Navigating Non-Profit Finances: Similarities and Differences

Announcer  00:04

Welcome to the Treasury Update Podcast presented by Strategic Treasurer, your source for interesting treasury news, analysis, and insights in your car, at the gym, or wherever you decide to tune in.

 

Craig Jeffery  00:18

Welcome to the Treasury Update Podcast. This is Craig Jeffery. On today’s podcast we have Kevin Peak, who’s with Truist, and Stephanie Villatoro, who’s with International Justice Mission. Welcome to the podcast, Kevin and Stephanie.

 

Kevin Peak  00:32

Hey, Craig, glad to be here.

 

Stephanie Villatoro  00:34

It’s a pleasure to be here, Craig.

 

Craig Jeffery  00:36

It’s so good to talk with both of you. You know, we we’ve had some conversations in preparation for this, you know, nonprofit organizations have similarities and differences with for profit organizations. And it should be a really fun conversation talking about these differences. Truist is obviously a bank and International Justice Mission is a nonprofit. Yeah. So as we start this discussion, I thought we could begin on the cash management side. What are you finding that’s the same and what’s different for operational cash management? Maybe Stephanie, you might want to start first on talking through some of those. And then Kevin, you can jump in. But we’ll start with cash management, we’ll move through things like borrowing investments, all the way down to stewardship, data privacy, as well. But Stephanie, if you could start us off.

 

Stephanie Villatoro  01:25

Certainly, Craig, thanks for having us today. I appreciate being able to give back on these podcasts because Strategic Treasurer does so much to educate the treasury world at wide. But from a cash management standpoint, between for profit and nonprofit, the similarity is cash cycles, you have a cash cycle no matter what within an organization or a company. And that varies depending on your product. From a nonprofit standpoint, you’re highly dependent upon constituents that are donors. And that cash cycle can be very volatile and has a lot of seasonality. So that’s a big difference in how you intake money and having to have more options for in taking donations. It’s not just you know, an ACH, or wire or a cheque. There are many different forms of donations that support an organization. Those are non cash donations, those are securities, those are sometimes 401, K’s or even living wills, when someone passes away, we we get donations that way as well. So the biggest difference on the cash management, I would say it’s on the receipt side. I mean, you’re doing vendor payments, just the same as you would do at any organization that’s very similar in fashion. But the biggest differences is definitely on the the intake receipt side.

 

Craig Jeffery  02:51

You talked about seasonality is that is that tend towards the end of the year as people are figuring out where they’re going to give or is there some other are there some other elements that impact that type of seasonality that you’ve seen that

 

Stephanie Villatoro  03:05

seasonality definitely is higher from the standpoint of in taking the majority of donations that you’re in when everyone’s trying to you know, plan for their their taxes for the following year. And wanting to get those last minutes donations in. So we do have a large intake that starts around mid November through the end of the year. And some of that flows in past since January. Because we go by postmark date if it’s a check, the other seasonality I would say as grants and when those come in, so those are larger dollar less frequent. And they can come around any time of the year for different projects that we might be working on.

 

Craig Jeffery  03:49

Interesting. Yeah, as you talked about accepting different types of payments like 401k is living wills or or securities being transferred over. You know, one of the things that maybe not this year, but in prior years, there’s certainly been there was certainly was a lot of money made on digital currency is did you have to be as flexible and flexible enough to accept things like that. And what about furniture and real estate?

 

Stephanie Villatoro  04:15

That we do accept non cash donations like real estate, an example would be a vehicle donating a vehicle and we have a third party that sells it and that goes towards the fair market value is is what you receive is the donation value for non cash items like cryptocurrency right before the big crash of crypto, we started accepting crypto, got a couple of donations and then it fell off the map. We have that capability but the biggest thing I see with cash donations in in cryptocurrency around the world it gets into that a Know Your Customer constraints for compliance with banks and anti money laundering. So you may be able to accept it in some countries but not in others.

 

Craig Jeffery  05:00

Interesting. Interesting. Kevin. So Stephanie talked about some of the inflows and outflows. What do you see? That’s the same indifferent? Any anything else?

