A Board Conversation: Developing an Appreciation for Depreciation

Posted on by Hilda Polanco, Founder and CEO of Fiscal Management Associates

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For board members who do not have a background in finance and accounting, the concept of depreciation can be somewhat of a mystery. What is it really? And if no one is showing up on our organization’s doorstep with a bill for depreciation, do we really need to “fund” that expense line?

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Hilda Polanco

As the conversation below illustrates, the reality is that funding depreciation can be a critical piece of an organization’s financial management strategy, especially if your organization owns a building.

Imagine you are a new board member for Community Theater Productions, a local theater company that has been providing quality productions and educational programming in your local community for nearly 50 years. It is your first board meeting and one of the board’s tasks for the meeting is to approve the budget for the coming season.

You’ve read it over and, in general, the budget makes perfect sense. While there isn’t much of a surplus, the organization isn’t planning on running a deficit, which seems positive.  There are lines for staff salaries, actors, costumes, fundraising, marketing, and many other expenses that seem essential to running the theater. But one line stands out: depreciation, a single line item, makes up almost 5 percent of the total budget.

Where in the world is all that money going, and couldn’t it be put to better use in an organization that is barely breaking even? You decide to schedule a call with the Board Treasurer, Cathy, before the meeting to better understand the need for depreciation in the budget.

You: Cathy, thanks for chatting with me. First of all, what exactly is depreciation?

Cathy: Depreciation is the way we account for the wear and tear of our fixed assets, like our building or large equipment. Instead of accounting for the full value of a large asset in the year we buy it, which would show up as a huge expense and would require a significant amount of funds all at once, we figure out the useful life of our assets and divide out the expense over how long we think we’ll use it. Essentially, each year we want to account for how much of the asset we are using that year. In our case, because we own the building our theater is in, fixed assets are a huge portion of our resources to operate and therefore depreciation makes up a large part of our budget.

You: Okay, but where is the money actually going? Is this like a mortgage payment?

Cathy: No, we are lucky that we own our building outright and don’t owe a mortgage. But even if we did, depreciation is different. It’s not cash going to pay for the building, because we already paid for the building when we bought it. Technically, depreciation is a non-cash expense, so the cash doesn’t have to go anywhere. In our case though, we actually take that depreciation amount and we transfer it into a capital fund each year, where we can hold that money for any replacements or or any new large asset purchases we need to make. That is what we refer to as our capital budget.

You: Got it, that makes sense. It’s like we’re saving for future purchases.

Cathy: Exactly. Capital investments are a huge expenditure when they come up, and there can be a lot of risk associated with them. What if we needed to buy a whole new lighting system for the theater suddenly? That actually happened a few years ago. We could have undertaken a capital campaign to raise money, but that would have taken months, and in the meantime, we wouldn’t have been able to produce any shows. Funding depreciation every year allowed us to fix the problem immediately and go on with our season. I’ll be honest, we haven’t always been able to fully fund our depreciation amount in some of our leaner years, but we always put as much as we can into the budget, and into the capital fund each year.

You: Thanks Cathy, this was really helpful. In fact, I’m also on the board of the Community Music School and I’m not sure we’re properly accounting for the depreciation of our building. I’ve seen it on the audited financial statements, but not in the budget. I’m going to bring it up at our next meeting.

Hilda Polanco is the Founder and CEO of Fiscal Management Associates, the go-to advisor foundation and nonprofit leaders seek when addressing nonprofit financial management capacity. Hilda provides capacity building, training and coaching services to foundations and nonprofits throughout the country

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Arts Education in New Jersey Schools Continues to Grow

Posted on by New Jersey Arts Education Partnership

VH1 Save the Music photo

New Jersey continues to lead the nation through the release of detailed arts education information to the public and the research findings look promising—a 4% increase in high school arts participation from the previous year with significant increases in dance and theater participation.

