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Blog

New Tax on Excess Nonprofit Executive Compensation

The Tax Cuts and Jobs Act introduces a new excise tax on excessive compensation at applicable tax-exempt organizations. Learn which employees could be impacted and the actions nonprofit Boards should take now to identify potential tax liabilities.  READ MORE +

Make telecommuting work for your nonprofit

Telecommuting is one employee benefit not-for-profits can consider to enhance recruiting efforts, reduce expenses and promote greater productivity. Careful consideration of key issues such as policy, communication and fairness are essential to making these flexible arrangements work for both your employees and your organization.  READ MORE +

How to Attract and Retain Top Talent in the Nonprofit Sector

When a nonprofit board starts the search process for top talent, particularly at the executive director/CEO-level, it helps to start with a consideration of what compensation options are available to attract the best candidates.  READ MORE +

Is your nonprofit’s board providing adequate fiscal oversight?

Donors, watchdog groups and the media all pay close attention to a not-for-profit’s Form 990, so your board must prioritize financial governance. Finance and audit committees should focus on activities over which they have the most direct influence. For example, does your nonprofit have an operating reserves policy and are your reserves adequate? If you’re having trouble recruiting qualified board members to sit on financial committees, look for professionals such as bankers and CFOs. Or contact us to help you find board members or serve as an independent advisor.  READ MORE +

Spring cleaning: Review your nonprofit’s programs — and possibly replace some

If your not-for-profit’s program lineup has remained unchanged for years, consider using the tradition of spring cleaning to review your offerings. Some might be due for replacement. Start by surveying stakeholders about which of your nonprofit’s programs are the most and least effective. If you don’t already have goals, as well as strategic, realistic and timely metrics, for your programs, set them now. As you replace programs, keep in mind that new ones can be variations of old ones. But no program that overspends can be successful.  READ MORE +

Compensation Considerations for Senior Not-for-Profit Executives

In a near record-low unemployment economy, with professional opportunities abounding for competent business executives, recruitment efforts by organizations in the not-for-profit sector can be challenging to say the least. Not-for-profit organizations operating with limited budgets and resources can find it challenging to develop compensation programs as attractive as their for-profit counterparts. The good news is that there are non-financial compensation alternatives available as well.  READ MORE +

It’s time for nonprofits to embrace the cloud

Cloud computing uses a network of remote third-party servers made available online. Rather than relying on your not-for-profit’s own computers or server, you remotely share software and storage to process, manage and share information. There are several advantages to using the cloud: lower costs, scalability and easy offsite access. And most reputable services boast stronger security, including firewalls, encryption and authorization restrictions, than your own nonprofit could afford to put in place on its own.  READ MORE +

Boosting the matching gifts your nonprofit receives

Corporate matching can double the value of donors’ gifts, a bonus no not-for-profit organization can afford to pass up. To encourage financial supporters and their employers to participate in such programs, draw up a list of companies in your area that offer matching and post it on your website’s donation page. Also use the list to reach out to existing donors you know work for those companies. Another option is to set up your own matching program by securing pledges from board members and major supporters to match gifts.  READ MORE +

Making the most of your nonprofit’s internal audit function

Your not-for-profit’s internal audit function provides independent assurance of compliance with internal controls as well as laws, regulations and contracts. Auditors are capable of uncovering potential risks such as fraud, insufficient funds and reputational damage. But internal auditors can offer your organization more than risk assessments and audit plans. They may serve as internal consultants, providing insights gathered on issues such as operational efficiencies. Or they may help evaluate strategic opportunities.  READ MORE +

Is your nonprofit ready to hire new staffers?

