Houston nonprofit sector leads country, study shows
Published date | 01 November 2016 |
DOI | http://doi.org/10.1002/nba.30251 |
Date | 01 November 2016 |
NOVEMBER 2016
7
NONPROFIT BUSINESS ADVISOR
© 2016 Wiley Periodicals, Inc., A Wiley Company • All rights reserved
DOI: 10.1002/nba
Industry News
Nonprots stressing over compliance
with new nance rules, regulations
Nonprot executives are increasingly concerned
about compliance with the various nance-related
rules and regulations that govern the sector, according
to new research by nonprot software rm Abila. The
report, coming on the heels of new federal rules on
overtime pay, deferred compensation and new account-
ing standards for charities, highlight the headaches
such changes can be for the nation’s nonprots.
Key ndings from the report include the following:
• Managing the complexity of multiple revenue
sources is a major challenge. According to Abila, man-
aging money from multiple sources—each with their
own rules and restrictions—is very complex. This was
cited as the biggest nancial challenge by nonprot
nance professionals surveyed.
• Compliance is a cost burden. Almost two-thirds of
nonprot nance professionals report that compliance
has become more burdensome and costlier in recent
years, and almost a quarter say they spend 10 hours a
month on compliance alone. Further, about half think
their organization’s growth will just lead to increased
compliance challenges.
• New rules and regulations cause dread. According
to the report, nonprot nance staff stress about the
implementation of new rules and the impact they will
have on the organization, including the possibility it
will increase compliance costs.
• Fraud is an ongoing concern. While the majority of
organizations put signicant effort into fraud prevention,
including separating duties that need to be separated
to prevent fraud, just 38 percent say members of their
management and board of directors are very educated
on how to avoid fraud, and 34 percent say their orga-
nization undertakes actions that put it at risk for fraud.
• Audits are time-consuming. More than half of
nonprots say they require more than two weeks to
prepare for an audit, and that burden is compounded
by multiple audits in a year, which some 36 percent of
nonprot nance professionals claim they face.
“Any time there are rules and regulations changes, there
are added costs—both in terms of time and money—
for nonprot organizations,” said Dan Murphy, senior
manager of fund accounting strategy for Abila, in
announcing the research. “Maintaining compliance,
mitigating fraud and preparing for audits add even more
layers of complexity for organizations. We found there
are a number of areas where nonprot organizations
need to sharpen their focus, better equip their teams with
specialized training and technology and ensure they are
For the second year in a row, Houston, Texas, leads
the nation when it comes to the performance of its non-
prot sector, according to a study by Charity Navigator.
In its study, Charity Navigator compared the
median performance—both nancially and in terms
of accountability and transparency—of the largest
nonprots in the 30 largest metropolitan markets of
the country. Houston took the top spot, followed by
St. Louis; Tampa/St. Petersburg, Florida; Dallas;
and San Diego. In contrast, the lowest-rated were
Colorado Springs, Colorado; Pittsburgh; Seattle;
Indianapolis; and Cincinnati at the bottom.
According to Charity Navigator, Houston led the
eld in a number of categories, including the level of
contributions its nonprots garnered for the year, at
$4.3 million, followed by Los Angeles ($4.1 million)
and Dallas ($3.8 million). That’s compared to the na-
tional median of about $2.9 million, the study showed.
“The consistently exceptional performance of
Houston charities conrms what people in Houston
already know,” said Michael Thatcher, president and
CEO of Charity Navigator. “The city’s number-one
ranking in our study is directly related to nancial
strength and ethical behavior exhibited by Houston
charities, a result of the hard work of both informed
donors and responsible nonprot leaders.”
To view the full rankings, visit http://www.charity
navigator.org. ■
Houston nonprot sector leads country, study shows
(See RULES on page 9)
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