits and ways of doing business have changed. During this period, the foundation began to produce annual reports, and has held annual receptions for foundation grantees.

Wachtmann believes that not having a regular annual report was rooted in the family not wanting to draw a lot of attention to its giving. “But I think that there was a realization that the foundation could have a greater impact by telling its own story, and by telling the stories of its grantees. This, coupled with studies that showed that people just didn’t understand what foundations did, resulted in more of a drive to tell BBF’s story.” Ball family members, too, receive the annual report whether or not they are directly involved.

The decision to have some board members be community leaders who know the area was also intentional. The Ball brothers lived, worked and made their lives in Muncie, and they were dedicated to improving the quality of life here. Those board members who live locally can help guide the conversations to priority community needs.

“Our charter restricts us to give only in the state of Indiana. Over time, it has always been that the majority of money has stayed in this local community and that has been the underlying belief of the family throughout the years,” said Spisak. He said typically, 90 percent of the foundation’s money stays in Muncie/Delaware County with only a small percentage given statewide.

Another program to increase transparency was started over a decade ago. An annual fellow’s program is designed to help local nonprofits understand from the inside, how the foundation works.

Two nonprofit directors are selected to participate for nine months. Often they are from very different organizations. At the onset, each receives $7,500, and later in their tenures, another $7,500 to work on individual projects. In addition, fellows receive money to attend a conference of their choice.

Together with foundation staff, they read and discuss several books and articles about foundations and management, like Jim Collin’s book, “Good to Great,” and Joel Fleishman’s book, “The Foundation: A Great American Secret: How Private Wealth is Changing the World.” In the summer, they visit the Foellinger Foundation to see how another foundation functions.

Spisak said they have gotten great feedback about the program. The program was born out of conversations with the Fort-Wayne-based Foellinger Foundation that included questions such as: How do we make sure that nonprofit organizations understand what a foundation is? How do we make nonprofits more comfortable with foundations? And at the same time, how do we learn more about what’s it really like to be in the shoes of a nonprofit executive?

To date, more than 20 local nonprofit leaders have completed fellowships. These fellows have also served as focus groups for the foundation staff helping simplify the grant process and offering input on the best format for the foundation’s annual report. The relationships have provided staff with candid insights.

According to Wachtmann, nonprofit ownership is critical. In recent years, the foundation has made proactive grants, inviting nonprofits to address a problem in the community and come up with a proposal. The foundation is not prescriptive with these RFPs, instead relying on its grantees to be the experts on knowing what’s best for their nonprofits and their communities.

Annually the Ball Brothers Foundation provides 40 to 50 Rapid Grants capped at $5,000. The beauty is the response time — nonprofits receive approval or denial of funding in seven to 10 days. Both said the innovation has been incredible and that people can take $5,000 and “make magic happen.”

With their roles in the community, for example, program officers often pick up on area trends and issues. The opioid epidemic is one of growing concern. Another is that manufacturing sector employment is down. And while manufacturing output is still extraordinarily high, there have been population losses.

So questions the foundation continues to ask is: What do we do to make our community as attractive as possible? How does our community attract families and businesses to move there? How do we ensure that professionals want to stay here and raise their families? “That theme is kind of at the forefront of all of our work,” said Wachtmann.

According to Spisak, workforce development is key because poverty is such an issue.

“Poverty just affects everything. Quality of life. Economic development. Population growth. Employers coming in. We’re doing so much more with workforce development, economic development, working with our Chamber to try to tie things together,” he said.

Muncie has always been grounded in entrepreneurship. In fact, the foundation exists because the Ball Brothers were inventors and makers. Among the programs that BBF has supported include STEM education and robotics for schools and after-school programs. Recent grants to maker spaces in Anderson and Muncie provide opportunities for these efforts.

