2016 Q3 ISSUE COSTTREE CAPTURE. 33
His thinking is right on. We have been completely crippled by this thinking with regard to nonprofits and their ability to take on social ills in a very powerful, progressive, and social way. It is really problematic. Sacramento is still a relatively small town; we only have one foundation and only a handful of corporate headquarters.
When it comes to St. Johns, we have grown from a one-million-dollar to a five-million-dollar organization in a relatively small town. Due to our Sacramento location, we rely on a small funding base, and it is really challenging. If I had the ability to use marketing dollars in an effective way, I could turn one dollar into one hundred dollars, and we would have a lot less stress around raising money, but we can't do that. If we had a huge marketing budget, we would get a lot of criticism.
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CT: How has your financial reporting changed since the implementation of the Uniform Guidance (2CFR Part 200)?
SJ: As it relates to St. John's, it has not changed much. However, we are currently upgrading our system from Excel so we can provide more details regarding the time tracking of our employees.
We have 60% of expenses in employees, We are on an “employee working with a client basis” and there is nothing we can automate, so different funders want to see the tracking of employee hours and billing. Funder’s expectations are changing, so we need to grow our system to match what funders are expecting.
CT: Do these new regulations put a financial burden on your nonprofit, or does it put you in a stronger financial position?
SJ: It depends on which regulations you are referring to. Technically, audit compliance overall is a good thing. I would never argue against asking nonprofits who are receiving public dollars to present outcomes and be held accountable. Some regulations are positive; however, some are difficult. There needs to be more dialogue with people who are responsible for implementing things in terms of what is more realistic.
CT: Have you had any challenges working through the audit process with your funders?
SJ: There are always challenges when you’re a nonprofit and under-resourced. One thing that relates to government proposals is that they allow very little administrative overhead. What they’re asking for requires a lot more than what they’re allowing for.
Our allowable administration, although it may vary a bit, is only around five percent. If you look at all the details they ask us to report back on, and I’m not saying that it’s a bad thing, it does not compensate at all for the work involved. I can't pay my people, so I have two people doing the job of three or four, so there are always little things missing or filed incorrectly. I don’t get enough money to do all the things they’re asking us to do, so, of course, there are always going to be some problems with the audit.