pic by bob canada

pic by glenfairchild

Life decisions rarely do not effect others, so let’s get serious about spending within our means.

For Revenue:

First, pass a law that states all current tax breaks and deductions end effective December 31, 2012.  No other language.  The purpose is to set clean slate for both sides to build on. 

Second, pass a law that sets the tax rate for individuals and businesses with no additional language to be effective January 1, 2013.

Third, pass a law that has all taxes like social security, Medicare, gasoline, etc required to be invested for their intended purposes.  Congress cannot borrow against it and have an IOU. 

Fourth, pass a law of exceptions to be effective January 1, 2013.  Each exception must be voted on as an amendment so that the merits of why it is important or not can be recorded.  This provides citizens and businesses with the intent.  Each exception must have measurable intent which shall be required to be tracked.  If said exception is difficult to track than it should not be an exception.  This requires each party to identify the benefit for the intended group and the result that is betterment for our society.  It provides for a more transparent government.  It provides for a means to measure the expected outcome and the reasoning for whether in the future an exception should continue or be abolished. 

For Expenses:

Every budget should be built on a performance basis.  What is the allocations intended mission and vision and what are the results that it will be measured by?

Every budget should have a mandate to identify areas where non government entities could be given the authority to run said mission and vision with no government funding and as a joint venture. 

Every budget should have an ability to create a retain revenue opportunity where its mission and vision is investing in the future such as infrastructure, education, energy, housing, environment, etc.  This should be similar to what the Federal Reserve and government was able to do with financial institutions and auto makers.

Any grant or subsidy granted under a bid process by a federal agency should be limited to no more than five years.  Any said grant or subsidy which is continued beyond said time should be required to show that there is a sustainability plan for when the funding ends.  The intent of said grants or subsidy should not be for operating of a current program but to implement, complete or expand an initiative. 

I would even go as far as saying that a bid process should allow adequate time for submitting parties to devise a sustainability plan, when it is not a one-time initiative. 

The answer can no longer be; “We have always done it this way”. 

pic from jczart 

While there is lots of arguing over who is right, it is the results that count.  When one talks about tax reform and spending let’s try to remember how many people are employed just by the complexity that Congress has created.  By starting over and scraping the exemptions, credits, and deductions one can bring about a trillion dollars to be used to lower the current deficit.  This does not mean increased spending.  There should be no increase in spending by Congress.

It seems sensible to be ride of the fight over taxes and move to a consumption tax. This means the more you consume the more you pay.  This means industry would be motivated towards more innovation of the most cost effective product and lower ones consumption costs.

This should include a serious conversation about an end to the sales tax exemption to nonprofits as well. 

 pic from Sepponet

Heath Care care be a pleasant experience for employers and an employee or become the disaster that ruins the economy.  The means by which health care is delivered is a life style one is use to that just may have to change.  I question how close to the edge Congress is willing to bring the country to before it makes the math work.  

I had a good laugh the other day when my Governor said I am so proud of the action we took last year rejecting the double digit increases requested by the health insurance providers.  This year they all requested single digit increases.  Well Governor, a 9% increase last year and a 9% increase this year does not help my business grow or allow me to give my employees a raise.   As a small business it is my employees who are the most important asset that should be rewarded not the health insurers.  I want to hire more individuals, I want to pay each of us more but it is health insurers that are getting more of my revenues. 
Governor, I do not feel my employees are any healthier, I do not see them getting a better service, but I do see that the health insurers are making a profit and paying their executives large salaries.  My small business made a profit by me only drawing a salary that fit what the company could afford. 
So I ask, “When is health care reform going to control health care costs”?    I cut expenses during the recession for my small business to survive.  It is time that health costs are capped.  No more increases period. 
President Obama and Governor I request you create an opportunity for a health premium that is lower than what small businesses pay today.  If you make it affordable for my small business than you have made it affordable for many individuals.   Otherwise I suggest their costs and benefits be the same as the majority.  Yes, elected officials should place their own health care option in the trash since it is not available to most employees. 

pic by boris rasin 

Nonprofits have to look at all views and just may find that it helps them devise their own plan.

The recent compromise of extending all tax breaks to ensure unemployment benefits seemed a little strange.  The math does not work to show me it was an equal return for both.   The amount of money for the rich compared to amount of time limited benefits the unemployed will receive is not even close. 

This approach has only provided the voter with more reason to support the Tea Party candidates because less government means fewer games with policy making. 

The Republicans and Democrats are equally at fault and should take their cue from the nonprofit industry.  A survey by American Express showed that 70% of Americans trust nonprofits more than government or business to deal with the most pressing issues.