Three questions can help you decide whether your not-for-profit is ready to hire new staffers. First, do you need employees? This may seem obvious, but it’s possible that volunteers can help pick up the slack or that current staffers are underused. Second, do you have the money? Even if financial support is increasing, you need to make the most of any new staffing budget. Finally, is outsourcing an option? It may be cheaper to outsource such functions as accounting, IT and HR work.  READ MORE +

How nonprofits can regain their tax-exempt status

Thousands of not-for-profits lose their tax-exempt status every year because they’ve neglected to file required annual forms with the IRS for three consecutive years. If your organization is on the revocation list and seeks to re-attain its exempt status, file Form 1023 or Form 1024 with supporting documentation. This includes statements that explain your failure to file and steps you’re taking to prevent future failures; returns for all taxable years during and after the nonfiling period; and a declaration signed by an officer or director.  READ MORE +

2017 Nonprofit Industry Update Seminar Recap Part 3 of 3: Form 990: Understanding and Avoiding IRS Examination Triggers

When it comes to a nonprofit organization getting in potential audit trouble with the IRS, it will most likely start with IRS Form 990. Officially known as the “Return of Organization Exempt from Income Tax”, this form provides the public (and the IRS) with a nonprofit organization’s financial information.  READ MORE +

Collaborating for a cause: Nonprofit alliances

“Strategic alliance” is a blanket term typically used to represent a wide range of not-for-profit affiliations (including joint ventures, which involve a more formal, contractual relationship). They can have important benefits for all parties, but the success of these alliances depends on careful planning and oversight. Before finalizing an arrangement, your nonprofit should ensure that the other party shares your values and is able to live up to its financial commitments. Also consider how your donors will feel about the alliance.  READ MORE +

What nonprofits need to know about the new tax law

The Tax Cuts and Jobs Act (TCJA) contains some provisions affecting not-for-profits. Perhaps most concerning is the nearly doubled standard deduction, which is likely to discourage some taxpayers from making charitable contributions. In addition, the higher estate tax exemption may reduce the number and size of major gifts made by wealthy donors. The TCJA further mandates that nonprofits calculate unrelated business taxable income separately for each unrelated business and imposes a 21% excise tax on certain highly compensated executives.  READ MORE +

2017 Nonprofit Industry Update Seminar Recap Part 2 of 3: Nonprofit Accounting Standards Update

John D'Amico, Director in our Professional Standards Group, presented accounting standard updates issued by the Financial Accounting Standards Board (FASB) that impact nonprofit entities at our 2017 Nonprofit Industry Update Seminar in New York City.  READ MORE +

Conflict-of-interest checklist for nonprofits

It’s the duty of all not-for-profit board officers, directors, trustees and key employees to avoid conflicts of interest. Any direct or indirect financial interest in a transaction or arrangement that might benefit one of these individuals personally could result in the loss of your organization’s tax-exempt status. Contact us for help if you don’t have in place a conflict-of-interest policy and other safeguards, such as requiring leaders to annually pledge to disclose interests, relationships and financial holdings that could result in a conflict of interest.  READ MORE +

2017 Nonprofit Industry Update Seminar Recap Part 1 of 3: Preventing, Detecting and Remediating Nonprofit Financial Fraud

Michael McNee, Co-Partner-in-Charge of our Nonprofit, Government & Healthcare Group drew attention to this near-legendary tale of nonprofit fraud during his presentation on combating nonprofit fraud at our 2017 Nonprofit Industry Update Seminar in New York City.  READ MORE +

Don’t let donor fatigue erode support for your nonprofit

At some point, even the most philanthropic individuals experience donor fatigue and start saying “no.” How can you remain engaged with donors and yet keep your fundraising efforts from eroding relationships? Try staggering your attention, contacting important donors in person and the next tier with personal letters and follow-up phone calls. Or limit the number of appeals you make to one or two a year. And, occasionally ask regular donors for nonmonetary support, such as chairing a committee or hosting an event. For more on nurturing your donor base, contact us.  READ MORE +

Which board structure is right for your nonprofit?