 

Kevin Peak  05:10

Thanks, Craig. Yeah, I would agree with Stephanie, I tend to work more with clients. And we’ll talk more about that later. I know, we talked about investments. But one of the things and I agree with Stephanie about the lumpiness of cash, and while you might have some donors who pay with with good regularity, you also have a lot of, and you may know that they’re gonna give annually, but it’s always gonna be at the end of the year. So you can, you can do some of that forecasting. But in a corporation, you sell a service, or you sell a widget or whatever, whatever it is, your business does. And you can sort of then forecast the cash component of that. But But nonprofits don’t have that same luxury. So, again, less unless a donor has made a pledge or unless you have something you know, is coming in. I think there’s probably a little bit more in I think, Stephanie would probably agree with this. You’re I don’t say hoarding cash. But when you think about how much how many days on hand of cash you want to have, it’s it’s different for for nonprofits than it is for for corporates, because corporates can they think they can play in their forecasting better. And most nonprofits that we talked to are thinking sort of much more long term about when they think about operating cash, it’s a much bigger number, as far as time that they want to sort of have cash on hand than it is for corporate. So but to Stephanie’s point, I think that you know, how you get the money in and, and, you know, the cash application and, you know, sort of similar fashion, right, the sort of normal Treasury components and how you’re all the accounting pieces. One difference, probably is where you have donors who are making who are, who have an endowment, and now you’ve got to report back to them. It’s not just oh, yeah, we got money in, it’s now Well, thank you donor. But now we have to manage giving you data over a long period of time of of what we’re doing with that money, or how that money is doing and, and how it’s supporting the mission of the organization. So I think that’s, it’s a little bit different in how nonprofits work with their clients than it is on the corporate side.

 

Craig Jeffery  07:23

There’s more of a link to the mission, rather than the product or the service. It sounds like. That’s correct. You know, I think as we go through discussing what’s similar, what’s different letting her be here, who is talking to, to the audience, so Kevin, maybe could just give a quick explanation of the organization you work for in what you do at Truist.

 

Kevin Peak  07:46

I work for Truist in our foundations, and Adama specialty practice. It’s a it’s a small group within the bank that works exclusively with nonprofit organizations, exclusively with long term pools of capital. And to some extent, we’re operating reserves. So when we think about investments, you’re oftentimes there’s a sort of some short term cash rate looking for whether you have a capital project or, or something else where you might be investing money, short term, six 912 months, maybe one or two years. And then and then money that you want to invest sort of into perpetuity, right, and the goal of that, so we don’t work with any 401k assets, any pension assets, really defined pools of capital. And we only work with with nonprofits. So we’re pretty, pretty unique organization, and we love to your truest corporate purpose is to inspire and build better lives and communities. And I think the work that we do, really does that, given our focus on working with with nonprofits who are who are supporting our communities.

 

Craig Jeffery  08:53

Thanks, Kevin. And we’ll include in the show notes, if there’s a particular link on truest site that touches your area, we’ll we’ll put that in. Thank you so much. Well, let’s let’s continue, Kevin, on the second section, which is about borrowing investments. Maybe he gave some hints about some of that as well. But what’s different? And what’s the same on the borrowing investment side?

 

