{"id":11693,"date":"2012-09-11T16:54:37","date_gmt":"2012-09-11T20:54:37","guid":{"rendered":"\/news_blogs\/john\/?p=11693"},"modified":"2023-12-20T15:30:25","modified_gmt":"2023-12-20T20:30:25","slug":"whos-telling-your-story","status":"publish","type":"post","link":"https:\/\/cccc.org\/news_blogs\/john\/2012\/09\/11\/whos-telling-your-story\/","title":{"rendered":"Who&#8217;s Telling Your Story?"},"content":{"rendered":"\n<p>How your ministry\u2019s <em>story<\/em> is told&nbsp;affects its reputation. If&nbsp;you don\u2019t tell&nbsp;your story,&nbsp;someone else will. Will it be Canada Revenue Agency? Imagine Canada? A reporter? A blogger? An urban legend email? Someone with a grudge? Who should&nbsp;lead&nbsp;<strong>how your reputation is shaped?<\/strong>&nbsp;It must be you!<\/p>\n\n\n\n<p>Unfortunately, there are people who think charities are ripping off the public. Executive compensation. Fundraising costs. Overhead. Lack of accountability and transparency. These are all issues that are&nbsp;alive and well&nbsp;online and in the press. Yes, there are some &#8216;bad apples&#8217; in the charity sector, just as there are in every sector and among every demographic. But&nbsp;the vast majority of charities&nbsp;have passionate people doing very effective good work&nbsp;quite efficiently, and the world is a better place&nbsp;because of&nbsp;them.<\/p>\n\n\n\n<p>The problem is that we don&#8217;t do a good job telling the public what we do. I&#8217;m on an Imagine Canada committee&nbsp;that will be meeting soon to discuss how to develop a sector narrative that tells the public how&nbsp;charities&nbsp;contribute to the public good.&nbsp;This is PR for the entire sector that I fully support.<\/p>\n\n\n\n<p>Now, what about PR for your ministry? Anyone is&nbsp;free to comment or critique your ministry, but you should get your story out in the open so there is always something official from your ministry that people can check if they hear something negative about you. Equip people to speak up on your behalf by giving the public a realistic self-assessment of both your results and your anticipated future.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Your Story Is Already Being Told by Someone Else<\/h2>\n\n\n\n<p>There are numerous charity monitoring groups around the world, and although most are not active in Canada they are harbingers of what we can expect over time. Right now though, information about your charity is available through the CRA. It reports only what you disclosed on your T3010 information return, so there are no editorial comments in its report.<\/p>\n\n\n\n<p>However, when you prepare the T3010 each year,&nbsp;you are likely thinking only of regulatory compliance&nbsp;issues, not about donors or <strong>public relations.<\/strong>&nbsp;You may not realize how easily the factual&nbsp;information in the T3010 can be&nbsp;misinterpreted. I&#8217;ll give some examples related to CCCC below, but first, here&#8217;s where you can find what is being reported about your ministry:<\/p>\n\n\n\n<p>Canada Revenue Agency:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><a title=\"Link to CRA's charity search page\" href=\"https:\/\/apps.cra-arc.gc.ca\/ebci\/hacc\/srch\/pub\/dsplyBscSrch?request_locale=en\" target=\"_blank\" rel=\"noopener noreferrer\">Click here <\/a>and search on your charity&#8217;s name<\/li>\n\n\n\n<li>Click on your charity&#8217;s name and then click on T3010<\/li>\n\n\n\n<li>Click on <em>Quick View<\/em> for the most recent fiscal&nbsp;year<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Example of How Factual Information Can Be Misinterpreted<\/h2>\n\n\n\n<p>Here&#8217;s how the T3010 can innocently mislead the public. Our T3010 for fiscal 2011 showed we raised almost $1.3 million with a fundraising ratio of 0% and administration ratio of 6%. That looks awfully good, so that&#8217;s in our favour. However, it also shows that we had a surplus of about $358,000, leaving the impression that we are raising more than we need and are hoarding cash rather than spending it on charitable programs. The amounts reported are accurate, but the interpretations are not. Here&#8217;s the rest of the story that the T3010 doesn&#8217;t tell:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>We had no fundraising costs because we didn&#8217;t solicit any donations.&nbsp;However, if members are not set up to receive gifts of securities, they send their donors to our&nbsp;Community Trust Fund. We receive and receipt the gift, convert it to cash and send the proceeds&nbsp;to the member. Although it looks like we did fundraising, we didn&#8217;t. And neither do we give grants.<\/li>\n\n\n\n<li>Administration costs are relatively low and they should be, because&nbsp;we are a centralized organization working only in Canada with no special complexities. But is&nbsp;6% high enough? Maybe for a charity in maintenance mode, but maybe not&nbsp;for an organization that wants to grow, expand services, and be on the leading edge.&nbsp;Strategy creation, forging partnerships, and&nbsp;organizational development&nbsp;are all administration costs, so perhaps this ratio should be 8%.&nbsp;<em>I wouldn&#8217;t want 6% to become the norm for&nbsp;us&nbsp;if it means we are short-changing our future for a low ratio<\/em>.<\/li>\n\n\n\n<li>Our surplus of $358,000 is not what it seems.&nbsp;The operating surplus was only $107,000 and the remainder of the surplus came from the Community Trust Fund, which received donations&nbsp;that we have not yet been told how to disburse. That&#8217;s not our money. Furthermore, of the $107,000 surplus, $44,000 was <em>unrealized<\/em>&nbsp;gains on investments, so it&#8217;s only a paper surplus until the investments are sold. And then of course, the financial statements and the T3010 make no mention of what the remaining $63,000 is intended for. Are we saving for a rainy day or a specific project? The answer is that we are using accumulated surpluses for major projects (such as the development of a completely new website that is now underway).<\/li>\n\n\n\n<li>Finally, the T3010&nbsp;makes it look like we had over $3.9 million in cash and investments.