Not-for-profit boards can vary widely, with different duties and expectations for their members. The structure can be anything from a less-involved group that takes its direction from the organization’s leader, to a fully functioning, hands-on board that essentially runs the nonprofit, to boards that fit somewhere in between. “Policy” boards usually make sense for established nonprofits with full staff and volunteer resources, while “working” boards are most common among early-stage organizations.  READ MORE +

Budget Basics for Nonprofit Board Members

As we wrap up the fourth quarter, many nonprofit organizations are reviewing are reviewing and approving 2018 budgets. Let’s take a look at some financial basics for nonprofit board members pertaining to the creation and approval of an annual budget.  READ MORE +

Finding and keeping event sponsors

To line up businesses and individuals to sponsor your not-for-profit’s special events, and retain them over the long term, be sure to target the right prospects. Refer to your mission statement and focus your efforts on sponsors with similar values and objectives. For example, a literacy charity might ask an educational book publisher to sponsor its annual gala. To convince potential sponsors that your event’s audience is the same demographic they want to reach, use factual historical data and never exaggerate.  READ MORE +

How nonprofits can maximize donors’ generosity around the holidays

People are naturally inclined to make charitable gifts around the holidays. With the end of the year fast approaching, your not-for-profit should think about how to make the most of the season. One way is to strike early. Plan events or solicitations for early December or sooner, before donor fatigue sets in. And rather than blitz every prospect in your database, identify the best prospects. Past donors are more likely to give again and in larger amounts. Personal appeals can encourage a greater commitment from them.  READ MORE +

Boardroom and management diversity adds value

Boardroom and management team diversity can enhance corporate value. Academic research has found that diverse boards lead to better financial reporting quality and greater management accountability after poor financial performance. The Securities and Exchange Commission already requires limited disclosures on boardroom diversity and has plans to expand them. Private companies can benefit from more diverse insights, too. We can help assess your level of diversity and provide voluntary disclosures that showcase your commitment to race, gender and ethnic diversity.  READ MORE +

Dashboards can help nonprofit boards focus on critical goals

Not-for-profit board members need to keep an eye on how well their organizations are meeting key goals and furthering their missions. One of the easiest ways for boards to do this is with a “dashboard” of key performance indicators. Just as an automobile dashboard gives drivers a quick glimpse of their car’s status, a performance dashboard provides an at-a-glance look at an organization’s financial health.  READ MORE +

A Charitable Remainder Trust Can Provide a Multitude of Benefits

If you’re charitably inclined but concerned about having sufficient income to meet your needs, a charitable remainder trust (CRT) may be the answer. In a nutshell, you contribute stock or other assets to an irrevocable trust that provides you with an income stream for life or for a set term. At the term’s end, the remaining trust assets are distributed to one or more charities you’ve selected. When you fund the trust, you generally can claim a charitable income tax deduction equal to the present value of the remainder interest.  READ MORE +

5 simple steps to a better nonprofit budget

Preparing your not-for-profit’s annual budget can be a painful process, but several steps can help make the process easier. For example, before you start allocating resources, figure out what they are. This includes not only the amount of your income, but its nature. After all, restricted or planned gifts aren’t necessarily available for spending. Also be careful not to underestimate needs when determining the costs of current and future programs. And account for both direct and indirect expenses. (The latter benefit multiple programs.)  READ MORE +

Grants can help firm up your nonprofit's financial foundation

There are more than 87,000 foundations in the United States. If your not-for-profit isn’t actively seeking grants from these groups, you’re neglecting a potentially significant income source. Get started by visiting the Foundation Center’s online directory at foundationcenter.org. Then talk to staff members at your target foundations about the kind of information they need. Foundations generally like projects that are well defined and data driven with specific goals.  READ MORE +

Valuing and reporting gifts in kind and donated services

Not-for-profit supporters often donate gifts in kind and services. But properly reporting and assigning value to such donations can be challenging. With gifts in kind, decide whether the item can be used to carry out your mission or sold to fund operations. If so, record its fair market value as a donation and a related receivable (once it’s unconditionally pledged). The value of a donated service should be recognized if it creates or enhances a nonfinancial asset or it requires specialized skills and is provided by a specialist.  READ MORE +

A Crummey trust can preserve the annual gift tax exclusion

The $14,000 annual exclusion is limited to gifts of a “present interest,” defined by IRS regulations as “an unrestricted right to the immediate use, possession, or enjoyment of property or the income from property.” Generally, gifts to a trust designed to distribute assets to beneficiaries at a future date won’t qualify. But a Crummey trust satisfies the present interest requirement by giving beneficiaries the right to withdraw trust contributions for a limited period of time. There are additional rules and tax consequences to consider, so contact us for details.  READ MORE +

Are term limits right for your nonprofit’s board members?