Kevin Peak  09:16

Yeah, so I think when corporates think about investing, they’re going to be thinking about investing in the business, right? They’re going to deploy their cash back into the business, whether that’s innovation, whether that’s increased inventory, whether that’s buying additional companies, buybacks, right, how they think about deploying their cash is going to be is going to be different than than a nonprofit organization, who’s thinking about how to put that money into their mission work or to put money toward toward endowment, sort of long term pools, a sort of rainy day fund. And so I think that’s a little bit different. And I think from a from a debt standpoint, a lot of corporations is because they have oftentimes a line of credit, or they may have borrowing in place, they don’t need to worry about having cash on hand, because they could just, they could just go to their line or again, they’ve borrowed and so they just, they’re deploying capital, how they think about that differently. Nonprofits, a lot of nonprofit organizations do have a line of credit. And in some cases, they have debt and think about schools, right? building big buildings, or, you know, big capex kinds of projects for certain types of churches, but a lot of nonprofit organizations, because they’re not deploying the cash as readily back into the business. I think the way they they think about their cash, and as we’ve talked about just keeping reserves, rainy day fund, not sure, given the lumpiness in many cases of their donor pool, the way they they think about cash and think about investment is going to be is going to be different than then corporates, you know, as you think about cash or a corporation, you know, CFO and CEO and structures in place and, and budgeting and planning. That’s all sort of, you’ve got that sort of system and that structure in place, nonprofit organizations, while they do absolutely have planning, and they have budgeting, and they have forecasting, they also have a board of directors, that is, in most cases, much more involved, as it relates to investments and who they’re going to work with and how they want to invest and, and what their risk tolerance is for investing. And so I think it opens up the the organization to more, I don’t say it’s democratization of the process across different, different constituencies, but it’s different than the corporates who are, you know, have a structure in place where, you know, if CFO says, x or you know, has has authority to do something, they could do it. And I think for nonprofit organizations, when it comes to investing and looking at investment policy statement, there’s there’s more outside involvement in the in the process. So I think that’s a that’s a pretty big difference. And I think there are pros and cons to that. But but it is a difference nonetheless.

 

Craig Jeffery  12:23

So that increased amount of let’s say distributed responsibility for that. Stephanie, is that is that what you see there, too? What what other color would you give us on the governance decisions around investments and even borrowing?

 

Stephanie Villatoro  12:40

There’s definitely a higher level of board intervention with with the teams and at IJM, we have subcommittees that we work with, and I’m on the financial subcommittee, and part of the board is on that. So there’s a lot of actual direct communication with the board that you would not see in a for profit entity. They’re much more hands on. And they do have their their other jobs and things. But there’s a lot of directive, I would say from that standpoint.

 

Craig Jeffery  13:09

On the investment side, what other descriptives would you give it to show the difference or similarities? Both you and Kevin have mentioned this need for let’s say, a larger cash reserve or investment reserve to support the unevenness or lumpiness of of the donor activity? It doesn’t come in steadily? What else would you see here?

 

Stephanie Villatoro  13:32

There’s a big difference on the borrowing side, as well as what he was saying on the cash reserves. And this is the underlying we don’t have products that we’re selling where we have the ability to be a good credit risk or to have something to show for it because it is just donation base. Hitting a credit facility is much more difficult than something that you’re doing for growth to bring in more revenue. So that is that’s a main difference on that side. It’s more of a working capital, like credit facility or a line of credit. Sometimes it’s collateralized. There’s other options that you have to do to secure that from a cash flow dip standpoint, for that seasonality. So that’s a big difference on that, to kind of talk a little bit about that intake of money and that seasonality and that that focus on the cash reserves. I speak a lot to different organizations because we share information. COVID was a great year and what we saw was different organizations not not necessarily IJM but in general in the charitable organization area arena, is they increased cash reserves because they couldn’t spend it as fast as they were getting it from their from their standpoint of what they already had budgeted. And that was just an anomaly during during the years of COVID When everyone was at home. And I think that stemmed from less expenses not traveling So on and so forth where they could give more that has leveled off in the last year. That’s what I seen the difference on that from the investment standpoint, we are more focused on investing, but also on securing just the capital, like the baseline capital, we’re not risky in that sense. And the board does have to approve our policy on investments. And we also, depending on, I don’t think we’ve talked about this before, but we do a lot of we’re preparing for Annuity giving. So if someone wants to purchase an annuity, where they get a tax benefit, and also a benefit, later in life, those have state by state regulations of how you actually have to invest those funds. So there’s a lot more scrutiny, I would say, from from a regulatory compliance from a state level on those funds.

 

Craig Jeffery  15:51

A lot of scrutiny and it sounds like additional complexity, just like on the receiving cash side, now you’ve got the financial product and annuity that’s part of it. Anything else? Either of you on? Let’s say it was we think about the horizon, the time horizon, you’re forecasting, capital planning, maybe debt planning is not as long but any differences in how far you have to look out compared to, let’s say, a, a general corporation?

