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ASAE Foundation’s Association 990 : A Powerful Tool for Benchmarking John N. Dripps, CPA National Association of Secondary School Principals Nat Bartholomew, CPA CliftonLarsonAllen LLP. Agenda. Define benchmarking and trend analyses Why benchmark (quick summary) What tools are available

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slide1

ASAE Foundation’s Association 990: A Powerful Tool for BenchmarkingJohn N. Dripps, CPANational Association of Secondary School PrincipalsNat Bartholomew, CPACliftonLarsonAllen LLP

agenda
Agenda
  • Define benchmarking and trend

analyses

  • Why benchmark (quick summary)
  • What tools are available

(benefits / limitations)

  • ASAE Foundation’s Association 990
  • Identifying key metrics
  • Utilizing ratio analyses
  • Case study – NASSP
benchmarking internal and external
Benchmarking – Internal and External
  • Internal = Trend Analyses

Utilizing historical financial and non-financila information from your organization to spot trends

  • External = Benchmarking

Utilizing financial and non-financial information from peer organizations to evaluate performance, financial condition, etc.

why benchmark
Why Benchmark?
  • To compare like attributes or metrics from similar demographic data samples
    • To uncover business processes, practices, and strategies
  • To provide a baseline for performance improvement
  • To gain best practices
    • Measure by fact rather than intuition or opinion
  • Benchmark when you want to …
    • Make better-informed decisions
    • Answer the question

“how do I compare?”

    • Take pulse of your financial health
    • Obtain a single version of the truth
why benchmark1
Why Benchmark?

As a way to share and collaborate, stimulate conversation and reflection, advocate for yourself, and takepulseof environmental trends.

what tools are available benefits limitations
What Tools Are Available – Benefits/Limitations
  • Similar organization Federal Form 990 (public document)
  • Annual reports or published financials
  • GuideStar – Lots of information stemming from filed Federal Form 990s
  • ASAE’s Operating Ratio Report (ORR) or Association 990
  • NTEN – IT statistics
  • NCCS – Operating reserves
what is asae s orr
What is ASAE’s ORR
  • Compilation of financial data from participating associations
  • First published in 1953
  • Collected via Federal Forms 990 and survey supplements
  • 660 valid surveys utilized in 13th Edition – 5% more than prior ORR – and 8¼% response rate
  • Compiled ’07 issued ’08
  • Next edition due out 2012!
orr respondent profile
ORR – Respondent Profile
  • 67% were 501(c)(6) / 28% (c)(3)
  • 47% reported total gross revenue > $5M
  • Typical or median organization was $3.8M
  • Largest concentrations

- DC 27% / Chicago 10% / NY 3%

extracting relevant data
Extracting Relevant Data

ORR Cuts Data By Several Categories

  • Total Revenue (Six Tiers)
  • Membership Type – Trade vs. Professional
  • IRS Tax Status (c)(6) vs. (c)(3)
  • Geog. Scope (Int’l/Nat’l or Regional/State/Local)
  • Metropolitan Area (e.g., DC, NY, etc.)
  • Industry Sector/Interest Area (e.g., Bus/Industrial, Education, or Healthcare/Medical – Each Separated by Membership Type)

ORR Interactive

asae foundation s association 9901
ASAE Foundation’s “Association 990”
  • Federal Form 990 – core form only
  • 18,952 ’08, 19,693 ‘09 and 23,339 ‘10 990s thus far
  • Functionality allows data sorts on the year and …
    • 501(c) class (9 choices)
    • Number of employees (6 tiers)
    • Total revenue (8 tiers) and total expense (8 tiers)
    • Membership revenue (8 tiers)
    • Investment asset balance (8 tiers)
    • Unrelated business income (7 tiers)
    • Accounting method (accrual, cash or other)
    • ASAE member (yes/no)
    • State (52, includes DC and PR)
    • Metropolitan area (36 different areas)
asae foundation s association 990 suite of tools
ASAE Foundation’s “Association 990”Suite of Tools
  • Association 990 - Key Ratios
    • Predefined reports – key ratios,

revenue and expense detail, and

balance sheet detail

    • Generated online
    • Sort functionality enumerated on the prior slide
    • Ability to export to Excel, Word or Adobe
    • Ability to print PDF copies of any Assn’s 990
  • Association 990 - Agenda Items
    • Drawn from the aggregate data, these slides (PDF and PPT) provide comparative data on policy, procedure and certain organizational measures
best average measure
Best “Average” Measure

Median – ½ respondents above; ½ below

Mean – sum of all cases / total # of respondents

Median is a better measure for average when the upper limit is theoretically infinite (e.g., number of members in reporting associations, annual budget for reporting associations), as the mean can be strongly affected by very high values.

2010 # Employees (Mean = 79.8 / Median = 9.0)

2010 Total Rev. (Mean = $3.5M / Median = $563K)

horizon upgrades contemplated
Horizon Upgrades Contemplated
  • Access to filed Federal Forms 990, similar to GuideStar
  • Quartile results
  • Association segments by industry/interest area (e.g., business/industrial, education, healthcare/medical, etc.)
  • Ability to create comparison groups
  • Drill-down functionality
  • Slide generator
  • Trend analyses functionality when multiple years of data are available
  • Addition of Federal Form 990 Schedules to the database (e.g., Schedule J)
identification of critical indicators key metrics
Identification of Critical Indicators(Key Metrics)
  • Financial Metrics
  • Non-Financial Metrics
what are your key financial metrics
What Are Your Key Financial Metrics

Total Contributions /

Total Unrestricted Contributions

Investment Income

Total Membership Dues / Non-Dues Revenue

Unrelated Business Income

Exposition $

Certification $

Publication $

For-Profit Subsidiary Dividends

what are your key non financial metrics
What Are Your Key Non-Financial Metrics

Number of Donors

Number of Members

Number of CE Hours Delivered

Number of Attendees

Number of Clients Served

Number of Certificants

basic ratios
Basic Ratios
  • Current = Current Assets (CA) / Cur. Liabilities
  • Quick = CA Less Inventory / Current Liabilities
  • Leverage = Total Liabilities / Total Net Assets
  • Dues Reliance = Member Dues / Total Revenue
  • Inventory Turnover = Sales / Inventory
  • Avg. Collection Pd. = AR / Sales Per Day
  • ROI = Income / Avg. Investment Balance
the nassp story

The NASSP Story

Using Financial Metrics -

Information is Power

national association of secondary school principals
National Association of Secondary School Principals
  • 25,000 individual members
  • 97 staff (92 FTE)
  • $23M budget
  • 501(c)(3)
  • Student programs serve over 30,000 schools and more than 1 million students
  • Own HQ building w/35,000+ sq. ft. – Reston, VA
slide46
National Association of Secondary School PrincipalsMulti-Year Financial Ratio ComparisonJune 30, 2010 Ratio Dashboard
slide49

Current Ratio

Total Liabilities -- $11,713,093

2.10

Total Net Assets – $5,582,436

Displays on the Dashboard

slide50
National Association of Secondary School PrincipalsMulti-Year Financial Ratio ComparisonJune 30, 2010

Debt to Equity

slide51
National Association of Secondary School PrincipalsMulti-Year Financial Ratio ComparisonJune 30, 2010
slide52
National Association of Secondary School PrincipalsMulti-Year Financial Ratio ComparisonJune 30, 2010