Mark Koscinski Uncategorized

Another Round of Horseshoes

Time for Another Round of Horseshoes!

This blog started using horseshoe scoring for important events in the NFP and state government world.  Here is the result of the second round of horseshoes: 

A Double Ringer–that’s right, six points!  Rare indeed for this column. The double ringer was scored by the Bill  and Melinda Gates Foundation, combined with the Rotary. Yes, I know. I am not a big Bill Gates fan.  However, only the most bitter of critics would not acknowledge his foundation and the Rotary may commit  up to $1.5 billion to end childhood polio in the world. We in the United States have taken this for granted for a long time. Hopefully, the rest of the world will be able to do so as well soon. The following websites have more information:   

https://www.forbes.com/sites/michelatindera/2017/06/12/gates-foundation-and-rotary-pledge-additional-450-million-to-end-polio/#78aa249a65ec

https://www.gatesfoundation.org/what-we-do/global-development/polio

Missing the stake–Following the lead of several other states,  New Jersey is considering banning independent contractor status.  Businesses are already fleeing the State because of high tax rates and the inhospitable climate there.  The current Governor and his administration is devising yet another way to impose a burden on business. Governor Murphy is in line to receive the Grinch award at this holiday season.  Additional information can be found at:

https://www.washingtonexaminer.com/news/proposed-new-jersey-legislation-threatens-independent-contractors

Not only missing the stake, but the entire horseshoe pit— The former mayor of Baltimore was indicted on eleven counts of  fraud, conspiracy and tax evasion charges. To be sure, the mayor is entitled to the presumption of innocence and her day in court. The articles on this webpage have talked about the need for internal control in NFP and governmental entities. The most critical component of internal control is the control environment, often referred to as the “tone at the top”.  If the head of the organization and the executive management exhibit a concern for effective internal control then the rest of the organization will too. Perhaps this sounds a bit cynical, but if the person at the top of the pyramid is alleged to be defrauding other people, including NFP entities, the finance department and the auditors may want to be a little more cautious as they are carrying out their duties. 

https://www.baltimoresun.com/politics/bs-md-pol-pugh-20191120-kzmc2v7cafetjladglhgnyusdy-story.html

Mark Koscinski Uncategorized

Another Good Semester at Stitches

Clubs and voluntary associations have been with us for a long time and have had a profound influence on the world.   For instance, many scholars believe the early Christian Church was organized in much the same way ancient Roman clubs were organized.   Many of these associations were for eleemosynary purposes.  This tradition goes on to this day.  A great deal of charitable work is still done by voluntary associations and clubs such as fire departments, emergency rescue squads, and the Coast Guard Auxiliary just to mention a few.  Members of these organizations demonstrate the best qualities of humanity, contributing their time, talent, and treasure to improve the lives of others.

I have been proud to be the faculty adviser to the Moravian craft club, Stitches. Though this club is not as old as Roman clubs (by maybe two millennia…), Stitches’ members have crocheted clothing items for those in need now for years.  Their devotion has been remarkable. As this semester winds down, I want to give a special shout out to another member of the Moravian faculty, Dr. Kristin Baxter, associate professor of art for giving her time and talent to the club this semester.  All members surely appreciated her presence.  The officers of the club all worked hard this semester.  Special thanks go to Gabriela Landi, the group president.  She will be going off into the working world at the end of this semester.  We wish her all the best! I congratulate the new president and executive board as they undertake their new duties at the end of this semester. I can’t mention everyone and their contribution here, but you know I appreciate your participation and I look forward to next semester.

Note: Moravian student clubs decorate the benches at the College.  The picture is the bench decorated by Stitches.

Mark Koscinski Uncategorized

Horseshoes

Horseshoes is a familiar lawn game in the United States, especially during the summer holiday seasons.  The rules of the game and scoring are simple. Players throw the horseshoe at a stake about forty feet away.  A horseshoe completely enveloping the stake (called a “ringer”) is worth three points; one leaning on the stake (called a “leaner”) is worth two points; and the closest to the stake is worth one point if there are no ringers or leaners.   I will be using this scale to rate some Not-For-Profit (“NFP”) entities in the news recently.

A Ringer:  Grant Thornton, an international accounting firm, announced it will help smaller NFP entities with financing.  Larger NFP organizations can find funding more easily than smaller entities. A smaller entity might be doing excellent work in a niche area and may never attain enough critical mass to attract funders.  Alternatively, an NFP might be in a start-up phase and is struggling with working capital.  Grant Thornton is graciously funding selected NFPs through its Purple Paladin program. For more information, please see their website at: https://www.thenonprofittimes.com/foundations/grant-thornton-launches-funding-for-emerging-npos/. This is wonderful news from a great organization. 

