Put Money in the Bank
Andrew L. Estep, CAE
We all know the value of saving money. Cash in the bank allows us to take vacations, pay college tuitions, retire, purchase a home; it allows us to plan, to hope, to dream. It can be useful to think of money as energy. A savings account is a stockpile of energy that can be expended to achieve a goal.
Businesses save money for various reasons including planned capital purchases, to facilitate growth and expansion, and disaster preparedness. Nonprofit organizations can save money for the same reasons. However, nonprofits have to be careful with how and why they save. While for-profit businesses have to answer to owners and stockholders, nonprofits have to answer to a broader range of stakeholders including the general public.
If a nonprofit with an annual budget of $1 million has $10 million in the bank it is obvious that something is probably out of whack. The board of directors of this organization had better have a clear and reasonable explanation for holding such incredible reserves.
A less obvious but equally dangerous situation is the $1 million organization that has $10,000 in savings. On the face of it, it may seem that as a "nonprofit," the organization should be frugal and run lean. However, without adequate reserves a nonprofit can easily be derailed and careen into insolvency.
How much is adequate? When planning personal savings, we think in terms of interrupted income. How long could we survive a loss of income? For a nonprofit, the same question is asked. At home, we are looking at one or two income streams. For the organization, we also count income streams. We plan for interruptions of that income.
LWHRA is in an enviable position. For the last few years the board of directors has guided us through growth and prosperity despite the difficult economy. We now have a good reserve. The board is considering how much to formally set aside to protect the association from the unforeseen, now and in the future.
Seeking Symposium Volunteer
Claudia Vietzke Jorgenson, SPHR
The 2014 Symposium planning committee is looking for an energetic and committed volunteer to help us create the continuing education program for next year's conference. With the support and assistance of the LWHRA staff and the Symposium committee, this volunteer will set the theme and tone of the conference continuing education sessions. The volunteer will lead the effort to solicit and vet presentations. Working closely with staff, the volunteer will manage presentation information. Working with the chapter's Program committee, the volunteer will apply for HRCI credit for the conference. The volunteer will participate in regular committee meetings held both in-person and via conference call.
If you are interested in joining a very dynamic and enjoyable committee, complete the application found on the chapter Volunteer webpage. Contact me with any questions at firstname.lastname@example.org or (206) 268-2435.
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