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Research Shows Many Non-Profits Lack Automated Systems, Strong Financial Practices, and HR Services

Jack-of-All-Trades Staff Model Common

WAKEFIELD, Mass. – Feb. 3, 2014 – Virtual, Inc. (http://virtualmgmt.wpengine.com), a technology-focused association management company, has released the conclusions of a research project the firm recently commissioned to look into the characteristics and operational practices of non-profit organizations.  Responses were received from 266 non-profit groups of different sizes, including 501(c)3 charitable groups and 501(c)6 trade associations.  Results varied according to group size and IRS designation.  A 15-page report containing survey results and analysis is available for download at no charge.

The survey uncovered some high-level results associated with association size and category:

  • People at mid-range associations (those with annual revenue greater than $500,000 and less than $3 million) view running an organization today more positively (70% good, 26% bad) than those at small-revenue associations (52% good, 35% bad).
  • Groups whose members are mostly corporations are more positive (71% good, 22% bad) than groups whose members are mostly individuals (53% good, 34% bad).
  • 501(c)6 organizations are much more likely to fall in the mid-range revenue category (49%) than 501(c)3s (22%).
  • The 501(c)6 organizations, though they have about the same number of employees as the 501(c)3 groups, use more robust internal structures and processes.
  • Small-revenue associations tend not to offer benefits packages, while mid-range associations offer a wide range of benefits but do not have dedicated HR staff to manage them.

Responses concerning financial practices revealed that thorough financial reporting is sparse, and saving for a rainy day tends to be low:

  • For half of the associations, a balance sheet is the only element of periodic financial reporting.
  • Though more than three-quarters of the respondents do produce balance sheets, fewer than half report on performance against budget, and other components’ usage rates are even lower.
  • More than one third (36%) keep financial reserves of less than 25% of their annual operating budgets, and only 40% maintain reserves equivalent to 50 to 75 percent (the recommended range for non-profits).
  • QuickBooks is far and away the leading financial software product, having ten times the following of the second-place contender, Peachtree (54% vs. 5%).

The results for mid-size non-profits disclosed a tendency to rely on a few non-specialist employees for a broad range of technical and specialized functions – the same jack-of-all-trades approach prevalent in small organizations.  In these mid-size associations:

  • Very few have a full-time human resources employee (12%).
  • Most (87%) send out at least some of their payments by paper; 32% are completely paper-based.
  • Only some have their data backed up off-site (37%).

Additional information about the services that Virtual provides to associations is available at test.virtual.com.php53-17.dfw1-2.websitetestlink.com.

 

About Virtual, Inc.

Founded in 1999, Virtual, Inc. is a full-service association management company that combines advanced technology, best practices and innovation to provide its clients with world-class business operations, freeing organization leaders to focus on their missions and programs. In November 2012, Virtual was named to The Boston Globe’s “Top Places to Work” list, in the small employer category. The firm has three times in recent years been named to Inc. Magazine’s list of 5000 fastest-growing private companies. Virtual is accredited by the AMC Institute, the global trade group that represents the association management industry. For more information about Virtual, Inc., visit test.virtual.com.php53-17.dfw1-2.websitetestlink.com, or call +1 781-246-0500.

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EDITORS’ NOTE: Digital photographs of the Virtual employees mentioned are available upon request to jvanderkay@www.virtualmgmt.com