Comments on: The Power of an Accounting Convergence http://www.socialvelocity.net/2009/02/the-power-of-an-accounting-convergence/ Accelerating Social Innovation Thu, 15 Jul 2010 21:40:06 +0000 hourly 1 http://wordpress.org/?v=abc By: Nell Edgington http://www.socialvelocity.net/2009/02/the-power-of-an-accounting-convergence/comment-page-1/#comment-263 Nell Edgington Mon, 09 Mar 2009 16:33:33 +0000 http://www.socialvelocity.net/?p=534#comment-263 Renata, Thanks for your comments. I agree with you that banks need more oversight in their use of federal dollars, but I don't agree that nonprofit fund accounting is acceptable. I agree with you that because of weak boards nonprofits have little oversight. I believe we should change that problem instead of forcing nonprofits to practice costly and inefficient accounting practices. Overhauling the requirements of nonprofit boards could do much more than simply ensure that money is being spent according to mission and donor requirements. It could much more effectively harness an often underutilized resource. Renata,

Thanks for your comments. I agree with you that banks need more oversight in their use of federal dollars, but I don’t agree that nonprofit fund accounting is acceptable. I agree with you that because of weak boards nonprofits have little oversight. I believe we should change that problem instead of forcing nonprofits to practice costly and inefficient accounting practices. Overhauling the requirements of nonprofit boards could do much more than simply ensure that money is being spent according to mission and donor requirements. It could much more effectively harness an often underutilized resource.

]]> By: Philanthropy Daily Digest | Tactical Philanthropy http://www.socialvelocity.net/2009/02/the-power-of-an-accounting-convergence/comment-page-1/#comment-246 Philanthropy Daily Digest | Tactical Philanthropy Tue, 24 Feb 2009 02:01:05 +0000 http://www.socialvelocity.net/?p=534#comment-246 [...] The Power of an Accounting Convergence | Social Velocity Nell Edgington looks at how the TARP program (bank bailout) is demonstrating that our expectations of nonprofits and the way they deal with their finances is "crazy". Great post. (tags: philanthropy) This entry was written by Sean Stannard-Stockton and posted on February 23, 2009 at 6:00 pm. Bookmark the permalink. Follow any comments here with the RSS feed for this post. Trackbacks are closed, but you can post a comment.  Email This Post [...] [...] The Power of an Accounting Convergence | Social Velocity Nell Edgington looks at how the TARP program (bank bailout) is demonstrating that our expectations of nonprofits and the way they deal with their finances is "crazy". Great post. (tags: philanthropy) This entry was written by Sean Stannard-Stockton and posted on February 23, 2009 at 6:00 pm. Bookmark the permalink. Follow any comments here with the RSS feed for this post. Trackbacks are closed, but you can post a comment.  Email This Post [...]

]]> By: Renata Rafferty http://www.socialvelocity.net/2009/02/the-power-of-an-accounting-convergence/comment-page-1/#comment-244 Renata Rafferty Mon, 23 Feb 2009 19:42:08 +0000 http://www.socialvelocity.net/?p=534#comment-244 "What underlies this mistrust of the nonprofit sector?" The mistrust is rooted in the fact that the ultimate fiduciary authority in a nonprofit lays with a volunteer board, with little accountability and virtually no (personal) consequences for bone-headed decisions, weak fiscal oversight, lack of "fundamentals" on which to base decisions, and an often laissez-faire attitude about the ethical imperatives of stewardship. And these are problems that exist regardless of size. Fund accounting is a pain, but for a donor or grantor, fund accounting is one of the few checks in place that ensures that their gift, grant or donation is being utilized to achieve the social objective the donor intended. Too often, "fungible" means "fudge-able." The answer here is to place the same fund accounting requirements on banks that are on nonprofits. Force them to prove to us that they are using our taxpayer "donations" for the purposes for which they were intended. If they can afford seven-figure bonuses, they can afford some six-figure accountants to track funds usage. Renata Rafferty Rafferty Consulting Group http://www.raffertyconsulting.com twitter.com/RenataRafferty “What underlies this mistrust of the nonprofit sector?”

The mistrust is rooted in the fact that the ultimate fiduciary authority in a nonprofit lays with a volunteer board, with little accountability and virtually no (personal) consequences for bone-headed decisions, weak fiscal oversight, lack of “fundamentals” on which to base decisions, and an often laissez-faire attitude about the ethical imperatives of stewardship. And these are problems that exist regardless of size.

Fund accounting is a pain, but for a donor or grantor, fund accounting is one of the few checks in place that ensures that their gift, grant or donation is being utilized to achieve the social objective the donor intended.

Too often, “fungible” means “fudge-able.” The answer here is to place the same fund accounting requirements on banks that are on nonprofits. Force them to prove to us that they are using our taxpayer “donations” for the purposes for which they were intended. If they can afford seven-figure bonuses, they can afford some six-figure accountants to track funds usage.

Renata Rafferty
Rafferty Consulting Group
http://www.raffertyconsulting.com
twitter.com/RenataRafferty

]]> By: Changing Nonprofit Finance: The Other Side of the Story | Social Velocity http://www.socialvelocity.net/2009/02/the-power-of-an-accounting-convergence/comment-page-1/#comment-243 Changing Nonprofit Finance: The Other Side of the Story | Social Velocity Mon, 23 Feb 2009 18:59:06 +0000 http://www.socialvelocity.net/?p=534#comment-243 [...] my argument from previous posts here and here about how nonprofit finance must change, today I want to focus on the other side of the [...] [...] my argument from previous posts here and here about how nonprofit finance must change, today I want to focus on the other side of the [...]

]]> By: Yew Kam Keong (Dr.YKK) http://www.socialvelocity.net/2009/02/the-power-of-an-accounting-convergence/comment-page-1/#comment-239 Yew Kam Keong (Dr.YKK) Sat, 21 Feb 2009 00:51:12 +0000 http://www.socialvelocity.net/?p=534#comment-239 You hit the nail on its head. It's time for accounting convergence. The common factor in all this is public accountabilty for all of them deal with public money. While a common accounting practice is important, the auditing process is just as important if not more important. The current economic meltdown would not have occurred if the auditors have exercised due diligence and rang alarm bells to plug leaks long before the dams broke. While my job deals with innovation, I think irresponisble innovations for short-term display illusions of profits and to boost performance figures are the source of the current crisis. Financial innovations should only be implemented if and when the corporate leaders are imbued with a sense of social responsibility and a set of accepted human values. Yet these people who created misery for billions of people are enjoying the fruits of their ill-gotten gains. Why? You hit the nail on its head. It’s time for accounting convergence. The common factor in all this is public accountabilty for all of them deal with public money. While a common accounting practice is important, the auditing process is just as important if not more important. The current economic meltdown would not have occurred if the auditors have exercised due diligence and rang alarm bells to plug leaks long before the dams broke. While my job deals with innovation, I think irresponisble innovations for short-term display illusions of profits and to boost performance figures are the source of the current crisis. Financial innovations should only be implemented if and when the corporate leaders are imbued with a sense of social responsibility and a set of accepted human values. Yet these people who created misery for billions of people are enjoying the fruits of their ill-gotten gains. Why?

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