A Leaner:  Amtrak anticipates breaking even in 2020, fantastic news for this railroad system since it has run losses for almost fifty years.   The most recent year saw Amtrak posting an operating loss of approximately $30 million (that’s right—million with an “m” and not billion with a “b”) dollars, setting the stage for its first breakeven year.  This would be fantastic, not only for the taxpayers and Amtrak riders, but for those with a sense of nostalgia.  W.W. Rostow (who was unfortunately called ‘Bomber Rostow” by one of my professors because of his support of the Vietnam War) claimed railroads were a leading industry in the development of the United States.  While this theory has drawn much criticism, it is fair to say the railroads were an important part of American history.

Completely Missing the Stake:  The U. S. Post Office estimated its loss for this fiscal year could be $8 billion.  Even worse, there is no turnaround in sight. The amount of first-class mail will continue to decline, and its unfunded pension liability has been estimated to be about $40 billion.  You don’t have to be a business school graduate to figure out declining revenues with big liabilities is not a good thing.

If you have any other favorites, please forward them to me for my next game of horseshoes!

Mark Koscinski Uncategorized

Thanksgiving

At this time of the year, we pause and give thanks for the many blessings we have in the United States. Besides being thankful for our friends and family, I especially want to give thanks for the following:

  • Not-For-Profit organizations such as MOCEANS Center for Independent Living, that provide necessary services to those in need or are disadvantaged in many ways; 
  • Volunteer associations such as the Coast Guard Auxiliary, fire departments,  and EMT crews that save lives;
  • Federal, State, County, and municipal governments that provide essential services to modern societies; and
  • Religious organizations  of all denominations that feed the poor and comfort the afflicted. 

These organizations are filled with hard-working, well meaning people who generally strive to improve the conditions of humanity in the United States and the rest of the world.  This is not to say these organizations are above criticism. Indeed, this blog often provides critique and commentary about not-for-profit organizational management. However, it behooves us to understand and remember  these entities often operate with limited budgets, personnel, and resources. Even with all the constraints they often perform miracles. We have reason to be thankful for their efforts during this holiday season.

Mark Koscinski Uncategorized

Can I Get a Pizza With the Works?

The United States Supreme Court declined to hear an appeal of an ADA case from a famous pizza company, thereby upholding the Ninth Circuit Court of Appeals. The court case revolved around whether the website of the company needed to be ADA compliant. The Ninth Circuit required the pizza company to make its website compliant with the ADA. The plaintiff in the case was visually impaired and couldn’t navigate the company website. The pizza company argued there were many alternative methods of ordering a pizza, ranging from voice activated applications to text messaging. In the end, the court disagreed with this analysis. I can clearly sympathize with the company as this will be an additional operating cost in a very competitive industry. Nevertheless, the digital world is becoming more and more prevalent as a “workplace”. Look at the growth of Amazon as an example. From a purely humanitarian (and now legal) basis, the Supreme Court got this one right.

Mark Koscinski Uncategorized

We Interrupt Our Coverage….

This blog is normally used for commentary on not-for-profit management issues. However, today I am going to make a shameless plug for two of my books, both of which can be found on Amazon:

The Gospel Of James And Other Gems of Eastern Christianity: Pearls Of Great Wisdom From The Eastern Church  – August 3, 2019

https://www.amazon.com/gp/product/1087260744/ref=ppx_yo_dt_b_asin_image_o00_s00?ie=UTF8&psc=1

This is an anthology of my writings for my former parish website and adult education classes.  Most Western Christians know extraordinarily little about Eastern Christianity.  Very few people understand its vibrant and rich history.  This book brings Eastern Christianity alive, discussing a wide range of topics germane to the religious world today.  

Living The Eastern Christian Faith: A Guide for Byzantine Christians – July 2, 2019

This is a small workbook useful in a four- week adult education course on Eastern Christianity.

I am also in the process of editing and developing textbooks for management courses in conjunction with a great publisher.  More on that later.  Stay tuned.

Mark Koscinski Uncategorized

Digital Disaster As Cyber Attacks Spread

As if operating an NFP entity is not tough enough, a whole new challenge has appeared on the scene.  Recent coordinated cyber-attacks on over twenty Texas cities show how vulnerable municipal governments and NFP entities can be to ransomware attacks.  The targets of these attacks have generally been small rural towns not having the sophistication or budget to secure their information processing systems.  Sadly, this description could apply to many smaller NFP entities as well.  Put another way, the next round of targets could be your NFP organization.  Hospitals have already been targeted, so it is just a matter of time before other NFPs are. This is an appropriate time to make sure your systems are backed up and your disaster recovery plans are up to date. Board members and trustees, it is your responsibility to make sure your organization is protected against these attacks.  Could your organization survive such an incursion?  How long would it be before business would grind to a halt?  How would regulators view a data breach of medical records or the inability to provide services your organization is contracted to perform?  These are all questions your executive director needs to provide answers to.  Waking up one morning and finding your organization’s systems have been hacked or shut down due to ransomware is not what wise trustees or directors do.