If Congress wants to create maximum benefit it should compromise and accept they do not have all of the answers.  Ask the nonprofit sector to submit a plan on how it would balance the budget and pay off the national debt in the shortest amount of time.  Nonprofits represent every sector of the economy, carry with them lots of voter support and have access to capital. 

 pic from Jelene

There was a time where government and nonprofits were joint allies in working to create solutions to a challenge.  As time pass these partnerships became nonprofits 100% reliable on government funding and the partnership ceased.  In reality you have nonprofits functioning as quasi government agencies doing the governments work.  It is privatization of government services.  It is time for the government to reestablish that the solution is not government only. 

There should be no funding of awards to nonprofits or for profits without a required match.  It has been shown that when one is not responsible for a level of the funding that the effective allocation of the dollars is not as efficient.  The federal government has at times required a 10%-50% match when competing for a grant.  However, this needs to be across the board and standard practice at all levels of government.  It must be the goal to maximize the taxpayers’ dollars.  

I would advocate that a minimum requirement of 10% be required for receiving any government funds.  This includes states, city and towns looking to receive government funds from each other.  If a government or nonprofit entity wishes to show an initiative is important, than it needs to put money forward to show its commitment.  This will quickly prioritize the projects that the private sector, nonprofit sector or government sector wishes to support. 

It is alright for government to say I cannot do it alone.  It is alright to say how much money it has, what it wishes to resolve and invite proposals willing to provide a solution.  It will quickly show what the private sector, nonprofit sector and community is able to do with the funds.  Government needs to be more interested in measuring whether it got the result it wanted. 
Those entities willing to put a higher match into an initiative should be given more weight especially if it shows a partnership of multiple entities supporting the effort.

 pic by Sir Realist

Definition of the Middle Class:  1. A class of people intermediate between the classes of higher and lower social rank or standing; the social, the economic,  cultural class, having approximately average status, income, education, tastes, and the like.  2. The class traditionally intermediate between the aristocratic class and the laboring class.  3. An intermediate class.  (Webster’s Encyclopedic Unabridged Dictionary of the English Language)

The Federal Government standard for the percent of health care expenses is 7.5%, if one was to use the 1040 Attachment A Tax Schedule.  The Commonwealth of Massachusetts standard is any individual with an annual income above $21,660 or family with an annual income above $36,624.  The expected percent of income on health care premiums is 2.16% to 8.89%.  The Medicare Tax is required regardless of income. 

The poor are exempted, those age 65 and above have Medicare and those making $250,000 or more can afford to pay for their own health care. 

Health Care is really about one thing:  The need for affordable health insurance.  Unless Congress and the states reform how health care costs are controlled and keep health care premiums affordable there is no incentive to innovate low costs solutions.

It is one means to create innovation of low costs devices and models is by capping the spending in an industries.  Creating a health care cost cap per individual places pressure on the health care industry to evolve to innovative to lower cost solutions.  If you are a nonprofit in health care services and do not change over the next three years I would predict your organization will be struggling to survive or be closed in 2014. 

The Middle Class demands changed to the accessing of health services.  I predict that Community Health Centers and the health clinics in Pharmacies are the growth areas of health care delivery.  Transportation has been one of the largest obstacles for people seeking preventative medicine and managing their health with a primary care giver.   These health service options will expand affordable health care to many local communities.
 

Our nation’s liberty has been its foundation.  Let’s not allow Health Care to be it’s downfall. 

pic by Ddonar 

The political rhetoric about which Party has the right message is meaningless when the result is the same; talk verses results.

Every human being can talk about anything,
Every human being has control over some fraction of capital.
Every human being requires food, clothing and shelter to survive.
But not every human being has the ability to make the same impact with their fraction of capital. 

A simple action that every human being does is to balance spending to their capital.  This action is both on a personally level and in the decisions one makes as an employee, a business owner or public servant.  Ultimately whether as an individual, business or government not controlling ones costs will eventually outpace ones capital. 

The number one uncontrollable expense of an individual, business or government entity is health care costs.  It is not a choice of whether to limit spending in this area.  The spiraling costs are not sustainable.  Each year individuals drop health insurance coverage, each year businesses drop health insurance coverage and the government picks up more of the burden.  However, government is funded by We the People and if we already cannot afford it relabeling does not make it any more affordable. 

The solution for sustainability is to limit health care insurance to a percent of a person’s income either paid by the individual or their employer.  Let’s have the discussion be about what that percent should be and pass a law to that effect. 
But it does mean that we all have to admit the following:
1. Does everyone get sick during their life time? YES
2. Is health care free? No   (Health care just does not come out of the air)
3. Do laws require you to be treated in an emergency if you cannot pay?  Yes
4. Does the USA have the highest health care costs in the world? Yes
5. Does the USA have better health care outcomes than other industrialize countries?  No
Let’s be real in our discussion to recognize that legal expectations created by Congress over centuries and supported by We the People have now created a health care system that should be recognized as a utility.  It’s required to be made available for all regardless of the ability to pay.  Therefore, everyone needs to be required to pay for their future health care needs of the basic services.   

