Daniel W. Elliot, CPA

  Although there are significant differences between forprofit and not-for-profit entities when it comes to program and financial management, there are many similarities: First, forprofit delivers goods and services to make money for investors, where not-for- profit is there to deliver a good or service without an expectation of profit. However, they are both being paid for a deliverable, and if they do not meet expectations, payers may send their money elsewhere. Similar...but different. Second, from a financial management perspective, the requirement for not-for-profit organizations to have subledgers for each program is critical as funders expect you to manage and report on how you use their money; however, in forprofit, many organizations also do this in order to keep track of departmental or customer project costs. Examples include law or accounting firms who keep track of client revenue and expenses, and manufacturing firms who monitor revenue and expenses when constructing a...

  Before we start allocating funds and preparing to deliver our programs, we need to have a conversation about administration versus program delivery costs. While I appreciate the fact donors want their funds allocated to boots on the ground service delivery, there are costs to get there, and everyone needs to pay their fair share.   The first thing we need to do is clearly establish the difference between ‘program delivery’ costs and ‘administrative’ as many providers and funders battle over the fine line between the two. Believe me when I tell you, the line is fine.   An extreme view is ‘all costs are program related.’ Why do I say this? Simple, all costs occur for no other reason than delivering the program; for example, human resources personnel recruit, select, train, and pay staff who deliver the program, and if not for the program, neither the staff nor the human resources officer would exist. Accounting personnel collect contract payments, service fees, and do...

Can you imagine turning down a job because they have a pension plan? Recently I was working on the annual contributor report for a Defined Benefit Pension Plan. While the corporate world has traded these in favour of Defined Contribution Pension Plans to no longer deal with the headache and liability, there are many reasons why employees should want conversion as well. For those who are unsure of the difference: Defined contribution plans are where the employee and employer each make a contribution to a plan such as a Registered Retirement Savings Plan (RRSP) in Canada. The contribution is defined, for example 9% : 9 % of your salary, it is your fund to manage as you wish and is yours regardless of where you work. A Defined Benefit plan is similar in that you each contribute a portion, but the plan belongs to the employer, the terms dictate what your payment will be when you retire which is typically calculated based on age and years of service; these typically work fine when you stay ...

This is not the days of old, and you are not the King’s Men; you exist to serve the public, the public does not exist to serve you.’   An area requiring a major overhaul in the not-for-profit sector is the relationship with funders, in particular for programs sponsored by government entities at the various levels. Not only are not-for-profit organizations treated as subordinate extensions of the government body they perform services on behalf of, but the demands imposed by funders are overwhelming thereby eroding the ability for effective service delivery.     In December 2006, the Treasury Board of the Government of Canada issued an independent report called: From Red Tape to Clear Results - The Report of the Independent Blue Ribbon Panel on Grant and Contribution Programs. In summary, government departments were making it far too complicated for not-for-profit organizations to deliver services, and these departments were to back off so more could be spent on service del...

There are many forms of business agreements each having their own intention and legal consequences; however, these titles are often used incorrectly, and users do not realize this until it becomes a problem. Take note the following information is general where jurisdictional nuances may apply; with this I encourage readers to seek legal counsel on what applies to them and their situation. When dealing with government or other nonprofit entities, you will normally be funded through either a Service Contract, or Contribution Agreement including Grants, Loans, and Subsidies. Take caution in although there is a great deal of literature regarding the differentiation between the terms which also varies by jurisdiction, you will find situations where an arrangement is called one thing where according to literature you have read, it more closely resembles another.    Throughout your nonprofit and public service careers, you will also find other nomenclature such as Memorandum of Agree...