Amid the 2008 financial melt down organizations and individuals have been further adversely effected with the traditional financial institutions. The yield on savings, money-market accounts, and certificate of deposits are dropping dramatically.

There are basically only two types of entities who are giving a better return;  Credit Unions and Small Banks.  It just goes to show you that local banking just might be a better way to bank and an avenue to building sound financial relationships.

Blue Cross Blue Shield of Massachusetts is a nonprofit organization that is a health care insurance entity. The CEO was paid 1.36 million in 2006 and 3.6 million in 2007. The Chairman was paid 1.73 million in 2007. The former chairman received 16.4 million to retire in 2007. Average premiums increased 7.5 percent.

The CEO of Harvard Pilgrim was paid 1.38 million in 2007. The CEO of Tufts Health Plan was paid 1.19 million in 2007.

If the President of the USA can be paid a salary of $400,000 then that should be enough for any executive of a nonprofit regardless of revenues.

Since these organizations are acting like for-profits in the manner in which they run their organization compensations and incur costs should they be stripped of their nonprofit status?

The states should allow access to the nonprofit organizations to have their employees be on the state medicare system for a flat fee per month. This will give the medicare and nonprofit system better pricing options.

The other option is to have nonprofits create a cooperative insurance company that they have better control over for costs and benefits.

Health care insurance and medical expenses should not have to make you bleed money as well!!!

Mandated health insurance with a combination of sponsored government and private insurance is necessary to prevent bankruptcy of small businesses and individuals due to medical costs. One element of mandated insurance should include catastrophic insurance for those exceptions where regular insurance will not cover.

To a certain degree government has mandated the ability to gain treatment. However, the government has not guaranteed that you will not go bankrupt. This is especially more important because of the number of medical fields that are now selling the debt to third parties, like GE who charge interest on the debt. The transfer of the debt is not base on your ability to pay. The medical establishment gets paid a percent of the bill immediately and closes your account. Affordable health care requires standardization of rates. It also requires the setting of a ceiling of how much any one citizen should pay.

Medicine should be treated on two levels; like a utility service in that rates are set by one entity for all of us; and like an entitlement that government has guaranteed equal access to treatment regardless of an ability to pay.

Solution:

The federal government has specified that 7.5% of a persons adjusted income paid for medical expenses is not deductible on Form 1040 Schedule A. Thereby, setting the standard that anything above 7.5% of a person’s income spent on medical expenses should reduce other liabilities. The other standard the federal government has provided is the creation of the Medical expense flexible spending account with a $5,000 maximum.

Therefore, I would propose that individuals not be held liable for medical expenses, which exceed 7.5% of their adjusted income. Any amount to exceed such should be paid by a portion of a catastrophic health insurance policy that is mandated as a component of health care insurance and then the government as the payee of last resort. However, the cost of the procedures must be set at the government rate for any amount above the 7.5%.

The election process is in full swing for selecting nominees for the various parties. I have not heard any conversation yet from any candidates of the role they foresee of nonprofits in their goals for America. I have heard over and over and over the words “An Agent of Change” and “Making Corporate America Accountable”.

Here are just four questions for your organization and its employees to think about as to which candidate really will make the difference.

As a tax exempt organization you still pay a tax on gasoline and fuel. Exxon made 20 billion in profits. The other fuel companies made comparable profits as well. Government and nonprofits do not have enough money available to heat peoples homes who need it. How does your organization absorb the increases in the gasoline and fuel costs without making cuts?

The government pays farmers, mostly large conglomerates, not to grow food. This policy was to help the small farmers to have fixed prices on food. People are going hungry, cannot afford to buy enough food, and food pantries are unable to meet demand. Most of your employees make less than a living wage and worry about feeding their family. How does paying millions for not growing food help people buy food or make food available to people?

The government has been trying to resolve the credit crunch due to the bad deals that big financial businesses created. The securities were in many ways a pyramid scheme that was dependent upon prying on US citizens and others peoples money. Now the government wants to help the investors pain and change the rules under the guise it will help everyone. What help has the government provided your organization to lower your exposure to cover costs they do not fund? How does the fact that in foreclosures the investors evict paying renters. How does this help the fact that most of your employees struggle to find affordable housing?

