Vacations are assumed to be “skippable” but it’s incredible how important these are for us — our hearts, souls, and minds — , even if you only look at it from a work productivity sense. I was reminded when I finally took a break the creativity flowed over. I accomplished much because I had the freedom from work to see a better vision.

Pulling out of the trees to see the forest at large, getting to those other things you’ve always wanted to, or simply resting your mind to ready yourself to jump back in. It’s all so easy to understand, yet I rarely do it. When I do, I’m terrified of all the worst case scenarios that “will” go wrong.

Good thing vacations help prove me wrong. I’m ready to dive back in. Get set. Go.

Originally published at

Back into the swing of things

It’s been quite a while since I’ve added anything here.

Much of that is because I felt like I had nothing worthy to share, to give out. There’s already plenty of noise out there, I told myself. I think the deeper reason is because I was afraid to open my mouth until I absolutely knew I had something valuable, something another person would say “Aha! Yes, you have proven your worth.” How wrong of me to wait — instead of just jumping out and hitting a couple bumps along the way. The irony, of course, is that now I have that sense that I “know stuff” about various subject matter, but even still I hope — and plan — to share and pose thoughts and reflections on topics on only have an inkling about.

When we can be open about our insecurities of admitting that we don’t know, we have made progress. That is one thing I feel the freedom from. May this only be the start.

This is my reentry. While I hope this is valuable for others, my goal is to learn much more myself.

Originally published at

Gifts-in-Kind — More difficult for Small NPOs — and why accurate valuations are so tough to come…

Another post a guest wrote for Here’s the link:

Valuing gifts-in-kind is not an easy task. Nor is it quick.

There are not-for-profit organizations that appear to be aggressive with GIKs valuations — a quick internet search will reveal that truth. Not convinced? Ask the IRS for their opinion. Then there are others that take whatever value they can find because they lack the capability — they don’t have the know-how.

This post was written with smaller organizations in mind as they usually do not have the expertise, capacity, and staffing to the extent of their larger brethren.

To record GIKs, it seems there are three choices for management (and, by extension, the auditors) on reporting values:

Accept the donor’s stated value,

Don’t record a thing since it appears to be an overstatement, or

Do your homework and come up with a new amount

Hmmm…Choices. Looks like we need to create some methodologies to make a decision!

The first option: I have seen some donor-provided valuations for certain donated goods that seem unusually high, perhaps absurd. Have you?

For the second item, it may be ok to not record, but what if the amounts are actually substantial? I can think of a few risks here.

The third point is the most difficult as management and the auditors must have the time, energy, desire, and knowledge to advocate an accurate measurement. Countless hours could be spent here.

You have to take into consideration fair value measurements, the exit price, where the goods are ordered/picked up, where they will be shipped to (different country, free/costly shipping), expiration dates of products, how much it would cost to acquire those goods in whatever city/state/province/country they will be used in, etc. Pretty simple stuff, huh?

Moreover, unless the organization receives only one or two different products or those are the only substantial GIKs, pricing will have to be examined for many items. This chews up more time.

Then, after careful research has been done, you will have a range of estimates to choose from. You have to pick one.

Do you pick the highest, the lowest, the average, the most common occurrence, the 85th percentile? When you pick one, why did you pick it? What’s your justification?

(Sideline thought: Now, I can imagine management and auditors getting a little squeamish, can’t you? After all, we love being able to pin down numbers because it makes us more comfortable. Something that is grey, or vague, or ambiguous, or questionable worries us, keeps us up at night, and makes us wonder.)

Time for action! A decision must be made, so, which one do you pick?

The conversation

Let’s listen in as the VP Finance/CFO/controller/head bookkeeper/HR manager (that’s usually one person, not five, by the way) thinks about what to do:

“I like the donor stated amount…but, it does seem a little high. What’s the likelihood of someone questioning us?

“Do we have time to review the facts and figures? If I do that, what other projects will be neglected? I’ve got so many deadlines this week. Gotta’ get back to the attorney this afternoon for the next step since we decided yesterday it’s time to fire that guy.

“Let’s see what I could do with those three options. What will happen?

“Purely by the amount of work, I want to take the donor’s number. It’s the quickest and easiest. But…then we need to consider the dangers because the donor is biased to overstate, so much media attention has been calling attention to overstatement, and the media, rating agencies, and attorney generals are all watching.

