The NonProfit Times - December 1, 2008 - (Page 15)

ACCOUNTING fectiveness of the association on any given issue with any of its actions doesn’t diminish the usefulness of trade associations. The biggest difference between an advocacy membership and a trade association membership is that trade associations form for the purpose of benefiting their member corporations by influencing external parties such as governments. Advocacy associations, on the other hand, usually have an implied intent to influence external parties on behalf of a broadly defined class of individuals. TRADE ASSOCIATION MANAGEMENT TASK PROFILE Trade association membership usually costs significantly more than advocacy or cultural memberships because it is a business-to-business model. In any given industry there are likely to be fewer companies interested in trade association membership than there are individuals amenable to an advocacy membership. This makes the member management task simpler, at least to the extent that it requires fewer transactions per member. Also, the individuals designated to handle the membership on both sides tend to share a minimum level of sophistication, which makes the transactions flow more smoothly. In trade associations, member dues are the third rail.As with taxes, no one wants to see their dues payments increase, particularly if the people in the company who are active in the trade association don’t have full authority to pay for it. So trade associations must either be in a booming industry where all parties are growing rapidly or they must find substantial other revenue streams. This is why trade associations frequently get into activities like conferences, training, and publishing. Even if these activities lose money, they usually cover their share of overhead costs and support a good portion of the staff.At the same time there is always member churn as companies enter or exit the industry,so the association has to have at least a minimal marketing capability just to replace members.The ancillary activities and the constant marketing are essentially mechanisms for buffering against inevitable swings in memberships so as to provide the association with some level of stability. Organizations offering memberships must have a clear idea of their membership model. Different models require different things of the sponsoring organization. Membership revenue may be unrestricted but it isn’t free. NPT Thomas A. McLaughlin is a national nonprofit management consultant with Grant Thornton LLP in Boston. He is the author of the book Nonprofit Strategic Positioning (John Wiley and Sons, 2006).His email address is thomas.mclaughlin@gt.com Continued from page 13 whether or not subject to an enacted version of UPMIFA, must make additional disclosures in their financial statements under FAS 117-1. These additional disclosures include: • The governing board’s interpretation of the law(s) underlying the net asset classification of the donor-restricted endowment funds; • The organization’s policy for appropriation of endowment assets for expenditure; • The organization’s endowment investment policies, including a description of the organization’s return objectives and risk parameters, how those objectives relate to the organization’s endowment spending policy, and the strategies employed for achieving those objectives; • The composition of the organization’s endowment by net asset class at the end of the period, in total, and by type of endowment fund, showing donor-restricted endowment funds separately from board-designated endowment funds; and, • A reconciliation of the beginning and ending balance of the organization’s endowment, in total and by net asset class, including, at minimum, the following line items (as applicable): investment return separated into investment income (for example, interest, dividends and rents) and net appreciation or depreciation of invest- ments, contributions, amounts appropriated for expenditure, reclassifications, and other changes. Illustrative examples of these required disclosures can be found in Appendix C of FAS 117-1 on FASB’s Web site, http://www.fasb.org/ APPLICATION AND TRANSITION If an organization initially applies this FSP to donor-restricted endowment funds in existence when UPMIFA is first effective, any resulting net asset reclassifications should be reported on a separate line on the statement of activities for that period, outside a performance indicator or other immediate measure of operations. If an organization initially applies this FSP subsequent to the period in which UPMIFA is first effective, the reclassification should be reported in those financial statements in the earliest comparative period presented for which UPMIFA was effective. If the period in which UPMIFA first became effective is not presented, the effects of the reclassification should be reported retrospectively in the earliest period presented. NPT Mark J. Piszko is a partner in the Not-forProfit Services Division of O’Connor Davies Munns & Dobbins, LLP in New York City. His email is mpiszko@odmd.com 2009 REGISTER BY 12/5/08 & SAVE $100! Washington Nonproﬁt Conference Rising to the Challenge: It’s a Whole New Day January 29 – 30, 2009 Renaissance Washington, DC Hotel Washington DC Special Pre-Conference Workshop on January 28 Don’t miss this critical conference where thought leaders and nonproﬁt direct marketing experts will share key strategies for tackling the tough challenges currently impacting nonproﬁts. www.nonproﬁtfederation.org Mention Key Code NPT when registering. DECEMBER 1, 2008 THE NONPROFIT TIMES www.nptimes.com 15 http://www.fasb.org/ http://www.nonprofitfederation.org http://www.fundraisinginfo.com http://www.nonprofitfederation.org http://www.nptimes.com

Table of Contents Feed for the Digital Edition of The NonProfit Times - December 1, 2008

The NonProfit Times - December 1, 2008 Contents A Nation of Volunteers Nonprofits Start Franchising Page 4 Tidings Of Good Cheer Donor-Restricted Endowments Membership Revenue Isn’t Free Divining A Skills Set Special Report: 2008 The Year in Review The Revised 990 Giving And The Economy Annual Buyers Guide Advertiser Index NPT Jobs Resource Directory

The NonProfit Times - December 1, 2008

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