These findings are based on the arts educator assignment data for all schools and the high school arts participation data from the New Jersey School Performance Reports just released by the New Jersey State Department of Education. The findings for the 2013/2014 school year are accessible through the Interactive School Performance Dashboards for Arts Education created by the New Jersey Arts Education Partnership found at www.artsednj.org.

According to the new state data, 94 percent of schools in New Jersey reported offering arts education programs that provide access to nearly 1.3 million students (97 percent of all students). Student participation in high school arts programs grew to just under 50 percent of all students.

“New Jersey continues to provide innovative policies and pioneering initiatives for arts education by offering detailed information about the status and condition of arts education in every school across our state,” commented Robert Morrison, Chair of the New Jersey Arts Education Partnership. “We appreciate the New Jersey Department of Education’s support for including the arts in the School Performance Reports, recognizing the important role they play in the educational development of all our students.”

According to Morrison, the findings also reveal that Music and Visual Art are nearly universally available (87 percent of schools reaching 92% of students for Music and 85 percent of schools reaching 91 percent of students for Visual Art).

Among the other key findings for all schools:

  • The percentage of schools providing Dance and Theater continues to lag (7 percent and 4 percent, respectively).
  • 80 percent of schools reported the presence of both Music and Visual Art providing access to 88 percent of all students.
  • Key Findings for High Schools:
  • A total of 49.3 percent of high school students were enrolled in one or more arts disciplines during the 2013-14 school year (representing 191,974 unique students). This represents a 4 percent growth in arts enrollment from the prior year.
  • Among the arts disciplines, visual art has the greatest percentage of enrollment at 31.1 percent (117,613 students) followed by music at 17.5 percent (68,354 students), theater at 3.9 percent (15,261 students) and dance at 2.1 percent (8,087 students).
  • The increases in enrollment were across the board with Dance increasing by 13.5 percent, Theater by 11.5 percent, Music by 4 percent and Visual Art by 2 percent.
  • There are 7,182 professional arts educators providing arts instruction in New Jersey high schools (including 3,545 in music, 3,340 in Visual Arts, 191 in Theater and 106 in Dance). 84 percent of all arts teachers are assigned to one school.
  • Two out of every three high schools (66 percent) reported an increase in arts

The information does not address the quality of the programs, elementary and middle school participation or the impact of scheduling changes created by recent educational reform initiatives or new statewide assessments.

All of these areas require further The Interactive School Performance Dashboards for Arts Education allow citizens to interact with the information, explore student enrollment and levels of participation for each of the four arts disciplines (Dance, Music, Theater and Visual Arts) for all high schools as well as the presence of arts programs for every school. The data may be viewed by school, district, county or state totals. Schools and communities will also be able to compare their results to the averages for the entire state.

The call for including arts education as part of annual school reporting dates back to 2007 when the New Jersey Arts Education Partnership released the first-of-its-kind New Jersey Arts Education Census Report, Within Our Power.

Among the report’s many recommendations was that schools should “publicly report on an annual basis information regarding access to, level of participation in visual and performing arts education, and that this information be included as part of a state accountability system.”

New Jersey has long had some of the strongest requirements for arts education in the nation. Since 1996, the visual and performing arts (Dance, Music, Theater and Visual Arts) have been a part of the New Jersey Core Curriculum Content Standards and are part of the state’s graduation requirements.

Additionally, New Jersey was the first state to conduct a mandated study to document access, participation and quality of arts. In support of these requirements, research regarding the educational benefits of the arts for all New Jersey students (not just the gifted and talented) is compelling.

Various studies have identified links between involvement in the visual and performing arts and improved attendance, school engagement, increased academic performance, decreased drop out and discipline rates and higher levels of college attendance — areas of improvement vital to student success.

Just as important, the arts develop important life skills including problem solving, critical thinking, creativity and a recent study found New Jersey high schools with more arts education have a greater percentage of students who were highly proficient in language arts on the High School Proficiency Assessment test. High schools with more arts education have a higher percentage of students planning to enroll in a four-year college.