“So maybe zero is the safe bet. But if the amount is large, then it truly understates revenues. And program expenses. That is also incorrect. And that bothers me somehow.

“OK, fine. The donor number flunks the smell test and the dollars are too big to ignore.

“Looks like a mountain of work. I’ll pull together my own figures and estimate the total.

“Wait! Do we really want to get into all that work for these few GIKs, after all?

“Maybe I should stick with the donor’s number or write it all off, after all.

“But still there’s going to be more later this year and next.

“There’s so many factors, like supply/demand, expiration dates, shipping costs, geography of where the goods came from, and where they will be used that have such a big impact on prices of GIKs from one year to the next. How can I stay on top of all those valuations? How can I get consistently reasonable and accurate figures from a process so complex and difficult?

“And how do I explain it to the auditors?

“Maybe I can just get close enough.

“Maybe we should only accept cars, boats, and RVs? Maybe small things like old computers that don’t have much of a value. Forget the rest of it. That’s simple and easy, right?

Valuation is even more difficult for small organizations.

Originally published at

What about Underreporting Gifts-in-Kind?

I had originally published this on a fellow CPA’s blog ( a while back but am reproducing it here on my blog. Here is the link to the original post:

There has been quite an amount of discussion, articles, and consideration given to recording gifts in kind.

However, I would like to ask nearly the opposite question: what about organizations that don’t record gifts in kind?

My background is that I am a CPA and have been working in the not-for-profit auditing world for seven years. I have noticed that there seems to be as many ways to interpret and record gifts in kind as there are kinds of GIKs.

One main thing I have seen is that there is a common GIK theme for many not-for-profits: they do not record them.

Or if they do record them, they only record a portion (anywhere from 5% to 80%, which is quite a range!) of the GIKs.

From my perspective, the NPOs that neglect in recording GIKs is correlated to the size of the organization. Thus, the smaller the organization, the less likely they will record the items.


  • time-consuming
  • difficulty in obtaining proper evidence or value of items
  • infrequency of receiving GIKs
  • a lack of procedures or policies
  • lack of knowledgeable staff who know how to take care of those items

However, for the medium to large entities (I will refrain from speaking about the very large, multi-national, billion dollar ones), I have noticed that, at times, they will record many items, but because some of the donated items are seemingly ridiculously valued by the donor, or because a timely valuation is difficult to obtain, or it was donated at the end of the year and they lacked the time to research the value, or there isn’t time to obtain information from the donor, these items were not valued.

So then, does that mean that because they are underreporting their GIKs that they should be investigated by the IRS? By watchdog groups? By the public?

How would anyone know that an organization is underreporting their GIKs? After all, how do you find something that is missing and you didn’t know existed?

Can we simply chalk all this up to accountants and their affinity for being conservative with numbers?

I think there are at least two main objectives for smaller not-for-profits regarding GIKs.

One, providing a reasonable financial representation so the readers can receive some sort of snapshot of the organization’s health and activities, keeping in mind financial statements are a limited view of the organization.

Two, providing comparability with other not-for-profits by using various metrics such as financial trends and ratios.

Thus, excluding GIKs on the first objective, albeit skewing the financial statements, still grants the reader a basic understanding.

However, for the second objective, excluding GIKs can cause repercussions and, dare I say, unintended consequences?

A variety of metrics are used by groups such as Certain metrics also must be met for an organization to continue soliciting funds in particular U.S. states. By including or excluding significant GIKs, these ratios could move an organization between a “fair” or “excellent” rating. If substantial, omitted GIK could be the difference between continued or barred fundraising efforts in states.

So with all that said, is there an issue with some organizations not recording GIKs? Does it matter as long as they can continue operating and receive funding?

If we should care so much about over reporting donations, should we care, even slightly, about under reporting these gifts as well?

Originally published at


Hello. And welcome.

Though I fully intend to not publish weekly, yet I hope to publish when I have time and something meaningful or helpful to say. Several areas of interest or expertise include:

– Accounting

– Non-profits

– Economics

– the state of California (as a whole. The good and bad)

– Theology

I realize there are several divergent areas listed. I do not expect everyone to be excited about each of them equally, please feel free to read what you enjoy.

Originally published at