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Finance vs. Development

Last post 05-27-2008 10:47 PM by Alan Hejnal. 3 replies.
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  • 05-23-2008 10:04 AM

    Finance vs. Development

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    Last month's issue of Fiscal Fitness touched a nerve with a number of our readers. We featured an article by development professional Tony Poderis regarding the ongoing differences between the development and finance offices. Many readers seem to have strong feelings regarding this issue; some readers made their viewpoints known by drafting a response to the editor. The responses were well crafted and offered some very detailed insight into contrasting positions.

    In this month's issue of Fiscal Fitness, we are continuing the discussion and sharing a portion of these responses with you. Publishing letters to the editor is a new practice for Fiscal Fitness. Please let us know how you like this new format, and if you have any additional thoughts, opinions, or insights on this topic, please feel free to share them here.

    Do or do not. There is no try.

  • 05-23-2008 12:44 PM In reply to

    Re: Finance vs. Development

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  • 05-23-2008 3:08 PM In reply to

    • Anne Taylor
    • Not Ranked
    • Posts 3
    • Organization: Blood Center of Wisconsin, Inc

    Re: Finance vs. Development

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    Don’t forget that people give to other people, not to organizations or esoteric causes. In my organization, we do not offer memberships or sell stuff.  Our donors are not paying for services received or paying a bill.  They are giving a gift – that they can easily make to anyone they choose.  The responses published this week are predictable in that they reflect the Accounting point of view.  In fact, it is the GAAP that is making a transaction out of a gift.  All the concerns about auditors, controls, audit and scope qualifications indicate what is of primary importance to accounting.  Yes, controls are important.  They have a place, especially in cash receipts, but they come with limitations.  Compromise on both sides is needed to achieve mutual goals. Here’s my standard--never cash the check before thanking the donor.  We deposit checks the day we receive them and the same day put a thank you letter into the mail.  You know what?  If there isn’t time to thank the donor that day, I don’t think the check should be deposited. Think of this – what if a friend was getting married and the invitation said “Because of our concern that we get your gift as quickly as possible, please send your gift to our bank’s lock box department.  This way we can get the money into our account immediately.  The bank will open all the packages, too, and send the bride and groom a list of who gave what.” I was a financial analyst before making a career change to philanthropy.  I’ve been on both sides.  There is no basis for thinking that “trained accountants” somehow can process checks, charges and pledges better than a development department associate.  A skill-set can be taught.  But what you can’t have a “finance-trained staff” member do is cultivate the relationship with the donor who has made a connection with your organization due to the development department's work. 

    Thanks for letting me state my opinion.

  • 05-27-2008 10:47 PM In reply to

    Re: Finance vs. Development

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    I find it interesting that Jeff Hogan’s response to the article described it to be “accurate in assessment but presumptuous in its conclusions.”  His response in turn seems to presume that Finance has the inside track on the attributes cited—staff able to be trained in complicated processes, staff able to understand and comply with requirements, staff able to process gifts with minimal data entry errors, development of policies and processes in conjunction with external auditors, and so on.   My own experience is primarily in non-profit organizations in which Development and Finance are similarly in complete agreement about how the organization processes donations--except that the agreement is that Development gift processors handle those tasks!  Development gift processors handle those tasks with, I would dare say, comparable levels of training, understanding, compliance, and accuracy. I can’t specifically address the dynamics in a large national non-profit, which may have a limited number of fundraising initiatives, but in my experience in higher education, it is highly advantageous to have gift processors who are part of the Development organization, and who are therefore positioned have a strong understanding of fundraising activities and context that are integral to accurately interpreting donor intent. More to the point, successful fundraising builds on a rich context of information related to a gift: solicitations, proposals, recognition credit, vehicles, etc.  In my experience, the accounting-related aspects of gift recording are handled efficiently and accurately whether the recording is done in Development or in Finance, but to get the same level of attention to the fundraising-related detail when the gift recording is done by Finance is at best a challenge. That’s not to say the whole job couldn’t be done by Finance.  Different organizational structures can be successful, meeting the requirements of all the areas of the organization in different ways.  I just have yet to see it happen that way. Accountability requirements may lead to increasing separation of functions, and if that takes opening the mail and processing the deposits out of Development, I’m fine with that.  When it comes to the actual gift recording, though, gift processors within Development have a fine record of understanding gifts, performing accurate data entry, following approved procedures, executing complicated processes, meeting accounting requirements, addressing all the collateral fundraising-related aspects of the task, and doing it all with distinction, and I would argue that they too deserve our respect.  My US$0.02 worth.  Alan S. HejnalDirector, Advancement ServicesUniversity of Richmond

     
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