For more information about the School Performance Reports and information regarding arts education visit the New Jersey Arts Education Partnership website.

The New Jersey Arts Education Partnership (NJAEP) is a co-sponsored project of the New Jersey State Council on the Arts and the ArtPride New Jersey Foundation, with additional support from the Geraldine R. Dodge Foundation, the New Jersey Department of Education, the Prudential Foundation and Quadrant Research. The mission of the NJAEP is to provide a unified voice for a diverse group of constituents who agree on the educational benefits and impact of the arts, specifically the contribution they make to student achievement and a civilized, sustainable society.

*Above photo is courtesy of VH1 Save the Music Foundation

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Dodge Week in Review

Posted on by Dodge

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Catch up on the news around New Jersey with the Dodge Foundation in our Week in Review. Just click on the links to learn more.

 

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Building Journalism With Community, Not For It

Posted on by Josh Stearns

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At the end of last year Kristin Hare of the Poynter Institute was collecting tech resolutions for 2015 and asked for mine. Here is what I wrote:

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Josh Stearns

In 2015 I want to help more journalists build with their communities, not just for their communities.

At so many publications, journalists are rebuilding their newsrooms around new technologies from smartphones to social networks. But for the most part, the community is left on the other side of the screen. In 2015 there is a huge opportunity to engage communities in the work of helping build powerful journalism.

I want to help newsrooms design reporting projects, engagement strategies, web apps and more, through deeper collaboration, listening and empathy with our communities. Building for the community puts people at the end of the process. Building with community puts them at the start.

In the new year, let’s start the debate about journalism and technology with our communities.

At the Geraldine R. Dodge Foundation we believe that journalism sustainability is rooted in building stronger relationships between communities and newsrooms. The distinction between “building with” instead of “building for” feels at first like semantics. However, when we begin to use it as a lens to examine journalism as both a process and a product, we see numerous small and large ways it challenges the status quo. 

In the words of longtime editor Melanie Sill, it begins to “reorder the fundamental processes of journalism toward the goal of serving communities.” But it does so by recognizing that to serve a community we have to work with that community.

Transactional versus Transformational

The chart below by the former head of digital engagement for the Guardian, Meg Pickard, offers a pretty good indication of the gaps and opportunities that exist.

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The old model of building for audiences is rooted in a transactional approach to news. In Pickard’s chart the transaction is essentially the Y axis when the journalist hits publish. We create, you consume. We report, you decide. The importance of this transaction is baked into the business model for much of the news industry. We print, you pay.

But we are starting to see the disruption of that transactional approach. Community engagement increasingly tries to fill the gaps identified in Pickard’s chart above. At their best, membership programs focus on building community around the news, not just building a paying subscriber base. Solutions journalism is recognizing the expertise that exists in local communities and is finding ways to share it. Listening projects are helping reshape what stories get covered and whose voices get included.

The diagram below from WBEZ’s Curious City is a prime example of how building with can reshape every part of the editorial process.

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Together, these and other shifts hold the potential to help journalism move from a transactional product to a transformational process for local communities.

Creating in-roads for community participation and giving local people more power to contribute to local journalism efforts is complex and time intensive. However, the end result can be a public that is more engaged in their communities and in supporting local news. After participating in a Curious City reporting project Janice Thomsonwrote, “Many times I’ve asked myself ‘Why am I doing this? Isn’t electricity a tedious subject best left to experts?’ Knowing that the staff at WBEZ’s Curious City cared what I did, that they valued citizen input as much as that of experts, kept me going.” Based on her experience with Curious City, Thomson created Electric Community, “a series of interactive community-based activities to engage Chicago residents in ‘greening’ our electricity. Who knew a radio program could have so much power?”