“It ties back to ‘What is the community talking about?’ We faced devastating population losses. We have to be a community that can attract people here and business to locate here. We’ve got to capture that entrepreneurial spirit back. And so part of our job is to continue to find ways to drive to find good projects that drive the quality of life,” said Wachtmann.

Both officers believe another role that the foundation plays is a convener, asking, What are the problems? What are the challenges? What are your needs?

In the past year, summits organized by the foundation included opportunities for early childhood and environmental grantees to share innovative programming and potentially make collaborative connections. The environmental summit included grantees from Northern Michigan’s Leelanau area, which are supported by another Ball family philanthropy, the Muncie-based Edmund F. and Virginia B. Ball Foundation.

As Ball Brothers Foundation moves forward, it also looks back. Some of its earliest projects were visionary, including its early grant to build a hospital. With past strong support for medical efforts, and with the IU School of Medicine housing the second largest program in the state in Muncie, the foundation’s president began to look at what to do to continue to strengthen the medical portion of the economic community engine. The other major economic driver in the community is Ball State University.

Hospital and IU School of Medicine-Muncie personnel approached Fisher to begin a dialogue about the future direction of medicine in Muncie. The outcome was concept called Optimus Primary and is designed to strengthen the medical education sector in Muncie, giving it more of a niche.

“We know based on research that where a doctor trains, he/she often stays within a certain 100 miles radius of that area. And so the more doctors that train in our community, and the better doctors that train in our community, hopefully, we can retain some of those in our city. So that’s good for our region, and it’s good for our state,” said Wachtmann. Delaware County is 87th out of 92 counties in community health rankings, according to the Robert Wood Johnson Foundation county health rankings report, so good medical care is imperative.

What they learned from doctors in training in Muncie was that they wanted better housing options and specialized training opportunities.

“Then we’re able to issue a request for a proposal that says, ‘We’ve heard that these are themes that you have in common, and we’re ready to respond to that. You tell us what you want to do. We’re not going to tell you, we don’t know, what your future doctors need training-wise, but you tell us what you need to be innovative, and we’ll take a look at it,” said Wachtmann.

“So we made a series of grants of about half a million dollars in response to what were those identified community needs. Our funding is targeted to pilot several initiatives to make medical training in our community stand out,” she said.

One of those initiatives involves joint training programs where EMS personnel will be training right beside doctors in combined scenarios. This and other collaborations include Ball State University, Meridian Health Services and additional partners who will help develop program and curriculum that help strengthen Muncie’s physician-training programs and make them stand out.

There is some risk with innovation. Wachtmann said Purdue University’s President Mitch Daniels talks about measuring the risk of inaction against the benefit of proactive.

“We can sit and wait and think, ‘Oh, it seems kind of dicey’ or we can jump in and say, ‘We’re going to put a bit of money into it and we’ll see what happens.”

 

[content_box box_type=”normal”]

AN UPCOMING NONPROFIT OPPORTUNITY

Indiana Youth Institute, in partnership with the Ball Brothers Foundation, intends to help improve the organizational effectiveness of youth-serving nonprofit organizations in East Central Indiana.

With funding provided by the Ball Brothers Foundation, IYI invites community and faith-based youth-serving nonprofit organizations to apply for assistance to improve their current effectiveness and their capacity to serve in the future.

Grantees are limited to organizations within Delaware, Randolph, Henry, Jay, Madison, Grant, and Blackford counties.

Request for applications can be found here.

Applications are due to IYI by 9:00 a.m. (EDT) on Aug. 28.

