The 990's

[garfield]

Garfield. I, for one, am very grateful for the information you have provided so far. What does this information tell you about the activity as a whole? I think this is a question suited for those that know how to read these things.

Part of the point of this thread is to give you the information to form your own opinion without having to read the 990s so, I'd bet, if you've followed along so far, you could form an opinion that would be just as valid as mine.

If you're looking for a single summary opinion so far, mine would be that, based on the data so far, the activity was healthier in 2011 than it was in the prior three years. "Past performance is not indicative of future results" is worth mentioning but, from all indications, it doesn't appear that DCI, as an entity is about to become financially insolvent.

What do you think?

[garfield]

A good friend of mine pointed out something that has piqued my curiosity with a question that may be unanswerable:

If Contributions/Donations in 2011 were $710,196, and "Donor Expenses" were $526,640, that means that net contributions are $183,556

Is there a "Development Director" at DCI who's in charge of gaining donors? (I don't know). If yes, what's he paid (again, there's no mention of staff or salaries in the 990's)? Assuming there is such a position and that person makes, say $50,000 per year (a COMPLETE guess), is earning $183,xxx, or about 3.2x the salary, a reasonable Return on Investment in that person? What if that person is being paid $75,000 per year? $100,000?

Maybe someone more familiar with professional fund raising will have an idea, because I don't.

And I'm NOT pointing fingers or looking for ineptitude, I'm looking for information from someone more qualified in this area that I am.

[lindap]

As background, I’ve dabbled as a self-taught bookkeeper for small non-profit organizations for years. Recently, I’ve learned more about payable and receivable processes and how to consolidate general ledgers into annual financial statements. As of last year, we are now a team of 2 volunteer co-Treasurers. My colleague does the monthly reconciliation while I do the annual reports. (It’s a good thing to keep volunteers interested and happy to avoid burnout lol). Our next steps are a proper budget/forecast model and detailed inventory linked to amortization. We’re excited!

To the OP. I like how you provided an executive summary of approximately 75 pages showing 3 years of revenue and expense. Our organization has major fundraising every 2 years. Alternate years show a gain or loss (like a yoyo). I like how you translate a term on the forms such as ‘Donor Expenses’ to our drum corps experiences. This thread is informative for me and regardless of the fact that we fill out different forms or regardless if our non-profit organizations are big or small, we still have to fill out the forms! Thanks for this thread Garfield. Keep up the good work. I gotta go now and go surfing at www.guidestar.org : )

[Jeff Ream]

I read the posts on this thread and wonder....Why would the average drum corps fan care? Seems like some people have too much time on their hands to think of this stuff. BITD, did anyone care about what money DCI made? NO! Is this the....seasons over and I want to make a name for myself on DCP? Some of you just sit at your desk or on your couch and think, "How can I cause problems on DCP today?" Gee, get a life!

(Waiting for well-thought out reply and a slap in the face)

I don't think anyone is trying to cause problems Keith. Every year, we hear more doom and gloom of drum corps and financial aspects. This is very educational to those who want to know the $$ issues involved.

[Jeff Ream]

You sure that wasn't Linda Lovelace???

no, I'm pretty sure she was following something else

[Jeff Ream]

Part of the point of this thread is to give you the information to form your own opinion without having to read the 990s so, I'd bet, if you've followed along so far, you could form an opinion that would be just as valid as mine.

If you're looking for a single summary opinion so far, mine would be that, based on the data so far, the activity was healthier in 2011 than it was in the prior three years. "Past performance is not indicative of future results" is worth mentioning but, from all indications, it doesn't appear that DCI, as an entity is about to become financially insolvent.

What do you think?

which means the 2012 results will really be telling

[Pete Freedman]

A good friend of mine pointed out something that has piqued my curiosity with a question that may be unanswerable:

If Contributions/Donations in 2011 were $710,196, and "Donor Expenses" were $526,640, that means that net contributions are $183,556

Isn't there some kind of charity tax dodge in which the millionaire gives all their income to the charity, and the charity gives 90% of it back in the form of a 'premium'? I heard the rules have tightened up on this (limited to a small % of donor's income, limited value of premiums, etc.) but it still exists to some extent I think. That might help explain it.

Would the fundraiser's pay count as donor expenses? Doesn't seem like it. Maybe if that person is a contractor?

Still, as long as the amount raised is more than the 'donor expenses' plus other fundraising costs, I would think it's worth it for DCI.

And I'm NOT pointing fingers or looking for ineptitude, I'm looking for information from someone more qualified in this area that I am.

My view is:

Looking for ineptitude: Good

Pointing fingers (without more complete info): Bad

[N.E. Brigand]

Is there a "Development Director" at DCI who's in charge of gaining donors? (I don't know). If yes, what's he paid (again, there's no mention of staff or salaries in the 990's)? Assuming there is such a position and that person makes, say $50,000 per year (a COMPLETE guess), is earning $183,xxx, or about 3.2x the salary, a reasonable Return on Investment in that person? What if that person is being paid $75,000 per year? $100,000?

One rule of thumb I've heard is that each development staffer's salary should be 10% of the level of donations having that person brings in. But it varies depending on the nature of the position, and presumably the nature of the organization. And that's just salaries; there are other expenses. For instance, many organizations raise money at large benefit events: hundreds of people at a banquet + auction (live and/or silent) + entertainment, with tables of ten going for $10K or more; one budget I've seen for such an event had roughly $100K in expense (again, apart from regular devo. staff salary) for $300K in revenue.

[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.

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

(Sorry, just realized the order by year is reversed from prior posts.)

If this is a representation of efficiency, these numbers look pretty good. Seven percent more of DCI's Revenue was spent on Program Service in 2011 than in 2009, and Management and General expenses consumed less of the Revenue over these three years.

This would be a good thing depending on where you stand and what's behind the numbers. More money going into Program (show) expenses could mean more money is being paid out to corps, or it could mean more money went into show production (like venue costs, etc).

Anecdotally, I have noticed a decline in the number of attendants guarding the entrys to prevent fans from entering or leaving during a show. Those savings in venue costs (if my observation is a true representation) may mean the corps make more but the fans suffer more disruptions, for example.

Without an explanation of Program Expenses there's no way to tell who got the benefit of DCI's greater management "efficiency".

EDIT: If it's reasonable to presume that the corps benefited most from this increase in effeciency, I have to ask: What the heck are they complaining about? With all that DCI does to produce a tour (venue, rights, travel, etc) is it reasonable to think that a "Music in Motion" tour could be produced more efficiently?

Edited December 24, 2012 by garfield

[garfield]

Note: That last sentence above was meant to induce banter. So...?