 

Kevin Peak  16:23

Yeah, one thing I would say, we didn’t really talk about this. Many organizations, and I don’t know where IJM is, in this in this respect, but a lot of organizations are very dependent on the income that is generated from their investment pool, to support their operations. And I think that’s something, you know, as we think about, you know, a turbulent market, you know, if you’re, if you’re, you know, if your income is down, right, the stock market is down 30%. So you didn’t throw off as much income, how many fewer scholarships, how many fewer food baskets or, you know, go for, you know, think about a food bank, or, you know, the different missions that these organizations have, many of them are very dependent, which can lead some organizations to be more risk averse with their, with their investment portfolio, because they, they’ve sort of been bitten a couple of times, or, you know, have just as go through market cycles. And the challenge with that is that, you know, the more risk averse you are, the less likely you are over a long period of time to be able to take advantage of the market and of your investment pool to generate real returns. And, you know, when someone says to me, oh, my gosh, look at some of these big, big, big, big school endowments, I say, Yeah, but they also have 25 and 30% of their investment pool in private equity. So not only are is that pretty risky, not only is that a long cycle, right to start to see distributions from those investments, but they’re also tying up their a lot of their income, or a lot of their assets that they’re not going to generate any short term income off of that are very little and so it’s an interesting sort of push and pull of how risky Do you want to be to generate great returns to support your mission? And or how risk averse Do you want to be to make sure that you can always generate some cash to support your mission? So it sounds like what I heard Stephanie say was, you know, their board really tries to balance that to be, you know, support their mission, but they’re not, you know, I’ve seen some I’ve seen some organizations that are sort of at 20, when they think about an equity, to fixed income allocation. And in 2020, maybe 2021, they looked amazing 2022 They were probably scrambling from a from a, you know, to fulfill their mission and the the income that they received off of their off of their portfolio. So that’s, that’s something to think about, and something we think about with our, with our clients and in our in our communities of how can you best manage risk to to help achieve your mission with your with your investment assets.

 

Craig Jeffery  19:14

Many organizations are net borrowers or they’re there, they flip between borrowing and having extra cash. It seems like most, or a majority of nonprofits have to be in that positive situation to manage their their activity and fulfill their mission before we get into staffing and resources where there might be some differences and similarities there. Stephanie, maybe you could just do a quick overview of what is International Justice Mission and what’s your role at IJM.

 

Stephanie Villatoro  19:43

So my role at ITM is the Global Officer of Treasury so with that I’m a managing overall liquidity, risk management, policy compliance, and the day to day operations with with the team. IJM as an organization kind of pull on your heartstrings a little bit. But we are global, but we protect people in poverty from violence. And what does that mean? We do things like combating trafficking, modern day slavery, violence against women and children, and then also police abuse of power. We do that through several different kind of pillars, but by strengthening the justice systems locally, you know, rescuing and restoring victims from violence, bringing the criminals to justice. So we do a lot of prosecution in cases there. And then we’d like to scale out, you know, for ongoing protection of those local communities.

 

Craig Jeffery  20:42

Well, that’s excellent Stephanie. And I know I’ve looked at a bunch of that information, pulls at your heartstrings, like you said, and, you know, opened your eyes to a number of the injustices that exists. So we’ll make sure we include in the show notes, you can find information about IJM, as well. So thank you for for jumping on and sharing that. Well, one thing that was different you introduce yourself as a global officers treasury, I know that I don’t think there’s any corporate group that has that type of title, right? It’s like head of treasury right across the globe. When we look at staffing and resources, most staffing groups and corporations are, they’re fairly thinly staffed. And there’s challenges but things may be different. So what are I’ll let either of you go first, on this one are Stephanie, if you want to start and Kevin, you can jump in because you work with other ones. So what are you seeing on the staffing and resource side in a nonprofit and how that differs.

