Quote:
Originally Posted by EricVanWyk
Situations vary between NPOs, but a vague rule of thumb is to keep a quarter of your annual throughput on hand, "minimum". After reading half a tree worth of horror stories of NPOs that tanked due to insufficient reserves, I'm glad FIRST has a bit in the bank.
Lastly, before we lambaste FIRST for this, lets all take a moment and look at the reserves universities keep and the rates they charge for tuition. I won't say the two are apples and apples, but it is a similar concept.
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For what it's worth, FIRST is a "non-profit", no doubt about that, but I do agree with David Noll that they are run like a business much more than most in FIRST are aware. That is mostly good by the way, but also brings some of the negatives of business behavior and ethics with it.
I agree with you Eric that a solid foundation should keep around 25% of their operating expenses in reserve. Problem is, FIRST had a cash reserve between 25-29% in 2002 & 2003. Then the registration fees were increased and the profit/cash in reserve went up to 33%, 35%, 40% and 42% from 2004-2007.
I'm sorry, but here's where I will somewhat "lambaste" FIRST a bit, as you but it. Where I started to have a problem with the financial status of FIRST. If they were a business and I owned stock, I'd be all for it. But it's a non profit, and I got involved because I thought it was a great program for schools and students. Then I see the non-profit generating $1-2 Million in extra revenue (profit) each year from team fees even after they've secured a cash nest egg of over 33% of their operating expenses. At the same time I see teams struggling to participate, many can't because it's too expensive and I haven't really seen the quality of the program increase with the increased revenue.
I'm going to stop, because I get worked up and upset with FIRST every time I delve into the fee structure and the business ethics, or lack of, in instances like the FLL-FTC relationship. I am troubled by the direction of FIRST, but I love the program - or at least the program I thought it was and know it was a a few years ago. Just wish it was managed like a non-profit trying to follow it's great mission, not a business trying to increase it's bottom line at the expense of it's customers. Sorry, just my frustrated view right now.