FASB
Posted by Maris Edgar  |  August 18, 2008 6:35:29 AM

Why don't all non-profit organizations follow FASB or GASB standards?

Charity Navigator's rating
Posted by Bruce Smith  |  August 14, 2008 11:23:13 AM

Since it will likely be a long time before the FASB folks get interested in our situation, it would really be tremendous if Charity Navigator would refine their rating method to reflect the true value of volunteers.

efficiency
Posted by Watchdog08  |  August 12, 2008 7:31:36 AM

there is some very valuable insight in the previous comment that deserves the attention of both contributors and the FASB.

organizational efficiency rating of zero stars
Posted by psalm 24:1  |  August 11, 2008 6:16:15 AM

The zero star rating is misleading, and here is the reason (per Bruce Smith, President of Wycliffe Associates): Wycliffe Associates follows the Financial Accounting Standards Board (FASB) standards for our accounting and public reporting. To our great disappointment, FASB requires that all expenses related to recruiting and mobilizing volunteers be counted as “fundraising”. The more we spend on volunteer mobilization the more this expense increases. On the other hand, FASB limits the accounting of volunteer labor contributions as revenue to: 1) only those volunteers who are serving in a professionally certified capacity (i.e. a CPA doing accounting work), and 2) those volunteers that are creating a capital asset (i.e. construction). This is a significant disadvantage to Wycliffe Associates because most of our volunteers are: 1) not serving in a professionally certified capacity, and 2) not doing construction. Some years ago construction was all Wycliffe Associates volunteers did. In recent years it has become clear that volunteers are urgently needed in a wide range of administrative, managerial, and technical support roles. As we’ve grown 70-80% annually in non-construction volunteers this creates an increasing gap between the “accounting” value and the “actual” value of volunteer contributions. The end result is that our volunteer mobilization expenses continue to rise while the “accounting” value of volunteer labor rises at a much slower rate due to the FASB rules. We have appealed to FASB to reconsider this standard, to no avail. Unfortunately, this means that our ratios are going to get worse as we succeed in mobilizing increasing numbers of volunteers.