Term limits for not-for-profit board members can be a double-edged sword. They may allow you to easily let go of unsuccessful members without hurting their feelings and create an opportunity for new members with fresh ideas and perspectives to come on board. On the other hand, they may cause you to lose your most dedicated and active members. Also, term limits force your organization to look for qualified replacements and train them more often than you’d probably like. Carefully consider the pros and cons before choosing term limits. Contact us for help.  READ MORE +

New Financial Reporting Standards for Nonprofits

Late last summer, the Financial Accounting Standards Board (FASB) issued an Accounting Standards Update (ASU) that simplified and improved how nonprofit organizations tell their stories through their financial statements. This has been achieved by redefining classifications and how organizations report net assets, as well as other financial information. These new standards are designed to help nonprofits provide more relevant and useful information about their resources to key stakeholders – including donors, board members, grantors, creditors and tax authorities.  READ MORE +

Don’t let a crisis KO your nonprofit’s special event — plan ahead

Most not-for-profits depend on a big annual event to raise significant funds or attract new members. But as any experienced event planner can tell you, almost no benefit, gala or conference goes off without at least a small hitch. To head off the big hitches, create a crisis management plan that addresses key risks such as severe weather, travel restrictions and natural disasters and lists emergency contact numbers for staffers and vendors. Also ensure that your insurance policy provides adequate coverage. Contact us for help addressing special event risks.  READ MORE +

Make endowment funding your nonprofit’s ally

Income from endowment funds may be able to help your nonprofit meet operating expenses, ease cash-flow problems and supplement your annual budget. But you need to control your spending policy. Assuming funds aren’t restricted, nonprofits in most states must conform to provisions of the Uniform Prudent Management of Institutional Funds Act. Within those constraints, define how much of your fund’s income can be spent on operations each year. Generally, this percentage is between 4% and 7% of your average investments. Contact us for additional help.  READ MORE +

Charitable giving pièce de résistance: Artwork donations

Charitable giving is a key part of estate planning for many people. If you’re making gifts during life, generally, it’s advantageous to donate appreciated property to avoid capital gains tax. Because the top capital gains rate for art is 28%, donating art can be particularly effective. Be sure to have art appraised by a “qualified” appraiser. IRS rules detail requirements for appraiser qualifications and appraisal contents. Plus, IRS auditors are required to refer all gifts of art valued at $20,000 or more to the IRS Art Advisory Panel. Contact us to learn more.  READ MORE +

Use a giving day to raise money — and awareness — for your nonprofit

Giving Tuesday was created to encourage Americans to contribute to charity during the holiday season. On the first Tuesday after Thanksgiving (Nov. 28 in 2017), not-for-profit participants use social media to raise money, educate the public about issues and encourage people to volunteer in their communities. If your nonprofit hasn’t made plans to participate, it’s not too late. Try a simple, focused goal your first year. For example, use Giving Day to remind supporters to make their tax deductible gifts by year end. Contact us for more fundraising ideas.  READ MORE +

Prepare financial statements that will impress your nonprofit’s stakeholders

Audited financial statements can help assure funders and lenders that your not-for-profit is financially sound. But there are three critical audit issues to understand when preparing statements: 1) Your auditor’s role is to provide an opinion on whether statements are free of material misstatements, 2) your board should play a strategic, oversight role in the process, and 3) statements should be analyzed to help you manage your organization. Contact us for help preparing audited financial statements.  READ MORE +

