Why We Need Your Money: An Accountant’s Perspective
By Allen Butt - Business & Operations Director
A cynical person could make an argument against donating to an organization like Canyon Creek Services by identifying how small their individual contribution would be in comparison to the tremendous amount of income that is received from government grants. Indeed, federal grants make up the majority of CCS’s revenue, with state grants coming in second place. Private grants and individual donations make up a much smaller portion of the organization’s total income.
Why give, if the effect of your gift is miniscule in comparison to the operational budget of the organization?
Well, as the Business and Operations Director of Canyon Creek Services, I am happy to share with you the “inside scoop” of how our organization’s budget works, to see how hilariously fallacious that line of reasoning is in practice. Come with me, and let us learn together, the wonderful world…of budget!
Our single largest source of income comes from VOCA grants. VOCA stands for the “Victims of Crime Act”, which allows the federal government to distribute criminal fines to organizations who serve “victims of crime.”
Long story short, your taxes don’t pay for us—criminals do! Sounds like a good system, but this money comes with an unfortunate downside: rules. VOCA funding can only be spent on very particular things. My favorite example of one such oddity is that we cannot spend VOCA money on “prevention.” The logic goes: if you spend VOCA money to prevent future crime, you are not assisting ‘victims of crime’—you are only preventing the existence of future ‘victims of crime.’
Another fun (accountants use the term “fun” almost solely in ironic fashion) rule is that only 10% of federal funds can be put towards administrative costs. Since the majority of our funding comes from federal grants, we are required to operate in an extremely lean fashion. Can you think of any other industry where an organization is asked to run at a 10% administrative rate? Of course not—that would be insane!
Furthermore, many of our other grants at the state or private level are earmarked to be spent for very particular things. For example, we receive a grant from the Allstate Foundation called “Purple Purse” which is designed to aid victims of financial abuse. They provide funds for our Case Manager, Ciarra Parry, to teach clients about personal finance, and to provide savings matching and debt repayment services for clients. This is a wonderful grant that serves an incredible purpose, but no penny of it can go towards CCS’s administration.
So where on earth do we get the money we need to pay for our few administrators? Or to pay rent, or utilities for the shelter, or insurance, or office supplies, or bank fees, or to set up fundraisers or events? How will we ever be able to move to a new office space so that our advocates can actually have desks and phones and private meeting spaces instead of being crammed into a common space sardine-style?
That, dear reader, is where you come in! Although some of these administrative costs can be covered by particular grants, the truth of the matter is that we, as an organization, are desperately reliant on private donations and grants.
But wait, there’s more! Most of our grants (indeed our 5 largest grants budgeted for next year) are “reimbursable” grants. When we “receive” one of these grants, we don’t actually receive any money—we are given a promise that, should we spend our own money according to their stipulations, they will reimburse us for those costs, up to the promised amount.
How are we capable of spending out money for clients and then waiting for months (many months in the case of quarterly grants) to be reimbursed?
Yes, savvy reader, you have guessed my point: we need to receive as many dollars as possible from non-grant sources in order to not constantly be in debt. If we want to have any sort of reasonable cash position without having to dip into a line of credit every month while we wait for grant reimbursements, we need to be receiving some money no-strings-attached.
The ultimate goal of these words is to show you that your contribution to an organization such as Canyon Creek Services matters. It makes a legitimate difference, one that everyone here in the office can feel. Even if the number of dollars is small in comparison to the dollars we receive from our federal grants, these dollars are highly meaningful and specialized, and they are fully appreciated.