Prior to this experience Thomson didn’t think local energy issues or journalism were any place for non-experts. But having reporters at WBEZ honor her curiosity and respect the expertise of her lived experience was transformational. When we build with our communities we build space for more people to shape our stories and cultivate a sense of ownership over the process. This shifts to locus of journalists’ authority from the act of publishing to the process of engaging. It makes journalism more accountable and more valuable.

Regardless of your business model, having your community deeply invested in what you do, is key to the long term sustainability of your work. Building with community is also about building more resilient organizations, rooted in relationships that can help both challenge and support you.

Close to The Ground

With funding from the Knight Foundation, we are working with local news start-ups in New Jersey and New York on how these ideas can help strengthen their work and their organizations. We are experimenting with creative revenue ideas rooted in community engagement and developing ways for newsrooms to listen more deeply to communities.

In my work with local news start-ups I see a hunger for new tools and models to help small teams of local journalists build new networks with their communities. These local journalists have the benefit of being close to the ground, deeply enmeshed in their communities and nimble enough to listen and adapt. But they are also stretched incredibly thin trying to run every aspect of the newsroom. Every community and every newsroom is different, so while we are looking for replicable intelligence, we are not searching for silver bullets. Building with our communities means that while we might share strategies, those models have to adapt to diverse local contexts.

We need to be more intentional about finding spaces and places across journalism to build with, rather than for our communities. But to do that we have to understand even more clearly what those two models look like.

Laurenellen McCann offers this description:

“With” implies togetherness, a network: a larger group, possibly, a messier group, but a group (meaning 2 people+) nonetheless. Acting “with” others implies certain degrees of collaboration, collective action, coordination, and even unity. You run a three-legged race with your partner (or you’re going to fall). When you use the word “with” it means that, however many people are involved, whatever their individual roles, they’re acting as one — or at least, towards a shared goal.

By contrast, when we use the word “for” we center on the experience of individuals in a relationship, with one unit acting on behalf of or doing something to another. (“For another.”) In the “for” universe, there’s usually a receiver and a giver. There can be many people involved or few, but there are almost always actors and those acted upon. In a democracy like ours, where we have government of, by, and for the people, we understand that when we vote for an elected representative, they are then empowered to speak and act for us. To govern for us….but with our consent.McCann argues that “‘For’ is the thorn in the paw of the ‘civic’ movement today. We espouse to build new, collaborative systems, new technologies, new relationships […] but we do so wielding old systems of power.”

And this last point is one we don’t talk about enough. When we talk about building with our communities we have to talk about power, and about new systems of power where we gain strength and sustainability from connections to each other not transactions between each other.

This post first appeared on the Local News Lab, dedicated to creative experiments in journalism sustainability. The Lab is a project of the Geraldine R. Dodge Foundation, supported by theKnight Foundation. Dodge’s partners are Montclair State University’s Center for Cooperative Media and its New Jersey News Commons initiative and CUNY’s Tow-Knight Center for Entrepreneurial Journalism and Center for Community and Ethnic Media.

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‘A Sure Hand’ Exhibit Celebrates the Simplicity of Drawing

Posted on by Dr. Lynn Siebert, Morris Arts Director of Arts Participation & Communication

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The newest art exhibit hosted by Morris Arts at the Gallery at 14 Maple features four New Jersey artists who use the medium of drawing to capture subtleties, delicacy, monumentalism and gesture in distinctive and memorable ways.

Not the two dimensional tracing of a line on a surface here but rather the power, the volume, motion and weight of each artist’s vision is captured in these exceptional and dramatic drawings which redefine the usual understanding of this medium and enhance our appreciation of its inherent magic.

A Sure Hand includes work by artists Sassona Norton of Bedminster, Doug De Pice of Secaucus, Neal Korn of Union and Arlene Gale Milgram of Trenton.

Art admirers are invited to a free opening reception for the exhibit, Morris Arts’ 13th exhibit, is 6 to 8 p.m. Wednesday, February 25 on the third floor of the Morristown Parking Authority building at 14 Maple Ave in Morristown.

