Andrea Horbinski 2015 Q&A: Finances, Group 2

Can you describe your ideal setup for OTW finances going forward, given that many of you flagged the current situation as an issue?

The current Board is emphatically aware that the current situation is less than ideal and has set out the general structure for the OTW’s finances going forward: by the end of this year we will have engaged a CPA to set up a structure for the OTW’s bookkeeping, as well as another CPA to review the books on a regular basis. We will also engage a firm to prepare the OTW’s tax returns from now on so that this important part of maintaining the OTW’s 501(c)3 status is taken care of quickly and accurately by professionals who have the expertise to do the best possible job. As we continue to grow the organization we will engage financial professionals who can help the OTW structure its overall finances and investments so that we are able to responsibly grow our assets while maintaining adequate funds to carry out our operations in service of our mission and to maintain the financial reserves mandated by the current strategic plan.

There is currently no internal or external auditing structure checking the OTW’s bookkeeping (no legal worries, here: the Delaware state laws do not require annual auditing from nonprofits). If you join Board, is this something you would like to change? If so, how?

The current Board is emphatically aware that the current situation is less than ideal and has determined how we will change it in order to move closer to best practices. By the end of this year we will have engaged a CPA to set up a structure for the OTW’s bookkeeping, as well as another CPA to review the books on a regular basis. We will also engage a firm to prepare the OTW’s tax returns going forward so that this important part of maintaining the OTW’s 501(c)3 status is taken care of quickly and accurately by professionals who have the expertise to do the best possible job. Each of these parts of the process will act as a check on the other, just as the Board and the Treasurer act as a check on them and each other. This accounting structure is very much a basic foundation; as we continue to implement the strategic plan we will continue to refine our financial tools, policies, and practices so that the Treasurer’s job does not become too much for any one person and so that the Board and necessary personnel maintain adequate access to the accounts while making them as secure as possible. At a minimum, however, this accounting structure will provide for regular external audits going forward so that we are able to quickly and accurately examine the overall state of the finances and details as necessary at any time.

Our finances are currently being overseen by only one person with actual decisional and content-producing power, which is concerning in terms of transparency, and efficiency. If elected, how would you go about building a sound administrative Financial structure for the Organization?

It is not correct to say that the Treasurer is the only person with decision-making or content-producing power in terms of the finances. Every financial decision is reviewed and approved by the Board, and every director has the ability to review the accounts even under the current, irregular bookkeeping structure. The draft budget was reviewed collaboratively by the entire Board with support from other attendees at the annual meeting in Vancouver. Other key personnel also have the access they require to do their work for the organization. As said above, the Board has set out the general structure for the OTW’s finances going forward: by the end of this year we will have engaged a CPA to set up a structure for the OTW’s bookkeeping, as well as another CPA to review the books on a regular basis. We will also engage a firm to prepare the OTW’s tax returns going forward so that this important part of maintaining the OTW’s 501(c)3 status is taken care of quickly and accurately by professionals who have the expertise to do the best possible job. This accounting structure is very much a basic foundation; as we continue to implement the strategic plan we will continue to refine our financial tools, policies, and practices so that the Treasurer’s job does not become too much for any one person and so that the Board and necessary personnel maintain adequate access to the accounts while making them as secure as possible.

I saw many concerns about finances in the candidates’ statements, but I did not see outsourcing financial oversight mentioned as a solution. I’d like to know what the candidates think about outsourcing (paying for) some responsibilities, in particular engaging a company with a background in financial services for non-profits.

