New NIGP 990 Return Review: Optics Versus Profitability – Which Is More Important? by Jon Hansen

Posted on May 15, 2015


“The consumer survey found that 74% of respondents would be unlikely to buy products or services from a company involved in controversial supplier practices. It also points out a number of other key findings – all in all companies who are not actively monitoring the business practices of their suppliers, or who are engaged in questionable supplier practices themselves, are placing their reputations and their balance sheets in harm’s way.” – Proxima/Kelton Global Study

Within minutes of my receiving the above referenced study, an associate sent me an e-mail asking how the findings might have an impact on how people will view the #CodeGate scandal.

It was a great question, and one that I had immediately considered as I read the study’s highlights.

“Yet, when these scandals arise, consumers are not drawing a distinction between company and supplier and are placing as much blame, if not more, squarely at the feet of the company.” 

From the standpoint of this story, there are two distinct yet related trains of thought through which you can view the findings. One that is internal to the procurement world itself, and one that is external.

From an internal standpoint, if you equate the consumer with the membership of the NIGP, then it would be reasonable to draw a parallel in terms of how people will react to the association’s conduct.  This includes the decision to enter into what is now clearly a questionable relationship with Persicope regarding the stewardship of the NIGP Code.

From the standpoint of someone outside of the profession, they might view the #CodeGate scandal with a disdained indifference. Or as one reader so aptly put it, what else would you expect . . . it’s the government. The sad irony of course is that the NIGP is not actually a government entity, but a nonprofit enterprise that serves the public sector.

In this regard, the public is not drawing a distinction between company and supplier. Or to put it another way, the failings of the NIGP are for the most part being viewed as the failings of the government or public sector as a whole.

All this being said, you can’t ignore the fact that according to the NIGP’s just released 990 Return, the association posted a profit for the 4th year in a row – $322,610.

While Grimm’s salary, which increased to $262,191, will likely continue to be fodder for further discussion, under his leadership the NIGP has accomplished something that the majority of industry associations have failed to do – remain profitable. By the way, you can access the just released 990 Report through the following link:

Silhouette of businessman in lotus position surrounded by work, love and finance worries

“An organisation’s values define everything from investment decisions to personal development plans, so why do so few develop a moral framework alongside their business model?” – the guardian, October 2014

This raises the question, is profitability at the expense of optics acceptable?

For example, does the NIGP’s profitability justify maintaining the status quo in terms of the stewardship of the Code, and the potential for another Missouri in the future?

It should be an interesting conference in Kansas City.

NIGP 2105 Forum

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