“We selected works that embodied the defining element of drawings — simplicity …Drawing juxtaposes the austerity of the single line with the power of the image that emerges,” Curator Dick Eger said. “It is the sure hand of these artists that transforms the humble into the extraordinary.”

Responding to the “rich architecture” of hands, Sassona Norton’s works focus on the intricacies and complexity of the hand. Providing Norton with its variety of shapes and forms, the hand can mark the passing of time and express a remarkable range of emotions through gesture and position.

By using a much larger scale, filling an entire canvas with hands, Norton intensifies the details of the hands, capturing a sculptural quality, implying what is absent and reflecting both tangible and intangible qualities of humanity.

Eger said that through the work, Norton philosophizes  “about the shortness of life, the concept of yearning, the sadness of want and the fierce desire to change reality. She effortlessly folds these themes into her exuberant charcoals of hands.”

With work that is both visceral and metaphorical, Doug DePice captures the horror of the Holocaust in his dark and powerful drawings. The artist views art as a light in a world filled with the “darkness of ignorance and hate,” he said.

DePice’s The Chimneys is inspired by Eli Wiesel’s “Night.”

“I found the imagery of the smoke to appear heavy with the death of countless souls, and also thick with madness,” Dipice said.

Images of the Crematorium are “succinct, frightening,” he said. “To me, these forms are like giant tombstones of history.”

With his portraits of Anne Frank, DePice strives to give some artistic expression to Anne Frank’s haunting words. In the portrait of Anne’s face with tape and charcoal, DePice wanted the “surface to be scarred, marked and ripped as a visual reminder of the distress, anxiety, and uneasiness which gnawed daily at Anne’s psychological well-being,” he said.

Artist Arlene Gale Milgram considers her art to be abstract but, at its core, her way “of processing my life experience.” She channels her thoughts and works in different densities and rhythms, often reclaiming resources from “failed” works to start new pieces. Mixed media works are layered as is life – “full of false starts and new beginnings.”

“The scars that remain are maps of time and experience,” she said.

More  recently, Gale Milgram has focused on aging, support systems and “the fragile threads that hold us together.” She doesn’t expect the viewer to read her “story” in the works but rather to engage them, involve them in her images and enable them to connect to “shared humanity.”

The drawings of Neal Korn present viewers with a unique juxtaposition of familiar imagery and unusual, striking perspectives.

A simple portrait is literally turned on its head in a wash of color in Head Over to Seaport Marine and his portrayal of iconic images such as Lincoln’s monument or the Union Cannon grab the eye with their imaginative and dramatic vantage points as well as with a touch of humor and whimsy.

“That is my head being blown out of the cannon,” he remarked.

His Icon series includes drawings of images from Sandy Hook, Philadelphia, NYC and Baltimore. Combining a tight, analytical drawing style with the “loose” application of rice paper, to provide texture and contrast and add an intuitive component, Korn creates images of dramatic and intriguing appeal.

To view the catalogue for A Sure Hand exhibit, click HERE.

The exhibit is open to the public Monday-Friday from 10 a.m. to 4 p.m. and by appointment, and will remain on display through Aug. 27. Visit www.morrisarts.org or call (973) 285-5115 for additional information, including the exhibit catalogue which contains details and sale prices for all works. The Gallery at 14 Maple is a barrier-free facility. Individuals needing special accommodation should contact Kadie Dempsey at (973) 285-5115, x 17.

Morris Arts gratefully acknowledges sponsorship for this exhibit by NJ.com and additional support from The Geraldine R. Dodge Foundation.

Top Left, counter clockwise: Sassona Norton’s drawing, The Gift; Neal Korn’s drawing, Head Over to Seaport Marine; Arlene Gale Milgram’s drawing, Constant Motion; Doug DePice’s Portrait of Anne Frank with Tape; and Doug DePice’s drawing, The Chimneys.

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