1. ©2012 CliftonLarsonAllen LLP 1 111 ASAE Foundation’s Association 990: A Powerful Tool for Benchmarking John N. Dripps, CPA National Association of Secondary School Principals Nat Bartholomew, CPA CliftonLarsonAllen LLP

2. ©2012 CliftonLarsonAllen LLP 2 Agenda Define benchmarking and trend analyses Why benchmark (quick summary) What tools are available (benefits / limitations) ASAE Foundation’s Association 990 Identifying key metrics Utilizing ratio analyses Case study – NASSP

3. ©2012 CliftonLarsonAllen LLP 3 Benchmarking – Internal and External Internal = Trend Analyses Utilizing historical financial and non-financila information from your organization to spot trends External = Benchmarking Utilizing financial and non-financial information from peer organizations to evaluate performance, financial condition, etc.

4. ©2012 CliftonLarsonAllen LLP 4 Why Benchmark? To compare like attributes or metrics from similar demographic data samples –To uncover business processes, practices, and strategies To provide a baseline for performance improvement To gain best practices –Measure by fact rather than intuition or opinion Benchmark when you want to … –Make better-informed decisions –Answer the question “how do I compare?” –Take pulse of your financial health –Obtain a single version of the truth

5. ©2012 CliftonLarsonAllen LLP 5 Why Benchmark? As a way to share and collaborate, stimulate conversation and reflection, advocate for yourself, and take pulse of environmental trends.

6. ©2012 CliftonLarsonAllen LLP 6 What Tools Are Available – Benefits/Limitations –Similar organization Federal Form 990 (public document) –Annual reports or published financials –GuideStar – Lots of information stemming from filed Federal Form 990s –ASAE’s Operating Ratio Report (ORR) or Association 990 –NTEN – IT statistics –NCCS – Operating reserves

7. ©2012 CliftonLarsonAllen LLP 7 What is ASAE’s ORR Compilation of financial data from participating associations First published in 1953 Collected via Federal Forms 990 and survey supplements 660 valid surveys utilized in 13 th Edition – 5% more than prior ORR – and 8¼% response rate Compiled ’07 issued ’08 Next edition due out 2012!

8. ©2012 CliftonLarsonAllen LLP 8 ORR – Respondent Profile 67% were 501(c)(6) / 28% (c)(3) 47% reported total gross revenue > $5M Typical or median organization was $3.8M Largest concentrations - DC 27% / Chicago 10% / NY 3%

9. ©2012 CliftonLarsonAllen LLP 9 Extracting Relevant Data ORR Cuts Data By Several Categories Total Revenue (Six Tiers) Membership Type – Trade vs. Professional IRS Tax Status (c)(6) vs. (c)(3) Geog. Scope (Int’l/Nat’l or Regional/State/Local) Metropolitan Area (e.g., DC, NY, etc.) Industry Sector/Interest Area (e.g., Bus/Industrial, Education, or Healthcare/Medical – Each Separated by Membership Type) ORR Interactive

10. ©2012 CliftonLarsonAllen LLP 10 Trend Analyses - Investment Composition (as a percentage of total assets)

11. ©2012 CliftonLarsonAllen LLP 11 Trend Analyses – Dues as a Percentage of Revenue (Dues Reliance)

12. ©2012 CliftonLarsonAllen LLP 12 ASAE Foundation’s “Association 990”

13. ©2012 CliftonLarsonAllen LLP 13 ASAE Foundation’s “Association 990” Federal Form 990 – core form only 18,952 ’08, 19,693 ‘09 and 23,339 ‘10 990s thus far Functionality allows data sorts on the year and … –501(c) class (9 choices) –Number of employees (6 tiers) –Total revenue (8 tiers) and total expense (8 tiers) –Membership revenue (8 tiers) –Investment asset balance (8 tiers) –Unrelated business income (7 tiers) –Accounting method (accrual, cash or other) –ASAE member (yes/no) –State (52, includes DC and PR) –Metropolitan area (36 different areas)

14. ©2012 CliftonLarsonAllen LLP 14 ASAE Foundation’s “Association 990” Suite of Tools Association 990 - Key Ratios –Predefined reports – key ratios, revenue and expense detail, and balance sheet detail –Generated online –Sort functionality enumerated on the prior slide –Ability to export to Excel, Word or Adobe –Ability to print PDF copies of any Assn’s 990 Association 990 - Agenda Items –Drawn from the aggregate data, these slides (PDF and PPT) provide comparative data on policy, procedure and certain organizational measures

