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☛ Is NCHA Acting as a Non-Profit? 9-17-18

Posted by on Sep 17, 2018 in BREAKING NEWS, CUTTING NEWS, FROM THE EDITOR, HORSE ORGANIZATIONS, LAWSUITS & INDICTMENTS, WHO, WHAT & WHERE | 2 comments

 

IS THE NCHA ACTING AS A NON-PROFIT?

 

KEY ASPECTS OF A NON PROFIT ARE ACCOUNTABILITY, TRUSTWORTHINESS, HONESTY AND OPENNESS

 

By Glory Ann Kurtz
Sept. 18, 2018

A non-profit organization, also known as a non-business entity or non-profit institution, is dedicated to furthering a particular social cause or advocating for a shared point of view. In economic terms, it is an organization that uses its surplus of the revenues to further achieve its ultimate objective, rather than distributing its income to the organization’s shareholders, leaders, or members. Non-profits are tax exempt or charitable, meaning they do not pay income tax on the money that they receive for their organization. They can operate in religious, scientific, research or educational settings.

The key aspects of nonprofits are: accountability, trustworthiness, honesty, and openness to every person who has invested time, money, and faith into the organization.

 

Nonprofit organizations are accountable to the donors, funders, volunteers, program recipients, and the public community. Public confidence is a factor in the amount of money that a nonprofit organization is able to raise. The more nonprofits focus on their mission, the more public confidence they will have, and as a result, more money for the organization. The activities a nonprofit is partaking in can help build the public’s confidence in nonprofits, as well as how ethical the standards and practices are.

 

Nonprofits are required to submit their financial statements and other information — including the salaries of directors, officers, and key employees — to the IRS. (For information on who is considered a key employee, see IRS Form 990 and its instructions.)

 

The IRS and nonprofits themselves are required to disclose the information on Form 990 to anyone who asks.Nonprofits must allow public inspection of these records during regular business hours at theirprincipal offices. However, many people won’t even need to ask — a number of websites make Forms 990 available for the searching, including the Foundation Center at http://fdncenter.org and GuideStar at www.guidestar.org.

 

People can also request information from the IRS by writing a letter, including the name of the organization, the year, and the type of tax return requested, and send it to:

Commissioner of Internal Revenue
Attn: Freedom of Information Reading Room
1111 Constitution Avenue, NW
Washington, DC 20224

 

NCHA FINANCES:

Even though the NCHA is a non-profit, their finances seem to be headed downhill, which is requiring the association to try to raise more money, of course from the members. They are currently raising their membership dues to $145 per year. Unfortunately this is not how you balance the books. This only runs  people out of the horse industry!  In other words, the members suffer because of mismanagement.

 

During their Aug. 6-8 Executive Committee meeting, it was pointed out that they need to get a better handle on cash flow; accounts receivables are solid but the timing of payment needs to be recognized in order that there are no cash flow shortfalls. For example, NCHA is still awaiting the reimbursement from the MERP fund for the 2017 Futurity. There isn’t a question of whether NCHA will receive the funds, it’s simply a matter of when the funds will be disbursed by MERP (Texas’ Major Event Reimbursement Program).

 

A discussion ensued regarding a method for NCHA to fund the current cash flow shortage citing three options: the liquidation of investments, requesting from our bankers, Frost Bank, a margin loan against our investments or opening a line of credit.

 

Cutting down on their internal costs was not a choice! Rather charging the members and their employees more for their services was their choice!

 

As a part of this cash shortage, the NCHA passed a motion to charge the box seat holders from last year $1,890.00, to this year $5,000.00 for same seats, boxes with 8 seats to $5,500. This increase would include box seats for all three Triple Crown events: Futurity, Super Stakes and Summer Spectacular.

 

It was also passed that all vendors currently outside the Will Rogers Coliseum for all Triple Crown events, be moved inside the John Justin Building with the exception of horse spas and cleaning trailers.

 

The NCHA is also exploring methods to reduce the amount of money NCHA spends on very costly benefits on an annual basis for employees by a change of the insurance plan design, change of carriers, wellness incentives, cost-sharing plans, etc.

 

Also it was passed that there would be increases in the various levels of NCHA membership. Life Membership will no longer to offered as of August 7, 2018. For 2019 memberships, all members will pay $145 and will include Amateur and non-pro members but that amount will not include trainer’s fees. Amateur and Non-Pro fees will be $25. Trainer fees will be $125 with PAC, $25 without PAC in addition to membership fee.  It was later passed that a fee of $145 would include the cost of the trainer’s card or non-pro/amateur card. Existing life members with amateur and non-pro fee will be $25 annually. Existing Life Non-Pro fee will be $400.

