Arbor Update

Ann Arbor Area Community News

Friendships Strained at AADL

22. September 2006 • Scott TenBrink, Guest Contributor
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The Ann Arbor District Library has made moves to distance itself from the Friends of the Ann Arbor District Library as a result of a $10,000 donation gone awry and the discovery that the Friends had lost their non-profit status in 2003.
In the minutes of the special board meeting on Sept 6 the board shifts the relationship from friendly to parental stating, “There needs to be a high degree of cooperation between the two organizations as this situation is resolved. As a public institution, AADL must require the Friends of AADL to conduct business in a manner that is responsible and accountable.”

The bookshop that is run by the Friends in the basement of the AADL has been shut down indefinitely and the AADL is asking the Friends to go through an audit, which the Friends interpret as unfriendly, according to quotes in the AANews.

  1. The library comes off as the heavy in this but the Friends have no one to blame but themselves for this situation. Considering the not-so-distant financial problems that the library experienced, I don’t blame them for distancing themselves from this.

    There’s no excuse for the Friends’ failure to maintain their non-profit status. This didn’t just happen. They haven’t had it since 2003. How many people have claimed a deduction for a donation to the Friends, not realizing that they were doing so improperly? How many people did the Friends give the impression that they could claim a deduction after they had lost their nonprofit status?

    As far as an audit, considering the volume of cash they must handle and the revenues and expenditures made by the group, why wouldn’t you want one to ensure you’re properly accounting for everything? This is the norm these days among major non-profits and you often are not eligible to get grants and other funding if your organization doesn’t have the finances undertaken on a regular basis.

    Fortunately, it sounds like the new leadership of the Friends has this issue well in-hand. I’m sure once the Friends get their act together, the library will be more than willing to work with them to return the booksale and other Friends activities back to the library.

       —John Q.    Sep. 22 '06 - 10:29PM    #
  2. a comprehensive audit can be enormously inconvenient to a non-profit organization’s staff …

    ... but eight years on the board of directors of a non-profit association (with a multi-million dollar annual cash flow) taught me that

    • a thorough audit,

    • follow-through on auditor’s recommendations, and

    • regular audit follow-ups

    are essential to maintaining trust and collegiality among the directors, staff, members, and financial supporters of a non-profit.

       —peter honeyman    Sep. 23 '06 - 06:48AM    #
  3. The News posted this editorial, which agrees with John Q.
    “Parker and the library board are right to set rigorous criteria for this affiliated group, as difficult as it may be for a volunteer organization to comply.”

    The Friends can hardly redirect the blame for bad accounting and missing paperwork. In fact, they appear to have taken full responsibility for these significant screw-ups. But at the same time, I wonder if the AADL board is shooting themselves in their collective foot. The Friends provide $90,000 to the library every year, and that doesn’t include any of the volunteer efforts. The library says this money goes to marketing and promotion, so they can live without it for a while. But they may end up living without it permenantly if the volunteers at the Friends feel that their efforts are not appreciated.

    The editorial mentions that the Friends will now have to pay rent for the bookstore space. There may be good legal and accounting reasons for doing so, but there is a negative image associated with charging a volunteering non-profit for fund-raising efforts that provide your organization, exclusively, with donations.

    Now the Friends have to continue to raise money, without income from the bookstore, to cover the costs of qualifying to support the library, a generosity they have already provided for about 50 years. At the same time, fund-raising levels are likely to fall as a result of the bad press (well deserved as it may be).

    If I was already skeptical about donating to the Friends because of their poor accounting practices, I’m even less willing to part with cash that will be used to cover audits and organizational revamping necessary before further donations can be passed on to an organization who says they don’t need the money that bad anyway.

       —Scott TenBrink    Sep. 25 '06 - 12:29PM    #
  4. Let’s be reasonable here. The tax law is clear and plenty of CPA’s will do the 990 and the License to Solicit for a reasoable fee. It’s not that hard. There’s no need for an audit unless gross receipts put you in that category. Most CPA’s would do a review for a reasonable fee. Quickbooks Pro is about $360 and a lesser version is $200. So sorry, my tear ducts are dry on this. The damage the old board caused is unconscionable. We all need rules and regulations and those pertaining to a $90,000/year organization are not onerous.

       —Robert D Shannon CPA    Jan. 9 '08 - 11:03PM    #