15. ©2012 CliftonLarsonAllen LLP 15 Example Queries - Various Demographic200820092010 All Associations18,95219,69323,339 501(c)(3)6,8307,7798,342 501(c)(6)4,9924,9716,158 DC Area1,1641,1881,288 New York Area604561567 Chicago Area562600598 LA Area349402368 Dallas Area146153170

16. ©2012 CliftonLarsonAllen LLP 16 Example Queries – Number of Employees Employees200820092010 All18,95219,69323,339 </= 55,4175,9398,457 6 – 103,0383,4424,351 11 – 203,2373,2063,760 21 – 503,1203,1953,384 51 – 1001,6731,6211,532 100+2,4672,2901,855

17. ©2012 CliftonLarsonAllen LLP 17 Example Queries – Size (Revenue) Total Revenue200820092010 All18,95219,69323,339 </= $1M9,39810,93115,408 $1 - $2M3,8143,4283,271 $2 - $5M3,2562,9822,700 $5 - $10M1,3561,2591,057 $10 - $20M605580485 $20 - $30M199170144 $30 - $50M138146114 Over $50M186197160

18. ©2012 CliftonLarsonAllen LLP 18 Best “Average” Measure Median – ½ respondents above; ½ below Mean – sum of all cases / total # of respondents Median is a better measure for average when the upper limit is theoretically infinite (e.g., number of members in reporting associations, annual budget for reporting associations), as the mean can be strongly affected by very high values. 2010 # Employees (Mean = 79.8 / Median = 9.0) 2010 Total Rev. (Mean = $3.5M / Median = $563K)

19. ©2012 CliftonLarsonAllen LLP 19 Compensation Geographically Median / Mean (Total Revenue >/= $1M) DemographicChicagoNYCDC # Associations289318838 Median Revenue$3.5M$3.2M$3.8M Average Revenue$10.5M$11.0M$14.6M Median Compensation$52,462$51,953$69,131 Average Compensation$53,484$63,544$79,415

20. ©2012 CliftonLarsonAllen LLP 20 Dues / Total Revenue = Dues Reliance Gross Revenue200820092010 < $1M35.9%36.1%36.8% $1 - $2M40.8%40.3%40.9% $2 - $5M43.9%43.4% $5 - $10M41.5%41.0%42.5% $10 - $20M36.0%34.8%35.6% $20 - $30M29.0%32.1%31.5% $30 - $50M32.1%28.4%33.6% Over $50M28.4%28.1%28.8%

21. ©2012 CliftonLarsonAllen LLP 21 2010 Average Compensation Geographically

22. ©2012 CliftonLarsonAllen LLP 22 2010 Average Benefits by Size (based upon total revenue) Average Size (Revenue)PensionBenefits </= $1M$766$1,801 $1 – $2M$2,194$3,726 $2 - $5M$2,585$4,520 $5 - $10M$2,599$4,920 $10 - $20M$3,321$6,881 $20 - $30M$4,522$6,672 $30 – $50M$5,381$7,143 >$50M$6,762$14,156 All$1,399$2,773

23. ©2012 CliftonLarsonAllen LLP 23 2010 Average Pension and Benefits by Size (based upon total revenue)

24. ©2012 CliftonLarsonAllen LLP 24 Median Number of FTEs (Full-Time Employees) Year5M10M20M30M50M 20093289108149199 2010296296137226

25. ©2012 CliftonLarsonAllen LLP 25 2010 Revenue Growth (expressed as a percentage of revenue)

26. ©2012 CliftonLarsonAllen LLP 26 Unrelated Business Income – 2008/09/10 ClassificationPercentageNumber of Records All Organizations2.7%18,952 2.5%19,693 2.5%23,339 501(c)(3)0.9%6,830 0.8%7,779 0.8%8,342 501(c)(6)3.8%4,992 3.6%4,971 3.3%6,158

27. ©2012 CliftonLarsonAllen LLP 27 Unrelated Business Income – 2008/09/10 Total RevenueAll Associations501(c)(3)501(c)(6) $0 - $5M2.8%0.8%3.8% 2.5%0.8%3.7% 2.6%0.7%3.3% $5 - $20M2.7%0.9%3.7% 2.4%1.0%3.2% 2.3%1.0%3.3% $20M+2.0%1.5%3.5% 1.7%1.1%3.1% 1.6%1.3%2.6%