Government has mandated educational standards and yet does not allocate sufficient funds to bring schools up to the standard. While there has been an increase in funding that is to be spent in each corner of the USA. Not much for each school to help students. Business demands tax breaks, uses tax loopholes to lower or not pay taxes. The US government spends billions overseas to help the economic growth of other countries and people. How has the standard helped your organization obtain the trained people you need?

We all have a choice. Vote and be heard.

For the new year replace all conventional light bulbs with compact fluorescent bulbs.

Have the cooling and heating thermostats on timers.

Build breezeways to the outdoors to prevent heat or cool air from escaping from the building.

Have lights on motion detectors and timers.

Use newsprint to wrap gifts.

Buy preused or returns products. Usually save a minimum of 25%. Most of time the item was just not wanted, wrong size or was a duplicate.

Most musuems have a free time, call them and find out. Arrange for your organization to attend during that time.

Health costs are making the cost of an employee much harder for an organization to support.

Make sure employees know the total costs of all insurance benefits, taxes, unemployment and workers compensation paid out by your organization in addition to their individual salary. By showing the increased costs that the organization is incurring each year, it provides for a clearer understanding of why raises are harder to obtain.

Organizations that provide staff with a clarity on costs and a compensation bonuses pool Create a pool of funds as a one time expenditure), makes it easier to control costs. Further, staff whom have the knowledge of what it truely costs to employee staff are more engaged with the organization.  An organization where staff have an understanding where the money is being spent are more committed to that organization when spending is viewed as being distributed fairly.

How often does the organization let people know what it is doing, what it has accomplished or what its needs are? What is the organization’s rate of reoccurring donors? How committed do donors feel to the organization?

Is donor pool increasing?  Positive outcome

What is the organization doing to keep its base and increase the amount of giving by current donors and increasing donor base?

Is donor pool stagnated?  Cause of concern

Time to review if percent of donors is replacing old donors. Why is organization losing donors?

Is donor pool decreasing? Need to take action 

Time to change what organization is doing.

The key to any level of success in raising money is communication with an organization’s donor base.  The use of email and newsletters are cheap and fast.

The change in accounting standards will cause two surprises for nonprofits.

Audit costs are likely to increase up to 20%.

Your audit will cite internal controls and other processes in your organization which it had previously ignored in prior years.

To control your audit costs, be better prepared to provide your auditor the financial material in an organized manner. Your organization will be billed for each minute. Your mess is billable for them and they are not required to tell you how to decrease your costs.

Second, make sure more employees are trained on your internal control processes. The more you can document the checks and balances the better for management and the board to show their fiduciary responsibility.

If you took a moment to understand where bottle water comes from and its degree of regulatory safety review you might rethink its purchase.

Bottle water is one great sales gimmick.  You pay for the plastic the bottle is shipped in, you pay for the truck carbon imprint that delivers the bottle water, you pay for the production of the fuel to support the truck, you pay for the drilling for water, you pay for the environmental impact of the drilling.  You take your chances with the unregulated or tested bottle water industry.  You take chances with the bacteria and mold that builds up in the water coolers due to the air entering the system each time you change the bottles. 

Oh, how about the fact that you’re paying the square footage to store all of those bottles.

If you review the amount you spend on the water and what perks you could do for your employees in lieu of it, you would be surprised.

You can create the same if not better result with Reverse Osmosis Systems and lower your costs dramatically.

Water coolers are connected to a filtration system. Gone is the need to store bottles, change the bottles, clean up the slippage and running out of water.

If you want a recommendation, check out the company the Commonwealth of Massachusetts has selected at: http://www.atlaswatersystems.com

I have no association with any company but feel that this option is a great one for any nonprofit that goes through 6 bottles plus a month. 

Circle Lending now called Virgin Money is a great resource for creating personal and business loans between between associates, relatives and friends. http://www.virginmoneyus.com/Home/tabid/36/Default.aspx

Governing Magazine:  A resource on states and localities.  Great for keeping the pulse on what is happening in states and localities.   http://www.governing.com

Nonprofit Quarterly:  A magazine that provides valuable management information and proven practices. The information is cutting edge, relevant and useful.    http://www.nonprofitquarterly.org

Mission Fish:  The easy way on Ebay to convert in-kind donations into cash or a new way to invigorate your fundraising efforts http://www.missionfish.org/ForNonProfits/fornonprofits.jsp