An internal, volunteer Audit Committee would have made perfect sense several years ago when the OTW’s finances were still relatively simple and, equally to the point, when we had a much smaller asset base and effective operating budget than we do today. The Board has reviewed the position of the Treasurer as it was constituted until the present and concluded that the duties it consisted of (essentially, everything) were and are too much to ask of any one volunteer. In particular, the OTW is now at a point where its assets are or should be of sufficient complexity that finding an individual with the necessary skills to accomplish all aspects of the job essentially meant finding a professional, and also was less than desirable from the perspective of responsible oversight of the finances. Accordingly, the Board has determined that by the end of this year we will have engaged a CPA to set up a structure for the OTW’s bookkeeping, as well as another CPA to review the books on a regular basis. We will also engage a firm to prepare the OTW’s tax returns going forward so that this important part of maintaining the OTW’s 501(c)3 status is taken care of quickly and accurately by professionals who have the expertise to do the best possible job. Engaging professionals for these aspects of the job greatly lessens the burden on the Treasurer, ensures that these parts of the operations are taken care of accurately and regularly by people with proven expertise, and enables us to better support the OTW personnel working in service to our mission on a volunteer basis.

Aline Carrão 2015 Q&A: Finances, Group 2

Can you describe your ideal setup for OTW finances going forward, given that many of you flagged the current situation as an issue?

We need to address the finances issue in a practical and straightforward way. It’s clear, judging by the last few years, that having only one person in charge of our books and bills is not a ideal set-up. We need to reinstate the Finance committee and recruit for it, so that the responsibility won’t fall on one person’s shoulders.

Other than that, we need to assess whether it’s feasible, sustainable and practical in the long run to have an all-volunteer Finance committee, and which parts of the work—bookkeeping, budget planning, investments, auditing—would be better served with an external contractor.

There is currently no internal or external auditing structure checking the OTW’s bookkeeping (no legal worries, here: the Delaware state laws do not require annual auditing from nonprofits). If you join Board, is this something you would like to change? If so, how?
I do believe we need a better structure to check our books and make sure everything is in order. We need to evaluate what the best process for the OTW would be. An external audit might have prohibitively expensive — we would need to investigate. We might need to look into an internal auditing structure instead, or perhaps have external audits only every few years.

Our finances are currently being overseen by only one person with actual decisional and content-producing power, which is concerning in terms of transparency, and efficiency. If elected, how would you go about building a sound administrative Financial structure for the Organization?

We need to reinstate the Finances committee, recruit for it requiring CVs. At the same time we need to evaluate what the different aspects of the OTW’s financial needs (bookkeping, budgeting, auditing, investmenting) are and what the best way to address each one of them is, be it recruiting specifically for it, setting up an ex-officio role, making something a committee-wide responsibility, or bringing in an external contractor. This way we will not have a multifaceted and work-intensive job depending in one single person having to do too much. Plus, it’s essential to have failsafes and checks and balances in our financial structure. Someone has to make sure bills get paid in case of an emergency; someone has to be there to catch a mistake in the books if something gets mistyped or miscategorized.

Even if we decide to outsource much of this work, it’s important to have qualified people who can assess our current situation and make these decisions. This is a critical area of the OTW, and we should prioritize recruiting for it as soon as we can.

I saw many concerns about finances in the candidates’ statements, but I did not see outsourcing financial oversight mentioned as a solution. I’d like to know what the candidates think about outsourcing (paying for) some responsibilities, in particular engaging a company with a background in financial services for non-profits.

I think it’s a very reasonable option, and possible one of the best solutions in the immediate future. That said, this will require finding a financially viable option; taking into consideration our other operational costs, some services may be too expensive for us. But yes, I believe outsourcing bookkeeping, depending on the cost, could be a very healthy option for the OTW. It would mean we won’t depend on retaining a volunteer with bookkeeping experience, and that the person doing our books has professional experience. Both would be excellent changes.

Alex Tischer 2015 Q&A: Finances, Group 2

Can you describe your ideal setup for OTW finances going forward, given that many of you flagged the current situation as an issue?

The setup I would like to see established is a fairly basic, yet functional one that has the option of being improved on and fine-tuned in the future.

We need to make finances a job for more than one person again: having a single individual as the lynchpin for all our financial transactions is irresponsible, and provides too many chances for things being perceived as dodgy, even if everything is completely above board.

