Categories for Non-Profit

Aug
09
2019

What to do if your nonprofit receives an IRS audit letter

The IRS’s staffing shortages have been well publicized. But it’s a mistake to assume that the agency has stopped scrutinizing not-for-profits. Don’t panic if you receive an audit letter. The letter will inform about whether the IRS is conducting an in-person, field audit or a correspondence audit. This second type simply requires you to send requested records to the IRS. However, a correspondence audit can turn into a field audit if you don’t respond promptly.

Aug
07
2019

Making your nonprofit’s special event profitable

As in the for-profit world, sometimes not-for-profits need to spend money to make money. This is particularly true when it comes to fundraisers. At the same time, it’s critical that you make a budget and stick to it. Estimate expenses for such items as facility rental, food and drinks and entertainment, and then scrutinize the list for what can be reduced or cut. You might be able to find a business sponsor to help defray costs.

May
24
2019

Fundraising

Developing a fundraising plan that works

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A not-for-profit can have many strengths and still struggle to meet fundraising goals because it lacks a strategic fundraising plan. To develop one, form a fundraising committee consisting of board members, executives and key staffers. Review historical funding sources and approaches, and weigh the advantages and disadvantages of each. Then brainstorm new sources and approaches. A functional budget is crucial. It should include operating expenses,

Dec
27
2018

Nonprofit member surveys: Dos and don’ts for the 5 D’s

Many not-for-profits take the pulse of their membership with regular surveys but fail to conduct them strategically and end up with useless information. Maximize your next survey’s effectiveness by focusing on your objectives during every stage of the process. For example, start by defining what you want to learn so that you don’t ask members for information you can’t use. Design your survey with specific questions and explain to participants how you plan to use the results.

Dec
22
2018

Don’t let the “commerciality doctrine” trip up your nonprofit

The commerciality doctrine was created to address concerns over not-for-profits competing at an unfair tax advantage with for-profit businesses. Organizations that don’t pass muster could lose their tax-exempt status. Even business activities related to your nonprofit’s exempt purpose could fall prey to the doctrine. Courts consider several factors, including whether you sell to the general public, set prices to maximize profits and accumulate unreasonable reserves. Contact us before launching a revenue-generating business.

Nov
20
2018

How successfully has your nonprofit shifted from overhead to impact?





Overhead ratios can help potential donors weed out spendthrift not-for-profits. Yet a narrow focus on this one metric tends to unfairly penalize organizations making reasonable current expenditures and strategic investments. To communicate with donors that “impact” (the indirect effects of measurable outcomes) is the best measure of nonprofit effectiveness, add supplemental financial statements and break out administrative items in your annual report. Such enhancements can help you explain how expenditures result in enhanced programs that positively affect lives.

Nov
10
2018

Why your nonprofit’s internal and year end financial statements may differ





If your not-for-profit prepares internal financial statements for your board on a monthly, quarterly or other basis, you may notice that they deviate in significant ways from year end statements. What’s going on? Most likely, differences are due to cash basis vs. accrual basis accounting. Your auditors likely convert your cash basis financials to accrual basis statements. The statements also may differ because your auditors have proposed adjusting certain entries for reasonable estimates.

Oct
30
2018

Nonprofits: Here’s how to embrace accountability





Embracing accountability helps your nonprofit demonstrate openness and fulfill its fiduciary responsibility. Accountability starts with complying with applicable laws and rules and committing to using resources to support your mission. There can be no accountability without good governance, and that’s ultimately up to your board. Your board needs to understand the importance of its role and focus on big-picture items, not process-oriented details. Finally, communicate accountability with your annual report and Form 990.

Oct
19
2018

Volunteers are assets nonprofits must protect





One not-for-profit advocacy group estimates the value of the average volunteer at $24.69 an hour. Whether your entire workforce is unpaid or you rely on a few volunteers to support a paid staff, these assets must be safeguarded. Consider “professionalizing” your program with formal training, set schedules and performance reviews. To keep volunteers engaged, match their skills and interests with tasks. Also, make the work fun by facilitating friendships with other volunteers through mentoring and volunteer-only activities.

Aug
24
2018

Time-Sensitive Changes to Arizona Tax Credits

EDIT: Correction made to the effective date.

In the past you may have given to various Arizona charitable organizations that allowed for a $1-for-$1 state tax credit on your tax return. These included donations to Qualifying Charitable Organizations, Qualifying Foster Care Charitable Organizations, Public Schools, the Arizona Military Family Relief Fund, and Private School Tuition Organizations (STOs).  Changes are coming related to the rules of how this works, and there is a very narrow window (8/24/18-8/27/18) if you wanted to take advantage of making the 2018 tax credit donations before the new rules are made effective.