How your nonprofit can avoid investment fraud

Investment fraud can cause significant financial losses for not-for-profits. But the harm it could cause your reputation with donors and the public may be even worse. To avoid hiring a crooked investment advisor, beware of unrealistic promises, such as annual returns of 20%. Also be wary of fund managers who don’t submit to outside audits or report their results publicly. Instead, look for an advisor who encourages you to discuss goals and risk concerns, and who understands your investment philosophy. Contact us for help finding a trustworthy advisor.  READ MORE +

Create a nonprofit executive search plan — before it becomes necessary

Even if there’s no immediate need for your not-for-profit to hire an executive, it’s smart to prepare for the process. That way, you’ll be ready to execute a search when the time arrives. Start by forming a search team made up of board members. This team should draft executive job descriptions that detail the knowledge, skills and attitudes required for positions and discuss compensation philosophy. For example, will your nonprofit compensate in line with similar nonprofits or with similar for-profit positions? Contact us for more compensation information.  READ MORE +

FASB Proposes Improvements to Nonprofit Grant and Contribution Accounting

The Financial Accounting Standards Board (FASB) has issued a proposed Accounting Standards Update (ASU) intended to clarify and improve the accounting guidance for contributions and grants. There has always been some “gray area” in determining whether a grant is an exchange transaction or a contribution – depending on whether the contributor/grantor (the resource provider) received something of approximate equal value in exchange for the resources transferred. Distinguishing between contributions and exchange transactions determines which accounting guidance to follow.  READ MORE +

Is one of your nonprofit’s board members behaving badly?

Your not-for-profit has probably spent a lot of time and effort finding knowledgeable, enthusiastic and committed board members. Unfortunately, what begins as a good relationship can sour over time. If a member consistently monopolizes discussions, treats peers disrespectfully, seems motivated by personal agendas or violates your nonprofit’s policies (for example, on conflicts of interest), you may need to “fire” him or her. Frequently missing meetings or being unwilling to accept or complete tasks also may warrant removal from the board.  READ MORE +

Use a noncharitable purpose trust to achieve a variety of goals

Generally, trusts must have one or more human beneficiaries, but there’s an exception for certain “purpose” trusts, such as a noncharitable purpose (NCP) trust. To be valid, an NCP must meet three requirements: 1) Have a purpose that’s certain, reasonable and attainable, 2) not violate public policy, and 3) be capable of enforcement. Typically, an NCP trust is enforced by an “enforcer,” who ensures that the trust’s purpose is fulfilled, and/or a “trust protector,” who’s empowered to modify the trust when its purpose has been achieved or is no longer relevant.  READ MORE +

Reporting collaborative activities: A complex issue for nonprofits

Many not-for-profits join forces to better serve their clients and cut costs. But even a simple collaborative arrangement can involve complex financial reporting obligations. Costs incurred and revenues generated from transactions with third parties should be reported, on a gross basis on the statement of activities, by the nonprofit that’s considered the “principal” for that arrangement. Payments should be presented according to their nature and certain disclosures should be made by participants. Contact us for more information about reporting joint activities.  READ MORE +

Should your nonprofit accept digital currency donations?

Despite the fact that United Way now accepts Bitcoin donations, many not-for-profits remain wary of money that’s neither printed nor backed by a central bank. But there are potential advantages to accepting Bitcoins and other digital currencies. For example, you may be able to accept donations from people worldwide who don’t have easy access to global financial systems. Also, these transactions tend to be low- or no-cost, and there may be tax benefits for donors. But accepting digital currencies also involves significant risk. Contact us for more information.  READ MORE +

Nonprofits: Harness the power of the personal appeal

People don’t give to causes. They give to those asking on behalf of a cause. That’s why a personal appeal to family and friends continues to be such a powerful not-for-profit fundraising tool, particularly for board members with extensive address books. When approaching potential donors, board members should humanize their appeal, relating how their own experiences have drawn them to the cause. They also should emphasize benefits such as public recognition and networking opportunities. Contact us for more ideas on using personal appeals to raise funds.  READ MORE +

When does your nonprofit owe UBIT on investment income?

