‘Encouragement of a Great Example’: CPAs on Boards

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MARCH 2005 - Alexis de Tocqueville, the 18th century politician and social philosopher best known for his book Democracy in America, wrote “Americans … have voluntary associations of a thousand kinds: religious, moral, serious, futile, general or restricted, enormous or diminutive. … If it is proposed to inculcate some truth or to foster some feeling by the encouragement of a great example, they found a society.”

Almost 200 years later, de Tocqueville still shows rare insight, but even he might be surprised at the growth of the nonprofit sector in America. According to the National Center for Charitable Statistics, there were more than 1.3 million nonprofits nationwide as of 2003, with almost 91,000 in New York State, representing more than $231 billion in gross receipts and $254 billion in total assets. About half of all nonprofits are devoted to “charitable and educational” purposes, and an unknown number of small community groups and other organizations operate outside the center’s scope.

De Tocqueville’s words are inspiring because they reflect our country’s strong tradition of helping others as one facet of our democracy. But that tradition carries responsibilities and obligations as well, for strong governance, capable management, and accountable leadership. Neglecting those obligations lies behind cases such as Hale House, the United Way, and, more recently, the Legal Aid Society. Most of the Legal Aid Society’s problems seem to stem not from malfeasance, but from executives’ misguided hopes that cash flow problems would solve themselves. But in all cases the lesson is the same: Weak governance and controls are the key ingredients of failure.

Collaborative Partnership

Because all nonprofits deserve strong governance and controls, but many lack the resources to develop them, the NYSSCPA is partnering with the Better Business Bureau of New York; the Nonprofit Coordinating Committee of New York, Inc.; the Council of Community Services of New York State, Inc.; the Alliance for Nonprofit Governance; and the United Way of New York City. The purpose of this partnership is to ensure that nonprofits run with professional financial expertise as public-interest entities. The name of a new program to match CPAs with organizations that need their expertise is CPAs on Boards.

CPAs on Boards will provide nonprofit board members and CPAs through New York State with training about effective nonprofit governance, the roles and responsibilities of board members, and the fundamentals of nonprofit operations and accounting. Program participants will have the option of attending training sessions by the Council of Community Services or sessions planned in cooperation with NYSSCPA chapters. The program will also match CPAs with nonprofit boards that are proactive in raising the level of their financial integrity.

Rewards That Exceed Expectations

Visit our website (www.nysscpa.org) in the coming weeks for more information. CPAs that make time to serve on nonprofit boards say that the rewards exceed their expectations. In addition to helping to improve their communities, they find that their networks are enlarged, their horizons are broader, and their professional skills are sharper because they’re using them in different ways. My hope is that the expectations of the organizations sponsoring this program will also be exceeded. Returning to de Tocqueville: “As soon as individuals with a cause have found one another out, they combine. From that moment, they are no longer isolated people, but a power seen from afar, whose actions serve for an example, and whose language is listened to.”

Louis Grumet
Publisher, The CPA Journal
Executive Director, NYSSCPA





















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