28. ©2012 CliftonLarsonAllen LLP 28 2010 Investments as a % of Total Assets

29. ©2012 CliftonLarsonAllen LLP 29 After Login – 1 St Page – Association 990

30. ©2012 CliftonLarsonAllen LLP 30 Building Your Report

31. ©2012 CliftonLarsonAllen LLP 31 Selecting One or More Categories

32. ©2012 CliftonLarsonAllen LLP 32 Generate the Report

33. ©2012 CliftonLarsonAllen LLP 33 Four Tabs

34. ©2012 CliftonLarsonAllen LLP 34 Tab 1 - Key Performance Ratios

35. ©2012 CliftonLarsonAllen LLP 35 Exporting to Excel

36. ©2012 CliftonLarsonAllen LLP 36 Tab 2 – Revenue and Expense

37. ©2012 CliftonLarsonAllen LLP 37 Tab 3 – Balance Sheet

38. ©2012 CliftonLarsonAllen LLP 38 Tab 4 – Ratio Definitions

39. ©2012 CliftonLarsonAllen LLP 39 Horizon Upgrades Contemplated Access to filed Federal Forms 990, similar to GuideStar Quartile results Association segments by industry/interest area (e.g., business/industrial, education, healthcare/medical, etc.) Ability to create comparison groups Drill-down functionality Slide generator Trend analyses functionality when multiple years of data are available Addition of Federal Form 990 Schedules to the database (e.g., Schedule J)

40. ©2012 CliftonLarsonAllen LLP 40 Identification of Critical Indicators (Key Metrics) Financial Metrics Non-Financial Metrics

41. ©2012 CliftonLarsonAllen LLP 41 What Are Your Key Financial Metrics Unrelated Business Income Investment Income Total Membership Dues / Non-Dues Revenue For-Profit Subsidiary Dividends Total Contributions / Total Unrestricted Contributions Exposition $ Certification $ Publication $

42. ©2012 CliftonLarsonAllen LLP 42 What Are Your Key Non-Financial Metrics Number of Attendees Number of Members Number of CE Hours Delivered Number of Certificants Number of Donors Number of Clients Served

43. ©2012 CliftonLarsonAllen LLP 43 Basic Ratios Current = Current Assets (CA) / Cur. Liabilities Quick = CA Less Inventory / Current Liabilities Leverage = Total Liabilities / Total Net Assets Dues Reliance = Member Dues / Total Revenue Inventory Turnover = Sales / Inventory Avg. Collection Pd. = AR / Sales Per Day ROI = Income / Avg. Investment Balance

44. ©2012 CliftonLarsonAllen LLP 44 ©2012 CliftonLarsonAllen LLP The NASSP Story Using Financial Metrics - Information is Power

45. ©2012 CliftonLarsonAllen LLP 45 National Association of Secondary School Principals 25,000 individual members 97 staff (92 FTE) $23M budget 501(c)(3) Student programs serve over 30,000 schools and more than 1 million students Own HQ building w/35,000+ sq. ft. – Reston, VA

46. ©2012 CliftonLarsonAllen LLP 46 National Association of Secondary School Principals Multi-Year Financial Ratio Comparison June 30, 2010 Ratio Dashboard

47. ©2012 CliftonLarsonAllen LLP 47 ©2012 CliftonLarsonAllen LLP 2010 National Association of Secondary School Principals

48. ©2012 CliftonLarsonAllen LLP 48 Total Liabilities Total Net Assets Statement of Financial Position Liabilities and Net Assets

49. ©2012 CliftonLarsonAllen LLP 49 Total Liabilities -- $11,713,093 Total Net Assets – $5,582,436 2.10 Displays on the Dashboard Current Ratio

50. ©2012 CliftonLarsonAllen LLP 50 National Association of Secondary School Principals Multi-Year Financial Ratio Comparison June 30, 2010 Debt to Equity

51. ©2012 CliftonLarsonAllen LLP 51 National Association of Secondary School Principals Multi-Year Financial Ratio Comparison June 30, 2010

52. ©2012 CliftonLarsonAllen LLP 52 National Association of Secondary School Principals Multi-Year Financial Ratio Comparison June 30, 2010

53. ©2012 CliftonLarsonAllen LLP 53 That’s a Wrap!