[nancy-d]

Thank goodness for organizations like Human Services Council, (for nonprofits), LiveOn NY (for aging network services) and United Neighborhood Houses (for settlement houses.) They are champions of the nonprofit sector. Both NYC and NYS are notoriously late payers on contracted services. Interestingly there are some contracts that do it right. We have one NYS contract that pays quarterly based on the previous quarter billing and it gets reconciled in the last quarter. Until this year they were giving us 40% up front as an advance until an agency went bankrupt and couldn’t pay back what they owed the state. Still getting paid each quarter is a blessing! I don’t think NYC or NYS will get it right on their contracts during my lifetime. But we have won a NYC “salary enhancements” (they won’t call it a COLA) and a NYS health care worker COLA.

[nancy-d]

I think the article is absolutely helpful in considering the pros and cons of endowments and reserves. I have had the experiences described in the article. A number of foundations will not fund us because we have an endowment. However, many foundations do fund us because our endowment signifies that we are stable and around for the long term. They see their grants as investments and they want the charity they fund to be around for the long term.

Three nonprofits in my sector went out of business in the past two years and left a void with no services in parts of the state. They had no cushion to weather the ups and downs of Covid or the cash flow problems of late government payments, We can afford to do business in New York City where the government routinely takes a year to register a contract and then expects us to bill for 12 months of service that we already provided. Charities that need to take out bank loans with interest to meet their cash flow obligations will never catch up and default and/or bankruptcy always loom.

I also believe that having an endowment and/or reserves is a rare privilege that should not be taken for granted or squandered and that I have an obligation to spend it wisely in emergency situations with the full oversight and approval of the Board.

[nancy-d]

Having both reserves and endowment gives me as the Executive Director/CEO some comfort and freedman to be innovative and timely in responding to needs. For example at the beginning of Covid when everyone needed to take their temperature, we distributed free “talking” thermometers to hundreds of our blind participants. We still distribute free masks and test kits. We eventually qualified for two PPP loans totally $3 million which kept us whole and were forgiven. Interesting that during the early years of Covid we lost more than 35% of our government income because we could not provide in home training services and one of our biggest contracts is outcome based. No outcome (achievement of goals) no payment. However our foundation funders were incredibly generous and flexible including changing program grants to general operations. It is the mix of funding, the 95 year history of VISIONS, the active and talented Board and an incredible staff that keeps us successful. We saluted our staff by giving everyone an extra day of pay that remained working at VISIONS throughout the pandemic. The Board recommended some type of recognition and the executive team suggested the day of pay rather than an extra day off since many of the staff don’t use all their paid time off.

Our bequests often come directly from the will of our Board, members when they die, a handful of our blind participants that have resources or their family members, and friends of our Board members. We have no staff dedicated to planned giving.

[nancy-d]

We are in the enviable position of having reserves that cover 1o months of operating expenses available in what we call Board designated reserves. It is money invested that can be tapped in an emergency of any type with full Board approval. We also have a large endowment with significant funds that cannot be touched in perpetuity based on donor restrictions but that are invested and the interest and dividends are used for operations. The amount withdrawn is 4.5% of the average value of the assets on December 31 for the previous five years . Five year average fairly stabilizes the withdrawal amount and allows us to eventually eliminate a bad year for investments. About 50% of our revenue is government, 40% from investment income and 10% from foundations, individual giving and special events on an annual budget of $12.5 million. We are lucky to occasionally receive bequests. We do not budget for it but it is added to our Board designated reserves when we do get a bequest which is how we created and maintain the Board designated reserves.

[nancy-d]

In addition to annual salary increases, we gave every staff member one day’s pay as a bonus for staying with us during the two years of Covid. We decided not to give an “extra” day off since many of the staff were not taking all their paid time off. In addition we pay staff $100 incentive for every Covid vaccine and booster shot since we require it of all staff (excluding staff with medical or religious exemptions.)