I would like to see the finance committee reestablished, with at least three members on it. Having clear and accurate bookkeeping for past expenses and a prospective budget to use for planning would be part of my ideal setup. I would want the accounts/bookkeeping audited at least once a year, if not by an external auditor (which might be too expensive), then at least by two volunteer auditors with no involvement in the finance committee. The audit reports should be available to any interested org members at the very least, and preferably publically available.

There is currently no internal or external auditing structure checking the OTW’s bookkeeping (no legal worries, here: the Delaware state laws do not require annual auditing from nonprofits). If you join Board, is this something you would like to change? If so, how?

As I explained in my previous answer, yes, I would want to establish at the very least an internal auditing structure. I would want the auditors to have no involvement in the finance committee and the yearly audit reports to be as publically available as possible. While this might not be a legal requirement, for the peace of mind of the members – and actually the treasurer and/or finance committee themselves – I think this is a very important element to have.

Our finances are currently being overseen by only one person with actual decisional and content-producing power, which is concerning in terms of transparency, and efficiency. If elected, how would you go about building a sound administrative Financial structure for the Organization?

This may be getting repetitive by now. I would want to re-establish the finance committee, make sure it is formed of at least three people, have public bookkeeping audits and a prospective budget for future planning.

As to how to build this, the first step would be to recruit internally among the staff of all committees for volunteers with bookkeeping experience, who would be willing to sit on a finance committee to start working the details out.

I saw many concerns about finances in the candidates’ statements, but I did not see outsourcing financial oversight mentioned as a solution. I’d like to know what the candidates think about outsourcing (paying for) some responsibilities, in particular engaging a company with a background in financial services for non-profits.

While I am not ruling out the possibility that this might become necessary, if, for example, no volunteers came forward to staff the finance committee or, likewise, no auditors could be found, I don’t think our finances at this moment absolutely require this.

It is hard to say, as so much about our finances is not openly discussed, but from the glimpses I’ve caught, our finances don’t seem to be very complicated and involved. If that turns out to be untrue, I don’t dislike the idea of outsourcing at least the untangling part of the current situation, and potentially keeping certain aspects outsourced for longer. It would require careful research to find the right balance of a cost-benefit solution for the org, because while obviously a certain amount of donation money has to go to admin and upkeep of the org in general, a large number of our members do not donate for the administrative upkeep of the org, and would rather see the projects kept up and running. Some admin costs are necessary, but we have to make sure that if we’re thinking about outsourcing, that it is really not possible to do the relevant tasks in org.

Q&A Responses – Finances, Group 1

The fourth set of questions the 2015 candidates have completed is the first of two groups on the topic of finances. You can read their answers by clicking on the links below.

All 2015 Q&A responses so far.

More information on our Q&A process.

Dan Lamson 2015 Q&A: Finances (Group 1)

Note: Dan has withdrawn from the race, but he completed his answers before withdrawing, so they will be posted to the site.

If elected to the board, will you push for a published yearly budget? What would you consider key items in a budget?

I will totally push for a budget every year. It is something I have been pushing for, as chair of DevMem for a long time.

As to key items in budgets generally, you want to budget how income you’ll need and how much you think you’ll spend. That’s the basics you need. I think every committee should be approached with how much money they will need in the near, and then have that compiled to make a budget how our expenses, both one time and recurring. Then we have to make sure that we will raise enough money to cover our expenses.

For specifics, I would say servers and other hardware that make sure things run would be a priority. I know there has been talk about a paid coder for AO3 which would be a boon to the project. That would be a priority. But basically, all our committees have needs, and if we have the income, I hope all their needs are met in a budgetary process.

A nonprofit’s board has a fiduciary responsibility regarding its assets, which includes making sure they earn a reasonable interest rate. In the past three years, despite our considerable reserves, our investment income (per the OTW’s tax filings and Annual Reports) has been, respectively, US$5, US$40 and US$18. If elected, would you hope we can do anything different about this?

The OTW has a good amount of cash on hand at the moment. We are in a good place financially. I think it is time to start discussing an endowment for the OTW, and investing it and growing it. This kind of thing would be a priority of mine, were I to be elected. It would give the OTW stronger and more secure financial future.

