Bogged Down by Reporting Requirements?
July 17, 2006
(July 17, 2006) A new report issued by the RAND Corporation outlines a series of actions nonprofit social services providers can undertake to reduce the large amount of time and money they spend complying with reporting requirements set by organizations that provide them with funding.
The report, Meeting Funder Compliance: A Case Study of Challenges, Time Spent and Dollars Invested, which stems from a yearlong, in-depth examination of one nonprofit social services agency in Western Pennsylvania, found that employees of the agency spent nearly half their time collecting information needed for compliance efforts imposed by funding organizations. These included activities such as writing reports, tracking expenses and attending meetings.
Moreover, the study found that work hours spent on compliance reporting consumed 11 percent of the nonprofit agency’s annual budget.
The report recommends that nonprofit groups providing social services consider the following steps to reduce the amount of time and money they spend on reporting requirements:
- Develop a client information system that allows staff to create reports, update records and share files with each other.
- Provide comprehensive computer training and laptop computers to enable staff to access their files off-site.
- Develop an agency-wide procedure for completing compliance activities that would clearly define reporting goals, reduce staff tensions and increase office productivity.
- Educate staff about compliance issues and the importance of reporting agency data to the appropriate funding organizations.
The study also offered recommendations for funding organizations to consider when drawing up their reporting requirements:
- Design internal measures that will examine the burden placed on staff of nonprofit social services agencies, to decrease worker stress and increase staff performance in completing compliance activities.
- Evaluate compliance collection needs and requirements, and assess whether the data funding organizations need is critical to all participants, including the nonprofit staff and their clients.
- Conduct open discussions with nonprofit staff members on compliance issues that are sensitive to the power disparities existing between the nonprofit agency and its funders.
RAND researchers spent a year examining financial records and interviewing 41 field and management staff members at the nonprofit social services organization to prepare the study. The social services organization focuses on preventing and treating child abuse. The agency, like many nonprofits, receives funding from several sources, including county and states agencies, as well as private foundations and the United Way.
In addition, RAND researchers interviewed staff members at the social services agency about major tasks and details involved in the organization’s funding compliance. Interview topics included whether field staff were properly trained to create comprehensive client reports, challenges staff faced accessing necessary data from each other and how staff felt overall about the experience of meeting reporting requirements.
Researchers also found that management and field staff expressed dissatisfaction with the lack of clear and consistent procedures spelling out how to write reports to meet compliance requirements, along with complaints about delays in receiving edits and comments on their reports from colleagues.
The RAND Corporation, headquartered in Santa Monica, Calif., is a nonprofit institution that helps improve policy and decision making through research and analysis.
Meeting Funder Compliance: A Case Study of Challenges, Time Spent and Dollars Invested is available on the RAND Corporation website in PDF format free of charge. Paperback copies of the 82-page report (ISBN: 0-8330-3956-3) can be ordered from RAND’s Distribution Services (firstname.lastname@example.org or call toll-free in the United States 877-584-8642) or online through the RAND Corporation website.
For more info on the report: http://www.rand.org/pubs/monographs/2006/RAND_MG505.pdf
Related AFP ResourcesAmericans Say They Will Pull Back on Giving in 2013: Can That Change…and What Can You Do?
Canadian Group Calls for Continued Government Support for Charities
IRS Seeking Comments on Donor-Advised Funds
Numerous Charities in CFC Owe Millions in Payroll Taxes