 

Stephanie Villatoro  21:44

From a nonprofit standpoint, I, just a few months ago, I was at the treasury’s round table. And what I saw there from just the different groups and what they’re dealing with today is is thinly staffed. And you’re right, that is kind of a standard across the board, even in for profit world. Treasuries, usually thinly staffed, depending on the organization and the financial transactions of that organization. But what I’ve seen in the last few years, not only are you thinly staffed but finding temporary systems or for backfilling, maybe, you know, a medical leave to actually scaling up a little bit as as growth have organic growth happens, it’s been more of a challenge, there seems to be more of a shortage in finance and accounting staff. And when there’s a shortage or a shortfall, those that are looking for jobs have more options. And when you’re looking at a nonprofit organization versus a for profit, there is a difference in what that compensation is going to be like. So that in itself makes it more challenging.

 

Craig Jeffery  22:50

And when you say there’s a difference in the compensation, I’m assuming you’re saying for profit might have greater funds and can use that as a means of of getting people to sign on. So how important is the mission in recruiting, it’s like, hey, maybe you get a little bit less money, but you’re helping do that type of activity.

 

Stephanie Villatoro  23:12

Recruiting in itself, I can give you an example. But there are nonprofit organizations out there that are not faith based IJM in itself is faith based. So as another difficulty in in the recruiting component. Meaning, you know, you might need to get 10% of those that apply that meet that minimum standard from the faith based standpoint, see, even take a small percentage of what’s available, and you reduce it to 10%. So that makes it a little bit more challenging. On the other side of when we’re talking about total compensation, there, there is a definite reduction, they’re based on, you know, a for profit position of equal value. And I think those those that are looking to be in the nonprofit world are more driven. And I see it internally all the time. They’re more driven by the mission than they are by the dollar signs, I find that people are more dedicated, will work longer hours for less pay, overall, because they believe in the mission in itself.

 

Craig Jeffery  24:23

That is interesting, like the tie into the mission is like a way of, you know, giving to the organization and the mission to make that happen. A really interesting. Kevin, what have you seen in that area of staffing resources? There’s, there’s certainly a pretty heavy shortage and it’s, it’s the employee, if you will mark it, or at least has been that way for a little bit now. What are you seeing?

 

Kevin Peak  24:50

I would agree with Stephanie just, you know, everything that she said and I would maybe even go a step further to say, you know, the nonprofit’s that we work with Most of this most of the staff, they were so many more hats than in the corporate world if you’re an accounts payable, and in a corporate environment, you do accounts payable. If your accounts receivable you do accounts receivable, you know, cash forecast, I mean, right? It’s there, it’s a little bit more siloed. I bet if you ask Stephanie, what her day looks like, it’s probably, you know, I don’t want to speak for her. But, you know, 2530 40% is sort of core treasury. And then it’s a lot of other things that are helping IJM sort of more from a mission standpoint, and, and thinking about some of those, those pieces. So Stephen, I, you know, I said, it wasn’t speak for you than I did. So maybe I’ll give you a chance to sort of agree or not, but I know from my perspective, many organizations that we work with, when you talk to staff about what they do. It’s it’s development work. And it’s, you know, even though they’re not in development, right, go out and do and fundraising. But there is some piece of that I think if you’re working for a nonprofit organization, you’re you know, everybody is in a in a fundraising capacity to some extent. So I think that maybe that leads to longer hours, maybe it’s because you feel so passionate about what you do, you’re willing to work more hours, maybe it just feels like it’s more because you’re wearing so many different hats, but I think it is, I think that’s a pretty big difference in the nonprofit community than it is in the in the corporate community.

 

Stephanie Villatoro  26:26

I would agree with you, Kevin, I find myself speaking directly with donors that are making donations that are a little more challenging, helping them through that process, it usually has to do with some type of security. Or, or maybe it’s, you know, through their will and testament and how we assign that or get information on it. Those are some of the areas the others, like the development and the back end from, from our website development, when it has to do with donations to our systems, and then our payment channels and how they all interrelate. There’s a lot of different teams that have a piece of the puzzle. And Treasury ends up getting involved because you know, cash is king as usual, even in a for profit. But from a donation based organization, it is very crucial.