Shorter answer: I do feel we could be getting more interest money then we have been, but we need to do it in the right way.

The latest three OTW fundraising drives had escalating goals: US$70,000; US$100,000; US$175,000 (October ’14, May ’15, October ’15). How would you define responsible fundraising in a fandom context? What does it mean for our finances?

Fundraising is fundraising. We are lucky at the OTW community’s support of our organization and projects. The OTW is and has been growing. I imagine our expenses for 2015 are somewhere around US$275,000, so our past fundraising has been on point for our financial needs. You always want to raise as much (or more) money than you need to cover your expenses, to keep your reserves safe for rainy days.

The simple fact is, more people than ever are using our sites and projects. I find that awesome and a testament to the hard work of a lot of our volunteers. But increased traffic equals more bills. Older infrastructure means large purchases every now and then. There are certain things we have to buy, and to do so, we need money.

I think going forward, when we have a solid budget, we can fine tune exactly what we need to fundraise better. Perhaps our fundraising methods or practices will change, but for now, I stand by them.

There have been complaints in the past, particularly from AO3 committees, of some of the OTW’s service bills not being paid on time or being paid very last-minute—sometimes resulting in committees temporarily losing access to tools they need for their work. What do you think can be done to prevent this from happening in the future?

I am not sure about bills being paid one time or not in the past as an issue. I know of only one situation where it happened and was taken care of quickly. I am in favor of paying bills on time.

I think a good solution to this would be to set up a bill paying system online, whereby as many of our bills as possible are paid automatically. If a bill is coming up due, I would suggest that committees make sure that the treasurer is aware of it. The treasurer may have thought something was taken care of, and I’m sure it would not be a bother for them. Communication is the key.

Also, I am not averse to paying bills early. It may be due on the 20th, but if you get the bill on the 3rd, why not pay it? I hope this is not an issue going forward.

Matty Bowers 2015 Q&A: Finances, Group 1

If elected to the board, will you push for a published yearly budget? What would you consider key items in a budget?

Yes. Our budget should outline our expected expenses (OTW tools, contractor fees, server upkeep, committee expenses, etc.) and projected income. After the budget has been drafted, it should be sent to the committee chairs to ensure everything is correct and nothing has been overlooked. It should be reviewed as the year continues if new expenses arise.

A nonprofit’s board has a fiduciary responsibility regarding its assets, which includes making sure they earn a reasonable interest rate. In the past three years, despite our considerable reserves, our investment income (per the OTW’s tax filings and Annual Reports) has been, respectively, US$5, US$40 and US$18. If elected, would you hope we can do anything different about this?

Yes. Leaving most of our reserves sitting in a checking account means that, in practice, we’re losing money. I believe we should speak to a licensed professional who can offer advice and suggestions. We should then listen to said professional and implement the suggestions we believe will work best for us.

The latest three OTW fundraising drives had escalating goals: US$70,000; US$100,000; US$175,000 (October ’14, May ’15, October ’15). How would you define responsible fundraising in a fandom context? What does it mean for our finances?

Our fundraising goals should be centered on our budget: our projected expenses for the coming year and the amount we need to cover these expenses. That way, when it’s time for a fundraising drive, we can present to our potential donors a clear breakdown of our projected expenses, showing them how we plan to use the money we’re raising. That will help the OTW be more transparent in its financial management and might even, I believe, help us raise more donations from people who may have reservations about our current financial practices.

There have been complaints in the past, particularly from AO3 committees, of some of the OTW’s service bills not being paid on time or being paid very last-minute—sometimes resulting in committees temporarily losing access to tools they need for their work. What do you think can be done to prevent this from happening in the future?

Without knowing all our financial details, here are a few general suggestions:

  • Have more than one person available to pay bills
  • Organize our finances so that all information is in one location, with a payment schedule for everything outlined
  • When possible, set up recurring payments
  • Ensure that backups of all legal and financial documents are in a secure, shared location so no one person has the only copy of anything