The DCI 990s

[N.E. Brigand]

Some miscellaneous expenses

"Bad Debt Expense" showed up for the first time in 2011, at $20,000. In 2012 it rose to $84,000 (Ream, you gotta pay that FN bill!).

That's interesting. You're thinking maybe DCI made loans to Glassmen, who then couldn't pay them back? But that wouldn't be written off until they were sure Glassmen were closing, I think. So perhaps Teal Sound?

I'm used to seeing donors pledge an amount to be paid over some number of years, and as long as the pledge is in writing, accounting rules require the whole thing to be booked as income in that fiscal year and listed as a receivable, which is reduced as payments are made. If the donor subsequently cannot honor the commitment, it has to be written off as bad debt. Maybe DCI encountered something like that?

Edited August 25, 2014 by N.E. Brigand

[Jeff Ream]

I'd bet Glassmen got quite a bit of help, too, although I don't know for sure. And Music City??

entirely possible.

[garfield]

Before we head off into the balance sheet, I thought this an appropriate opportunity to list what DCI said it spent money on, in a broad and general sense. In the statement of "Program Service Accomplishments" they list the following as what they spent money on:

$5,500,852 Drum Corps Shows. "To provide drum corps competitions for a number of major shows and various sanctioned shows.

$487,954 "Video projects, audio recordings, programs/yearbooks and souvenirs sold to promote drum corps activities."

$586,447 "Congress/Seminar educational division, judges training to provide educational clinics and workshops for drum corps judges.

Somewhere later we'll look at how much of DCI's gross revenue was spent on its mission. On its surface, the $6,575,253 shown here looks like DCI spends plenty on their "Program Service" mission.

[garfield]

Before we finish up, one final detail about Expenses. Many people compare charitable organizations based on the amount of money that actually gets to the charitable purpose of the organization vs. the administrative expenses used to get the money there. The 990's provide a look at this comparison by requiring expenses to be categorized into two categories, Program Service Expenses and Management and General Expenses.

DCI Program Efficiency

In 2009, Total Expenses were $8,542,134. $5,373,139 (62.4%) were Program Service and $3,168,985 (37.6%) were M&G.

In 2010, Total Expenses were $8,875,705. Of that, $5,768,844 (65%) was Program Service and $3,106,861 (35%) was Management and General.

In 2011, Total Expenses were $9,429,827. Of that amount, $6,555,032 (69.5%) went to Program Service Expenses and $2,874,795 (30.5%) went to Management and General Expenses.

In 2012, Total Expenses were $9,606,976. Of that, $$6,575,253 (68.4%) was spent on Program Service Expense, and $3,031,723 (31.6%) went to Management and General Expenses.

[garfield]

The balance sheet - assets and liabilities. Assets are cash, savings, accounts receivable, inventories, prepaid expenses, land & buildings, investments, and "other" assets.

Liabilities are accounts payable, deferred revenue, and "other".

Bottom lines are as follows (for those who want to cut to the chase):

2009: Assets = $2,078,338, Liabilities = $1,872,380, Net Assets = $205,958
2010: Assets = $1,984,049, Liabilities = $1,693,392, Net Assets = $290,657
2011: Assets = $2,955,395, Liabilities = $2,351,276, Net Assets = $604,111

2012: Assets = $3,245,255, Liabilities = $2,728,616, Net Assets = $435,611

[garfield]

There were a few noteworthy changes in the balance sheet in 2012. In the assets category:

Accounts receivable:
2009: $955,556, 2011: $1,332,183 2012: $1,367,532

Inventories:
2009: $347,878, 2011: $558,572, 2012: $711,396

Investments:
2009: $302,562, 2011: $122,601

Other Assets:
2011: $375,000, 2012: $380,000 (the Vickers photo collection)

In the liabilities column:

Accounts payable fell from $506,759 in 2011 to 464,507 in 2012.

Deferred income increased from $1,836,084 in 2011 to 1,943,041 in 2012

Other liabilities were just $8,433 in 2011. In 2012 it jumped to $321,068.

To try to explain the jump in "Other Liabilities" I went to the Schedule D of the 990 return where I find "Notes Payable to Bank" - $315,000".

Considering the filings are a snapshot in time, the new debt to the bank may be a timing issue that we'll not see again on the 2013 returns.

[Jeff Ream]

interesting...I got behind on following this

[N.E. Brigand]

Jeff, if anyone ever shares DCI's audited financial statements with you, be sure to make them available to garfield for further analysis!

[Jeff Ream]

Jeff, if anyone ever shares DCI's audited financial statements with you, be sure to make them available to garfield for further analysis!

no worries there