Although dividends, interest, rents, annuities and other investment income generally are excluded when calculating a not-for-profit’s unrelated business income tax (UBIT), there are two exceptions. The first is when your nonprofit incurs debt to acquire an income-producing asset. The portion of the income or gain that’s debt-financed is generally subject to UBIT. The second is when income is received from a for-profit subsidiary or controlled nonprofit. To learn the details and ensure your nonprofit is complying with the IRS’s UBIT rules, contact us.  READ MORE +

Why your nonprofit must avoid excess benefit transactions

Not-for-profits ignore the IRS’s private benefit and private inurement provisions at their own peril. The rules prohibit individuals inside or outside a nonprofit from reaping an excess benefit from its transactions. Violations can have devastating consequences, including loss of exempt status. And individuals involved may be subject to significant excise tax penalties. To protect your organization, document all transactions to insiders so you can later prove they were reasonable and made for an exempt purpose. Questions? Contact us.  READ MORE +

Managing the risks of your nonprofit’s special events with insurance

Risks associated with not-for-profit special events run the gamut from accidents and personal injury, to fraud and theft, to cancellation due to inclement weather or nonappearance by a featured performer. It’s possible to buy designated “special events insurance,” but such policies can be expensive. Instead, you may want to find out whether you can extend (for a one-time additional premium) a current insurance policy, such as general liability, D&O or fidelity, to cover your event. Contact us for more information on managing risk.  READ MORE +

3 breaks for business charitable donations you may not know about

Here are three lesser-known income tax breaks for charitable donations by businesses: 1) deduction for donated food that equals the lesser of the food’s basis plus one-half the fair market value in excess of basis or two times the basis, 2) deduction for qualified conservation contributions by qualified C corporation farming and ranching operations of up to 100% of adjusted taxable income, and 3) favorable tax basis rule for shareholders of S corporations that make donations of appreciated property. Think you may be eligible? Contact us to learn more.  READ MORE +

3 types of information your nonprofit’s board needs

Regularly supplying the right kind of information to your not-for-profit’s board of directors is the key to the board properly fulfilling its duties. You don’t want to deluge them with so much that they can’t keep up, but three types of information are important to share: 1) Financial, including your Form 990, audit results, and monthly and quarterly financial reports; 2) Strategic, such as program usage and membership statistics; and 3) Board member, including member bios and thank-yous for special efforts. Contact us to learn more about nonprofit governance.  READ MORE +

Is now the time for a charitable lead trust?

A charitable lead trust (CLT) is most effective in a low-interest-rate environment, so conditions for taking advantage of a CLT now are favorable. A CLT provides a regular income stream to charities during the trust term, after which the remaining assets pass to noncharitable beneficiaries. A charitable lead annuity trust (CLAT) makes annual payments to charity equal to a fixed dollar amount or a fixed percentage of the trust assets’ initial value. Typically, people establish CLATs during their lives because it allows them to lock in a favorable interest rate.  READ MORE +

Social impact bonds can fund nonprofit social services and offer other benefits

Traditionally, government agencies pay not-for-profit social service providers for specific activities or delivery models. But what if your nonprofit lacks the upfront money to pursue required outcomes? That’s where outside investors may come in. They supply capital and operating funds by investing in social impact bonds issued by your nonprofit or an intermediary. In exchange, they receive a share of government payments made for successful outcomes. Your nonprofit might benefit if it has measurable outcomes highly correlated with social net benefits.  READ MORE +

Should your nonprofit take out a loan?