 

Kevin Peak  27:19

Craig, I mean, from your experience, I’m not sure how many global treasures that you’ve spoken to on the corporate side that are that are interacting with their clients. Right. I mean, it’s that they’re pretty far removed from a, you know, from that the different parts of the organization that would be thinking about talking to a client that treasury would would be pretty far down the list on on an area that would do that.

 

Craig Jeffery  27:40

Yeah, I think I think so there’s there’s certainly some examples where they are talking to clients, maybe large customers or large suppliers. But, you know, I guess, I guess I would say the, perhaps it’s a little more equivalent is the treasurer spending in a for profit organizations by spending a lot more time with their banks, for operational needs for ensuring that they have access to the balance sheet, right, the funding, the funding source there. Whereas in the nonprofit, they conversations with the donors is maybe somewhat analogous to that, but just getting not getting your hands dirty, but you know, rolling up your sleeves, and doing some of that work. Just pretty interesting to see what what some of the differences and similarities are there. Treasury in particular has to be good stewards of the organization’s funds, assets, most liquid assets and stewardship and at nonprofits usually takes on a double meaning, right? funding the mission? How’s that looking different? How did it How does the work? How do organizations? Is that a similar look to let’s say, treasury and finances a cost center? overhead? How is it similar? How might it be different between those two types of organizations?

 

Kevin Peak  28:58

I’ll start by saying when you think about what corporate treasurer is doing for the organization, you know, again, many organizations have have debt and if they have a line of credit, it’s a question you know, can you keep that keep that expense as low as possible? So if you get the cash in the bank, can you get your get the money back out, or, you know, borrow less or repay more, you know, there’s this constant balance and sort of constant game of, of trying to manage that, and thinking about forecasting and thinking about, you know, how to budgeting. And some of that is different, right? I don’t I don’t think Stephanie on a daily basis is saying, oh my gosh, we gotta get this cash applied as quickly as possible. Not I mean, she, she probably is, but it’s probably for different reasons. Then, oh, my gosh, I could I could, you know, I can reduce my, my, my debt expense by doing something differently. So, you know, the sort of mentality around thinking about day to day, sort of cash man judgment and the work that that Treasury is doing is slightly different that I think the philosophy is a little bit different and to Stephanie’s point, sort of more of the hand holding with donors or different types of constituents, many, many more types of assets that can be coming in the door. And we have clients who want to, or not clients, donors who want to donate a big piece of land, if you’re a nonprofit, the first thing you do is say, how quickly can I sell that piece of land? I have no desire to, to manage that, whether it’s timber or whatever else it might be, I want to convert that to cash. In same thing with crypto same thing with you know, any other type of asset, it’s held stock, how quickly can I get that converted to cash? Those are things that that Stephanie’s having to think about in her role, that, you know, nobody’s trying to say, hey, Walmart bought a bunch of things they want to pay pay their, their, their vendors in, in crypto or in some other type of currencies to be cash, right. So people aren’t having to think about that on the on the corporate side versus the versus the nonprofit side.

 

Stephanie Villatoro  31:09

I’m gonna take that in a different way. When I think of stewardship of a mission. And I agree with Kevin 100%. The focus is how do you get it to be liquid? From a donation standpoint, we also have to look at liquidity in a multifaceted way. It’s not one pool of cash, we have restricted cash, we have non restricted cash, donor specific donations, you have grants, that might be specific purpose. So you have to actually manage it in buckets. That’s a little bit different as well, from a for profit standpoint. But when I’m thinking of stewardship, just funding the mission and business and overhead, I’m thinking like, as simple as an ERP system, from a for profit, you’re going to look at what’s best for the organization, you’re going to pay for it, there’s no question, you need to have an accounting system that works well for your type of organization. But when you’re looking at overhead for a nonprofit, you will do with less instances for that because people were donating to the mission, an ERP system is not the mission. It is back in back office management. But you have to still account for that you still have to run the organization and do your financial statements and your 990s. That still has to be done. And you still have to track that. But what you’ve used maybe less than optimal. We actually went out and had specific donors assist us with just upgrading our ERP system. And I was donation specific for systems. So that’s, that’s something we see that’s different from a for profit versus a nonprofit.