&nbsp;We look rich indeed!! But that isn&#8217;t true (sigh). $2.4 million belongs to the Community Trust Fund, not us, and we can&#8217;t use it. $745,000 is unearned revenue that we will live off of for the next nine months. $234,000 belongs to the Legal Defense Fund, which we can&#8217;t use for operations either. We have a reserve of several months of operating expenses that we must keep ($295,000) and a major project in fiscal 2013\/14 that will use up most of the remainder. Our fiscal year end&nbsp;of March 31 always shows lots of cash because we&#8217;ve just received our membership dues, but if our year end were October 31, you&#8217;d see a vastly different financial position!<\/li>\n<\/ul>\n\n\n\n<p>While the particulars of our financial statements&nbsp;may be&nbsp;different from yours, can you see how people could get wrong ideas from&nbsp;the financial statements and T3010?&nbsp;We&nbsp;need to make sure that doesn&#8217;t happen. We can do that by writing a management commentary on our results and prospects. In other words, we tell our story.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">How to Tell Your Own Story<\/h2>\n\n\n\n<p>As part of your annual report you should prepare a <strong>management discussion and analysis<\/strong> (<strong>MD&amp;A<\/strong>) of the past year&#8217;s results. At the CCCC conference&nbsp;coming up in a couple of weeks, I&#8217;ll be delivering a double workshop on how to write an MD&amp;A. I&#8217;ll&nbsp;take participants through each of the following points with detailed suggestions and they&#8217;ll complete a workbook and walk out with a preliminary draft of their own MD&amp;A.<\/p>\n\n\n\n<p>The Canadian Institute of Chartered Accountants says the principles behind&nbsp;the MD&amp;A are that it should:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>enable readers to view the organization through management&#8217;s eyes<\/li>\n\n\n\n<li>supplement and complement the information in the financial statements<\/li>\n\n\n\n<li>be complete, fair and balanced, and provide information that is material to the decision-making needs of users<\/li>\n\n\n\n<li>have a forward-looking orientation<\/li>\n\n\n\n<li>focus on management&#8217;s strategy for generating value over time (or in our case, our strategy for generating mission-related results over time)<\/li>\n\n\n\n<li>be understandable, relevant, and comparable<\/li>\n<\/ul>\n\n\n\n<p>The general framework for the management discussion and analysis has five parts:<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li><em>Core businesses and strategy<\/em> &#8212; for charities that means what&nbsp;you do and how you are structured (major divisions and so forth). Assess significant factors and trends that shape your key strategies.<\/li>\n\n\n\n<li><em>Key performance drivers<\/em> &#8212; the few external and internal performance drivers that are critical to successfully implementing your strategies and achieving your goals, along with the key performance indicators<\/li>\n\n\n\n<li><em>Capability to deliver results<\/em> &#8212; address the resources needed to deliver the strategy and achieve results. This includes financial, human, tangible, and intangible resources such as systems, leadership, and work processes.<\/li>\n\n\n\n<li><em>Results and outlook<\/em>&nbsp;&#8212; an insightful explanation of the last year&#8217;s performance against your strategy and goals. Review trends in the key performance indicators and explain them. You would also talk about the likely future in this section.<\/li>\n\n\n\n<li><em>Risk<\/em> &#8212; what are the major risks for the organization as a whole and what is your strategy to deal with them.<\/li>\n<\/ol>\n\n\n\n<p>Of course, not everything should be made public, so some wisdom is needed to determine what the public report should include. In general, you want to be as open as possible without disadvantaging yourself. Show how your strategy, results and financial statements fit together.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">A Great Example<\/h2>\n\n\n\n<p>World Vision International produces a very complete <a title=\"World Vision International's accountability report\" href=\"https:\/\/www.wvi.org\/publications\/annual-report\/accountability-report-2018\" target=\"_blank\" rel=\"noopener noreferrer\">accountability report<\/a>. It is far more comprehensive than what I&#8217;m describing here, but I think it is worth reviewing to see how well such a report can be done and it will certainly give you some ideas for your own report.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">\u00a0Key Takeaway<\/h2>\n\n\n\n<p>Once you have written the MD&amp;A, you have an informative document to post on your website, and I&#8217;m sure a lot of the material will find its way into your fundraising literature. It will also help you set your plans for the next year. As I prepare for the workshop, I&#8217;m writing an MD&amp;A for CCCC and will post it on our website and Charity Focus when it is ready.<\/p>\n\n\n\n<p>If you have one that you think would be helpful as an example, why not use the comment form to link us to it?<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Like businesses, charities should include a management discussion and analysis in their annual reports to better inform donors of their strategies and choices. <a href=\"https:\/\/cccc.org\/news_blogs\/john\/2012\/09\/11\/whos-telling-your-story\/\" class=\"linkbutton\">More<\/a><\/p>\n","protected":false},"author":2,"featured_media":11695,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"ts_fic_featured_image_caption":"A man speaking into a microphone. Used with permission.","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[559,560,221],"tags":[113,76,56,79,116],"series":[],"class_list":["post-11693","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-exemplary","category-impeccable","category-leadership-organizational","tag-accountability","tag-donor-acquisition","tag-leadership-responsibility","tag-organizational-evaluation","tag-storytelling"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Who&#039;s Telling Your Story? - CCCC Blogs<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.cccc.org\/news_blogs\/john\/2012\/09\/11\/whos-telling-your-story\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Who&#039;s Telling Your Story? - CCCC Blogs\" \/>\n<meta property=\"og:description\" content=\"Like businesses, charities should include a management discussion and analysis in their annual reports to better inform donors of their strategies and choices. 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