Debt is an integral part of many for-profit companies’ strategic plans, yet it has traditionally carried a stigma in the not-for-profit world. That view is changing, as more organizations borrow money for major capital purchases, new program funding and other reasons. But before your nonprofit borrows, know that it takes prudent financial management and reliable donor support to pay back a loan. You also need to make the case to a lender that you have a compelling reason to borrow and a realistic repayment plan. Contact us for more information.  READ MORE +

5 tips for successful nonprofit succession

Every not-for-profit organization needs a comprehensive succession plan to ensure smooth leadership transitions. The plan should be in writing and cover such issues as developing employees to move up the ladder and eventually assume leadership positions. It’s also important to describe how you’ll leverage organizational knowledge and keep your nonprofit running smoothly during transition periods. Further, detail how your board can conduct or assist in the executive search process and support a new hire. Contact us for more information and help creating a plan.  READ MORE +

How nonprofit youth sports leagues can prevent fraud

Many not-for-profit youth sports leagues are at risk for fraud and don’t even know it. But you can protect your league by taking a few simple steps. The most important is to segregate duties. This means that no single individual receives, records and deposits funds coming in, pays bills and reconciles bank statements. Every payment (or at least those over a certain threshold) should require two signatures. And if your league has credit or debit cards, ask someone who isn’t an authorized user to review the statements. Contact us for more fraud prevention tips.  READ MORE +

Best Practices for Managing Nonprofit Finances

Cooper Union is a NYC-based private college that was founded in 1859 with a mission to be “open and free to all.” For over 150 years the school relied on its significant endowment to provide a tuition-free education to its students.  READ MORE +

Does your nonprofit’s board understand its fiduciary duties?

Lawmakers’ and public interest in not-for-profits’ governance has grown in recent years. If your board hasn’t reviewed its fiduciary duties recently, it should do so. In general, a fiduciary has three primary duties: 1) care (to oversee financial and operational activities with care), 2) loyalty (to act in the nonprofit’s best interests) and 3) obedience (to adhere to the nonprofit’s bylaws and rules and all applicable laws). Board members who violate these duties may be held personally liable for financial harm suffered by your nonprofit. Contact us for details.  READ MORE +

5 accounting mistakes your nonprofit should avoid

To err is human, but your not-for-profit’s supporters, not to mention the IRS, may be less than forgiving about financial and bookkeeping mistakes. So attend to accounting details to avoid pitfalls. For example, don’t operate without proper accounting procedures that cover all aspects of managing your organization’s money, from how to accept, document and deposit donations to how to pay bills. And don’t work without a budget. You can’t control overspending or invest a surplus if you don’t know they exist. For more tips on avoiding accounting mistakes, contact us  READ MORE +

Financial Basics for a Nonprofit's Board

Many people consider a position on a nonprofit board a recognition of their financial contributions and other efforts to support the organization. But it goes well beyond that. One of the main fiduciary responsibilities of a board member is helping oversee the financial health and accountability of their organization.  READ MORE +

Will your favorite charity accept your donation?

If your estate plan includes charitable donations, be sure to discuss any planned gifts with the intended recipients. Some charities have policies of rejecting gifts that come with strings attached; they accept only unrestricted gifts. Others may not accept certain types of assets, such as real estate. If a charity rejects your gift, the property will go to any contingent beneficiaries. If these beneficiaries aren’t other charities, rejection of the gift may create estate tax liability. Contact us to learn about additional pitfalls when making gifts to charity.  READ MORE +

Nonprofits and their staffers can save tax with an accountable plan

When your nonprofit’s employees submit expenses for reimbursement, you generally must report the payments on W-2 forms, withhold applicable taxes and pay the employer portion of employment taxes. But with an accountable plan in place, you can avoid these steps and save both staffers and your organization taxes. Expenses covered in an accountable plan must have a business connection, be “reasonable” and be properly documented. Additional rules apply, and your plan should be put in writing in case the IRS ever challenges it. We can help you do this.  READ MORE +

Why nonprofits need continuity plans

All organizations, not-for-profit and for-profit alike, need a continuity plan for when disaster strikes. But these plans are particularly critical for organizations that provide essential human and emergency services. Start by assessing threats to your people, processes and technology. Then consider best and worst outcomes regarding personal injury, property damage and financial losses and how you can mitigate any damage. Although everyone should provide feedback, assign one person to take the lead and create the plan document. For additional tips, contact us.  READ MORE +

Does your nonprofit need to register in multiple states?