Two grants will be awarded. Collaborative applications from two or more agencies for one grant award are encouraged. Each grant recipient will receive the following:

  • 80 to 120 hours of coaching and technical assistance focused on one or more of the following (see page 6 for more details):
    • Strategic planning
    • Fundraising and sustainability planning
    • Board development
    • Evaluation plans and processes
    • Financial management policies and processes
    • Human Resources management policies and processes
    • Executive Coaching
    • Another area that would increase the effectiveness of the organization
  • Registration and hotel expenses for 2 persons to attend IYI’s Because Kids Count Conference in Indianapolis – November 28 & 29, 2017.
  • Registration of $750 for 1 person to attend a professional development training or conference in spring 2018. The Fund Raising School at the Indiana University Lilly Family School of Philanthropy is one option for consideration.
  • The opportunity (based on successful completion of other activities) to apply for a sub-award of $5000 to $10,000 to be used only for approved organizational effectiveness/capacity-building purposes.
[/content_box]

 

Aug 07

Is outsourced accounting right for your NFP?

By Finance, Sponsor Insight

By Chris Mennel, audit manager, Alerding CPA Group

As your nonprofit strives to use its resources as effectively as possible, at some point, you might consider outsourcing the functions that fall under your accounting and financial umbrella.

Nonprofits often outsource areas that require specialized knowledge or a significant number of hours, such as payroll processing and payroll tax preparation. Outsourcing accounting functions also can provide benefits – if it matches up with your organization’s needs and budget.

Before committing to an outsourced accountant or an internal hire, consider the following:

  • Labor costs – Organizations that outsource their bookkeeping often realize an overall reduction in payroll, employee training and the cost of benefits. On-staff accountants are often charged with administrative tasks that could ultimately be accomplished with personnel that can be hired at a lower salary. Additionally, the outsourced provider would offer consistency, even when your organization has turnover. However, it’s important to know that sometimes the cost of outsourcing could be higher depending upon the mix of work required.
  • Depth of knowledge and expertise – Outsourcing with someone that specializes in nonprofit accounting often provides your organization with a higher level of expertise and greater resources than you could find if you hired your own accountant. The outsourced person likely has a number of individuals that they can consult with as issues arise, and these individuals will be knowledgeable in a variety of areas.
  • Efficiency – Bookkeeping is time-consuming, especially when dealing with multiple responsibilities. Moving bookkeeping, payroll and other financial responsibilities to an outsourced service provider allows your staff to focus on your organization’s mission. But, keep in mind that an outsourced accountant won’t be onsite every day.
  • Staying current with regulations and laws – Nonprofit regulations and laws are always changing, and it’s challenging and time-consuming to stay up-to-date on these matters. An outsourced accountant will likely be up-to-date on those matters that affect your organization.

Outsourcing allows you to work with financial professionals of varying levels of experience and expertise tailored to the functions they’ll perform. These responsibilities could include:

  • Processing payables, receivables and cash transactions
  • Reconciling accounts at each month’s-end
  • Preparing financial statements, budgets and forecasts
  • Assisting with tax and grant reporting requirements, and
  • Adequately communicating financial matters to your board.

But you don’t have to outsource all of these functions. Depending on your needs and budget, you can outsource only the ones that make sense for your organization. You also may benefit from occasionally using other firm experts — investment advisors, HR and IT support and valuation specialists, as necessary.

Many nonprofits turn to outsourcing accounting functions at times of significant personnel transition or workload increases. For the nonprofit that can’t afford the day-to-day expertise of a director of finance or CFO, outsourcing certain financial oversight functions, such as review of bank reconciliations, may enhance the system of internal controls.

When considering outsourcing any accounting function, make sure you’re working with a manager or partner who’ll become familiar with your operations. This will help provide continuity of service, as well as a resource for your senior management and board of directors. This manager or partner will also supervise junior firm members, providing an added layer of oversight.

The final word

Even with a provider handling your accounting functions, you won’t be able to absolve yourself of financial decision-making. Remember, while an external firm can assist and advise you on financial matters, those charged with governance (typically the board of directors) must continue to have the last word on making significant financial decisions. Be prepared for some commitment of time during any transition of accounting services. A learning curve is inevitable, whether it be external outsourcing or an internal hire. However, accounting and financial reporting is ever-changing and complex, at times. The wealth of knowledge and support that an experienced outsourced accountant can bring to the table could be invaluable.