 

All new memberships are free for one year and include online Chatter only. All former members who have been members for 3 years will also receive a one-year free membership that includes the Chatter online only. It was later reviewed and when the numbers were run, it would mean approximately $30,000 to $35,000 NCHA would not recognize on an annual basis. My question: “Had the numbers never been run before?”

 

As of 2019, one printed Chatter will be sent per household and printed rulebooks will be sent to current affiliates trainers, judges, certified secretaries and amateurs/non-pros, the goal being to print fewer copies. All others can request a copy. My question is: How will the members know and adhere to the rules if they don’t get a rulebook? How about putting a copy on their website for members to copy.

 

A discussion ensued regarding a method for NCHA to fund the current cash flow shortage citing three options: the liquidation of investments, requesting from our bankers, Frost Bank, a margin loan against our investments or opening a line of credit.

 

Discussion for other ways to save money was to reduce the number of Chatter issues published, as well as immediately reducing the number of issues of the Chatter sent to each household. Moving the payment of fees by members and vendors by ACH, i.e., the direct debiting of a member’s checking account. James V. Burris advised the Executive Committee that there are both positive and negatives to ACH payment methods.

 

Reducing the NCHA staff was also brought up; however, a it was stated that a thorough audit must be made by the various departments in the NCHA business office to identify items that can be eliminated immediately thereby reducing expenses as well as explore areas in the budget that may be reducing going forward. My question: “Why did they wait so long?”

 

Finance committee member, Steve Smith, said he would take the message back to the Finance Committee that they need to have a better handle on cash flow and structured budgeting process.

 

However, when it came to lowering costs of the events, which included the costs of the number of awards provided for NCHA events, they produced several options: (ie) reducing the number of buckles awarded, only giving them to the Top 10 and allow other finishers to purchase a buckle from Gist at the NCHA negotiated reduced rate; reducing the number of cattle per cutter by ¼ of cows in a go-round, bringing the total to a ½ cow reduction, which would reduce cattle costs by $200,624 (it was moved to reduce the cattle in each go round by an additional ¼ cow; thereby bringing the total reduction to ½ cow per go-round). The discussion was tabled until the Limited Age Event Committee had an opportunity to discuss this matter with the Executive Committee later.

 

Some additional costs were discussed, with some passing. The Amateur Committee recommended that there be a 5/6-year-old gelding Unlimited and Amateur classes at $535, with $450 going to the jackpot, $50 to office charge and $35 for processing fee. Motion passed.

 

The motion was passed recommending adding a gelding class to the 5/6 at ALL NCHA Triple Crown events, as a class within a class – no prizes or buckles, CASH ONLY.

 

The cost of the Rulebook was brought up and passed, with the cost of the 2018 edition being $11,461 for printing 10,000 and mailing out 8,183. Of that amount  $2,965 was for postage. NCHA copies to affiliates, amateurs, non-pros and judges, 4,500 amateurs, 1,000 affiliates, secretaries and judges total approximately 2,600. It was moved that effective with the 2019 rulebook year, 2,500 rulebooks be printed for distribution only to secretaries, judges and affiliates and they review how many are left at the end of the year, with the stipulation that if anyone calls NCHA requesting a copy, the staff will print off a copy and mail it to them.

As I mentioned previously, how about putting rulebook on their website so they can be downloaded by members?

 

John Rutherford agreed to Chair a Subcommittee on NCHA management, operations and financial efficiency. The subcommittee will be comprised of Kevin Knight, Joan Hayworth, Jan Gandy and Alvin ?  to help facilitate the completion of this study. The EC agreed to table taking further action regarding the proposed sub-committee until a new Executive Director was in place.

 

In closing, I would like to inform my readership that I’m currently waiting for the NCHA’s 2016 to 2017 IRS tax filing which is currently missing on GuideStar.org. As soon as I receive this document I’ll resume my audit of the NCHA as well as its income versus their operating expenses.

 

My question is, “Is the NCHA really acting as a Non-Profit?”

 

To read complete results of the NCHA Executive Committee, click below:

1-ec-meeting-minutes-august-8-18

Click below for “What Is A Non-Profit?”

2-What is a Non Profit_

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