Mark Koscinski Uncategorized

Baltimore

In the middle of the back and forth between the President of the United States and officials from Maryland and Baltimore about the fiscal management of Baltimore, critical issues are not being openly discussed.  Three months ago (before the current political nastiness started) I authored an article about the accounting and auditing issues Baltimore had encountered.  The article was written from a clinical perspective, analyzing some of the deficiencies in Baltimore’s internal controls.  The lack of an appropriate control environment was the gravest.  The link to the article is: https://wordpress.com/block-editor/page/mark-koscinski.com/534

Mark Koscinski Uncategorized

Crisis Management in an NFP

The Roman Catholic Diocese of Wheeling-Charleston, West Virginia recently announced its former bishop has been sanctioned by the Vatican.  The bishop was accused of sexual and financial misconduct. I will leave the sexual misconduct issues to others, but I do want to look at the financial misconduct issues purely from an NFP management perspective.

As part of the sanctions, the bishop was ordered not to live in the diocese.  Effectively, this means he will need to leave the State of West Virginia since the Wheeling-Charleston diocese encompasses the entire state. He has been prohibited from conducting public religious celebrations and will need to make restitution. [1]  That sounded good so far, but I was waiting for more.

Any organization facing a crisis needs to do three critical things:  fix the problem, prevent the problem from reoccurring, and be transparent.  While the Vatican fixed the problem by removing the bishop from office and instituting new internal controls in the diocese there was no discussion of how this particular person was selected to be a bishop, why the Vatican took so long to respond to warnings,[2] and what it is going to do to prevent this from happening again. In short, its response seemed dramatic but lacked essential elements of proper management. Perhaps the Vatican made nal improvements it did not announce.  Even so, that would fail the transparency requirement.  Constituencies are forgiving but they like to know this won’t reoccur.  The bishop’s successor has already been criticized as being a good man but not the right person for the job.[3]  I can only wish him luck.

Lest anyone should think this is an isolated incident, the Vatican also reinstalled a major archbishop (effectively equivalent to an Eastern Orthodox patriarch) in India who also had been accused of financial mismanagement.  In this case, the major archbishop entered into a real estate transaction that resulted in an inexplicable loss.  There were no reasons given what the result of the Vatican investigation was.  As a result, there have been major protests against his reinstatement. [4] All this could have been avoided if the Vatican followed simple principles of management. 

Not-For-Profits everywhere,  let this be a lesson. Remember:  fix the problem, make sure it doesn’t reoccur, and be transparent about how it occurred. 

[1] https://www.americamagazine.org/faith/2019/07/19/pope-francis-issues-disciplinary-measures-bishop-bransfield Accessed July 25,

[2] https://www.americamagazine.org/faith/2019/06/12/explainer-how-could-bishop-bransfield-misuse-funds-years-without-raising-red-flags  Accessed July 26, 2019

[3] http://whispersintheloggia.blogspot.com/ Accessed July 25, 2019

[4] https://cruxnow.com/church-in-asia/2019/07/24/catholic-priests-in-india-protest-cardinals-return/ Accessed July 21, 2019

Mark Koscinski Uncategorized

The Power to Regulate is the Power to Destroy

Lyft Inc. (Lyft or the Company) has been on the receiving end of several lawsuits lately. As its stock price has plunged after its initial public offering (IPO) a class action lawsuit has accused the Company of securities fraud.  This lawsuit has garnered far more attention than the second, the subject of this blog.   The second lawsuit challenged Lyft’s compliance with the American Disabilities Act (ADA).  In response to this lawsuit, Lyft had denied it is subject to the ADA.  Its court filings claim the Company is really a technology and not a transportation company. Critics of Lyft have argued it could subsidize its drivers to make their vehicles ADA compliant, or it could find more driver who already own ADA compliant vehicles.  Both suggestions are more easily said than done.  

Lyft has lost approximately $2.0 billion in the last three years.  It lost a further $1.1 billion in the first quarter of 2019.  To put this in perspective, the IPO raised $2.3 billion.  You do not need an MBA to figure out the Company’s ability to take any action is severely constrained in the short run, especially since its IPO is being challenged.  The prospectus said the Company expects loses to intensify as it tries to bring new products to market. 

While I am a proponent of the ADA, I am reminded of the famous quote from Daniel Webster and Chief Justice John Marshall, “the power to tax involves the power to destroy”.  In modern America, we all need to understand the power to regulate is also involves the power to destroy.  I am in no way an expert in this industry, but I do understand the economic concept of the short and long run. I hope the ADA matter can be settled in a way that does not unduly burden the company in its fight for survival in the short run while providing for the ADA in the long run.  That would be a win-win situation.