“Believe it or not, accountants don’t necessarily like to dwell on the details.”
-Thomas A. McLaughlin, Streetsmart Financial Basics for Nonprofit Managers
“Prescriptive rhetoric (aka, matters of grammatical correctness) is one smoke screen the, perhaps sincere, albeit obtuse, dissenter will use to derail the larger conversation.”
And sometimes the right questions are the ones that move the conversation forward the most.
Now, I’m not as interested in finances as I am in conversation, but Thomas McLaughlin, in talking about finances, inadvertently gave me a tool to help my conversations. I’m relating this, here, now, because it seems to me that nonprofits, a little unlike other sorts of organizations, have to devote time in more equal measure to finances and conversations due to a heightened awareness of discussions concerning Mission and Means and the relationships that inform them.
In chapter 3 of his book, McLaughlin talks about the Materiality Principle, which involves understanding the threshold at which a financial transaction for an organization actually begins to exert influence on the overall financial picture for the organization, and thus “matters.”
Needless to say, there are many transactions that fall below an established threshold (a threshold which can be different based on an auditor’s perspective and specific job description) and thus are immaterial (or do not really “matter”) to the job an accountant/auditor is trying to do.
I think the Materiality Principle could also help with interpersonal discussions, especially those which often arise within a nonprofit. Establishing a threshold of what points of contention matter most in an argument, what questions are more right and which are more wrong, should quickly eliminate time-consuming, lassitude-inducing smoke screens like disagreements over grammar, etc. thus improving the overall effectiveness of the conversation.
Now, this threshold the Materiality Principle suggests certainly does not seem easy to establish. I mean, it’s one thing to define a threshold in the important financial transactions of a nonprofit, which are quantifiable as assets, liabilities, etc. and a completely different thing to establish this principle in a sphere of shifting and intangible priorities, the connotations and denotations of interpersonal language, the evolving Universe of Nonprofit-dom.
But, it strikes me that if we all could find ways to apply something like the Materiality Principle to our nonprofits (and our day to day lives), we could establish a new level of personal efficiency in finances as well as in ongoing conversations of how to meet our goals.