 

Craig Jeffery  32:53

Yeah, that’s interesting, hopefully, if they didn’t spend $30 million of donated time to get the system up. Well, it’s been a good discussion so far. Stephanie, and Kevin, I want to, and instead of final thoughts or comments, I guess we’ll make that an interesting item, or something that is good to know or understand about nonprofits. And Kevin, why don’t we start with you? And then we’ll go to Stephanie.

 

Kevin Peak  33:21

Yeah, I guess I again, because my experiences on the investment side with nonprofit organizations, and just how, how they’re how they’re thinking. And I guess it just sort of corroborates something that Stephanie said a little bit ago about doing more with less, or maybe not having the optimum, whether it’s a tool or whatever is in the, you know, whatever the Treasury group might need, or that or that organization might need. You know, organizations are always thinking about nonprofit organizations are always thinking about, well, if I spend $1, here, you know, it’s something that’s operational, that’s $1 less that I can put toward my mission and be in scholarship or helping somebody in that community, whatever, whatever the organization’s saving one more child that I’m happy to be a donor to IgM have been for a long time to a good friend of mine says, Stephen. I don’t even know if he even knew that. But I’ve been a donor for for a pretty long time to to IgM. And when I think about gosh, yeah, I as a donor don’t really think about well, yeah, but if you know, Treasury needs a new tool. Well, they should probably have it. But when I but I also think about, well, gosh, but the dollars that I’m giving, I’m really happy that they’re going to specific mission of IJM. And so I think that to me is just such an interesting thought of the mindset and the philosophy of nonprofit organizations is how can we do more with less because that will enable us to, to support our mission. Even more. I think that just is something that I’m very appreciative of, in general with nonprofit organizations. And I think that we, as a society, should should really applaud that and the effort that that nonprofits undertake to make sure that they’re they’re spending every dollar and stewarding every dollar as wisely as possible.

 

Craig Jeffery  35:28

Yeah, when you were when you were saying that it was basically, or in summary, that the efficiency of doing more with less is to support the mission in in a nonprofit. In a corporation, the efficiency is really an element of both returning profit and supporting scalability. So similar type, perhaps similar types of behavior with a different primary motivation for those. Stephanie, how about you what, what’s interesting an item, or something that we should know or think about?

 

Stephanie Villatoro  35:58

Yeah, I think there’s a few that we had talked about before. And I’ll point them out. I know we talked a lot about cash and donations and liquidity, but forecasting on top of that, it’s very challenging on the receipt side. So you have no, you know, you’re not selling something, you don’t have accounts receivable, you have donors in your system that have made potential promises, and how do you forecast a potential promise. And it’s multifaceted in the sense of you have your regular donors that are very steady every month, and then you have those that are the larger donors mid level and above that are more the timing is unknown. So it’s very challenging to forecast when you’re going to, to receive certain types of donations, that’s a little more challenging, from a nonprofit standpoint, for forecasting. Some other little areas that are that are different, and that you have to consider with donors is data privacy, as you get into different jurisdictions and laws around the world. And then everyone’s familiar with GDPR in the UK, but there’s different data privacy laws in every country that we work in. And we actually fundraise in multiple countries is not just the US. So we have to keep those data privacy laws in mind making sure we have all our ducks in a row for our donors and protecting them. And then the last is when we’re funding our operations in the different field offices, sometimes sanctions pop up, and you can’t pay a sanction country from a for profit standpoint. But when you’re on a nonprofit doing humanitarian work, there’s actually you have the ability to do it, if there’s a general license for it out there for the humanitarian work and in certain areas of the world. That’s a major difference as well.

 

Craig Jeffery  37:50

Excellent. Kevin, and Stephanie, thanks so much for sharing those those insights and thoughts. And it was it was good to talk to you both again after. It’s been a number of years since we first started working together and it was good to collaborate on this.

 

Kevin Peak  38:04

Thanks, Greg. Appreciate your time today.

 

Stephanie Villatoro  38:07

Thank you, Craig. Thank you, Kevin.

 

Announcer  38:11

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