Craig Bruya, former CFO of Microsoft Business Solutions and audit manager with Arthur Andersen & Co, and now a professional philanthropist, has been actively involved with Room to Read since 2002 and joined the Board of Directors in 2008. From the perspective of both an investor and a board member, Craig shares his thoughts as to why numbers matter, how Room to Read is getting it right -- and how the world seems to be finding out about it.
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In 2002, when I was first approached by John Wood, a former colleague at Microsoft, to get involved with helping to develop a financial model for Room to Read, I did what every self-professed number-cruncher does: I reviewed their financial statements, budgets and five-year plan. Eight years later, I find myself happily ensconced on the board of an organization that has grown exponentially, both in revenue and results.
As the head of the Audit Committee, I work closely with Room to Read CFO, Joanne Chou, and her skilled staff of finance and accounting experts, and with pencils sharpened, we continue to refine and improve procedures to keep our efficiency level extremely high. Apparently it’s working, and word is getting out.
Last week, Barron’s, a publication targeted for a financially-sophisticated audience, included Room to Read in their second annual “25 Top Givers” list. This list calls out individuals and organizations that get big results from their donation dollars and this year, includes the standard heavy hitters of philanthropy with Bill Gates, Jr. at #1, Bill Clinton at #8 and Oprah Winfrey at #21. And, I am proud that among that list is John Wood/Room to Read at #9, up two positions from last year -- and one of the only on the list that didn’t start out as a billionaire or celebrity-led endeavor.
We also learned last week that we had qualified for membership in a very elite group in having been awarded Charity Navigator’s four-star (the highest) rating for sound fiscal management for a fifth consecutive year. Only 6% of their rated charities can claim this five-year streak. Charity Navigator is the recognized report card for U.S. charities, and each year, 5,500 nonprofits are evaluated on various criteria, including levels of overhead, direct program spending and program results.
So what exactly do these honors mean? Simply put, they mean that Room to Read has developed a formula for growth and efficiency that is rarely seen in the nonprofit (or even for-profit) world. That formula, which includes innovative thinking, transparency, diversified funding and planned growth, attracts investments from business giants such as Credit Suisse and Barclays Capital and Goldman Sachs, as well as individuals looking for a philanthropic partner who can take their dollars and turn them into a tool to change the lives of children. Investors know they can trust Room to Read -– which is why, in an economy that is challenging at best, Room to Read managed to grow its revenue by over 20% last year and is on target to do the same in 2010! As an accountant, I love to see great revenue growth, but as an investor I take greater comfort knowing that we are helping many more children gain the lifelong gift of literacy.
What’s Room to Read’s secret? That’s just it –- we don’t have secrets. One of our core beliefs is transparency, which means that all the books are on the table –- data about donation totals, project expenses and program results are updated regularly and made available to all of our key stake holders, including staff, board, volunteers, donors and potential donors.
Of course, it helps when you have good data to report, which, in general, we do. Thanks to our “cheap and cheerful” mantra, more than 80 cents of every dollar is funneled directly into our program work. That being said, we don’t believe in being penny-wise but pound-foolish. Room to Read invests in the necessary infrastructure that allows our worldwide team to excel at their work. It costs money to build accounting systems and donor management systems and to monitor and evaluate our programs to make sure that they are cost effective and getting the desired results. We work hard to strike a careful balance between donation efficiency and infrastructure investment.
I recently had the opportunity to travel to Bangladesh, India, Zambia and South Africa to see our programs at work. It is one thing to be impressed with our numbers and to be happy that we are a well-managed organization, but it is a very different thing to see donor dollars in action. The children are thrilled to be learning -- and they are sharing their new-found knowledge with their families. The experience was life-changing, and my commitment to the organization has never been greater. I know of no investment with greater return than that of educating a child.
Read more about Room to Read's recent honors on our website. And, consider giving a unique gift this season through our Room to Read’s Holiday Gift Catalog where your gift can help share education with children in Asia and Africa. Plus, through the end of December, all online donations will be matched 100% up to $500,000.