If your not-for-profit solicits funds online, or uses other fundraising methods that cross state boundaries, it may need to register in multiple jurisdictions. The critical activity is soliciting, not accepting, funds. So an unsolicited donation from an out-of-state supporter doesn’t necessarily require you to register in that state. However, widely used communications such as email and text blasts and social media appeals are likely to be considered multistate solicitations. Unfortunately, rules vary widely by state and can be confusing. Contact us for help.  READ MORE +

Don’t make hunches — crunch the numbers

It’s a simple question. If my company buys a given asset, will the asset’s benefits be greater than its cost? Some basic ways of finding an answer ignore the time value of money. That’s why it’s better to look to discounted cash flow metrics. For example, net present value measures how much value a capital investment adds to the business. And internal rate of return estimates a single rate of return that summarizes the investment opportunity. We can help you use these and other metrics to make better business decisions.  READ MORE +

Should your nonprofit outsource HR management?

Does your not-for-profit have too much work and not enough staff to go around? Consider outsourcing your human resources function. It could give your employees more time to spend on other core duties, mission-driven programs and strategic plans and help reduce costs. Even if after performing a cost-benefit analysis you find that it costs more to outsource, you may want to move forward because most HR providers will have better tools and more time to spend on employee issues than your organization does. But there are downsides, too.  READ MORE +

When it comes to charitable deductions, all donations aren’t created equal

As you file your 2016 income tax return and plan your charitable giving for 2017, it’s important to keep in mind the available deduction. It can vary significantly depending on a variety of factors. Other than the actual amount you donate, one of the biggest factors that can affect your deduction is what you give.  READ MORE +

Make sure your nonprofit’s bylaws are on point

Bylaws are the rules and principles that define your not-for-profit’s governing structure. Your board and staff need to be familiar with exactly what the bylaws contain — and what they don’t. If they’re incomplete or don’t reflect the organization’s current mission, revising them is critical.  READ MORE +

What your nonprofit can learn from for-profit businesses

If your not-for-profit is “stuck” and unsure how to move forward, consider adopting some for-profit business practices. The essential missions of businesses and nonprofits may be different, but ways to achieve them often are the same. For example, the strategic plan lies at the core of most for-profit businesses and should be at the core of nonprofits, too. Your plan should set objectives for one, five and 10 years out, paying particular attention to each goal’s return on investment. To learn more about business practices that benefit nonprofits, contact us.  READ MORE +

Give your board members a break — and your nonprofit a boost

A board retreat can give board members a break and your nonprofit a boost. Board members lead busy lives and may not get to every board meeting, so a retreat that brings everyone together in a relaxed setting can be invaluable. Retreats enable participants to get past the mundane topics of regular meetings and delve into specific issues. To get the most out of your retreat, choose the time and place carefully, create a detailed agenda and make a postretreat plan for following up on decisions made during the retreat. Contact us for help with nonprofit governance.  READ MORE +

Put Email List Segmentation to Work for Your Nonprofit

If you send all of your not-for-profit’s communications (donation requests, newsletters, meeting announcements) to everyone on your email list, don’t be surprised if stakeholders tune out or even unsubscribe. By getting the right messages to the right people, email segmentation can help increase engagement and response rates. Consider segmenting your list by donation amount, event participation, membership renewal, volunteer hours and even demographics, if you have that data. Contact us for more tips on improving your nonprofit’s efficiency and effectiveness.  READ MORE +

Time for a nonprofit internal controls check-up

Your nonprofit’s internal controls are strong only if they’re current. So perform a risk assessment every time you experience major organizational changes, such as significant expansion, or when factors such as the loss of a large grant put new stresses on your not-for-profit. Two functions deserve particular scrutiny.  READ MORE +
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