I wish to remind everyone that most employees pay a Medicare tax to cover health care services for those age of 65 plus. I have not heard any objections to this mandated health care insurance coverage. 

If this change occurred, we as individuals, business owners, executives could make plans to use our capital in ways that promote our growth based on our missions; not on uncontrollable health care costs. 

The alternative is a bankrupted economy.

 Pic by Robin Hutton

There have been two areas of the economy where costs have outpaced the cost of living index: health care and education.  For the purpose of this post I am concentrating on the public education system. 

It is funny how failure in education is viewed by government as a reason to give an education system more money.  When one researches successful schools districts or individual schools it is not the money that has created the positive educational outcomes but the staff and curriculum.  Do not get me wrong about money not being needed to improve education but government needs to stop rewarding failure. 

In business if you sell a lousy service or product the consumer goes elsewhere.  Therefore, reward good schools and have them take over the failing schools.  Let them replicate their model. 
The truth of the matter is to quickly increase positive outcomes for failing students and those dropping out.  Due to the diversity of student needs and interests this would promote and facilitate more innovation.  

The Charter School movement as part of the public education system is a laboratory to show that for a set price students can be educated.  It shows parents, federal and state officials how educational dollars can be better allocated with the right staff and curriculum to create great results. 

I would promote that any student attending what it’s state educational authority consider a failing school  should be allowed to attend any District School, Charter  School or Private School for the set Charter School Tuition set by the authorizing government entity.  District schools should no longer be given the latitude of years to make changes when each year thousands of students are failing to be educated.  Any limit on the number of students given this opportunity is a discriminating practice and should be legally challenged if it continues. 

Any educational system that is based on the luck of a lottery for which school one is placed including a failing school should be considered criminal.  A failing school should not be allowed in a lottery based system unless the student is allowed to take their tuition elsewhere.

A District school must be made accountable for their failure to educate students and when said failure reaches a percent of the school that students can transfer to any other school that will accept their tuition. 

Many of these charter schools show a public school model that competitively beats many District School models and private school models on price and outcomes.    If anything, charter schools are a threat to the private school model.  The charter school offers parents and students many of those services they selected private schools for. 

Today, charter schools promotion of a free public school education is bringing more students back into the public school system from the private sector.  

It just might be the way to bring the price of private schools down or increase the amount these schools give in scholarships. 

 pic by www.thomastoons.com

According to the US census bureau, 45% of all households in the US earn about $50,000 dollars for the year. The president of the United States makes $400,000 dollars a year. If a company were to say that their CEO will only make a salary equal to $400,000, the chances are that the candidate pool will expand substantially. Rather than hiring someone who may be the best qualified person for the job, but also demands a salary triple the size of $400,000.

For a non-profit organization to be willing to pay someone anymore than $400,000 dollars is simply ruining their chances of accomplishing their goals. For one, you hired someone who clearly isn’t as interested as the rest of the employees in accomplishing your organizations goals as opposed to raking in as much cash as possible. Too much money for one person means less income to achieve your organization’s mission.

It’s clear that the president of the United States has the hardest, most time consuming job in America. He is on call twenty four hours a day for four years until election time comes around where he’ll work even harder to get the same position for another four years. If he can live with a $400,000 dollar salary, any candidate for a president position either for non profits or for profits should be quite comfortable with such a lucrative salary.

Clearly many if not all of the fortune 500 companies did not get the memo about how reasonable a $400,000 dollar salary for their CEO’s is. According to the associated press, Goldman Sachs Group Inc.’s CEO, Lloyd Blankfein earned $42.9 million. Consider that only 2% of the households in the US earned $250,000 dollars or more in 2007. Is it really necessary for anybody in any kind of position to ask for more than $400,000 dollars a year for putting in hardly the same amount of work and strain the President puts on himself? I think not.

Boards of Nonprofit’s practicing the approval of these unreasonable salaries need to stop fooling their donors and focus on their mission and stop paying large salaries.   Any organization that wants to pay these high unreasonable salaries should become a for profit company.

Another alternative is the Board votes to lay off the high price individual and keep the workers actually delivering the mission of the organization. 

The best resources for a donor to utilize to help make the donating experience enjoyable, focused and take up the least amount of time are Guidestar and the National Center for Charitable Statistics.  The higher the dollar value of the donation, the more variables the donor may wish to utilize under Guidestar.  The higher subscription fee is worth it.  

In my recent analysis of Massachusetts human services nonprofits I found that capping the administrative costs of an organization resulted in savings of a minimum of eighteen million for nonprofits under two and half million dollars and one hundred and forty-three million for nonprofits over two and half million dollars in revenue.  If funding a nonprofit is going to be decided based on administrative costs, then restrict your donation to not be used for administrative costs or to a specific amount. 

Rather than lower its spending in the weak economy, government has leveled off the amount of money allocated for nonprofits.  Because of this level funding combined with an ever-increasing population, government has been forced to favor the more established institutional organization structures.