If your not-for-profit is “stuck” and you’re not sure how to move forward, consider adopting some for-profit business practices. The essential missions of businesses and nonprofits are different, but the ways to achieve them often are the same.
Make a plan
The strategic plan — a map of near- and long-term goals and how to reach them — lies at the core of most for-profit companies. If your nonprofit doesn’t have a strategic plan or has been lax about revising an existing one,
Your not-for-profit’s board members likely lead busy lives, so they may not get to every board meeting. That’s why it’s essential to organize periodic board retreats that bring everyone together in a relaxed setting.
Board retreats enable participants to get past the mundane topics of regular board meetings and delve deeply into specific issues. To take advantage of this opportunity, do the following:
Your not-for-profit likely has a growing list of email addresses for donors, members, volunteers and other supporters. Are you making the most of it? If you send every one of your organization’s communications — donation requests, newsletters, meeting announcements — to everyone, you probably aren’t using these addresses as effectively as you could. Email segmentation can help you get the right messages to the right people.
Not everyone is interested in everything your nonprofit has to say,
Everyone from major donors to grantmakers, charity watchdog groups to the government, will read your not-for-profit’s annual report and use it to make important decisions affecting your organization. So you need to make sure it’s professional, substantive and accurate — and interesting enough to grab and keep readers’ attention.
Cover the basics well
Most nonprofit annual reports consist of several standard sections, including:
Chairman of the Board’s letter.
Your not-for-profit’s board members may be able to offer access to better deals or services than your organization could get on its own. However, there’s a fine line between a board member helping your nonprofit get fair pricing and the member receiving perceived or actual personal benefits. The latter can threaten your exempt status.
A fictional example can help illustrate what nonprofits should do in such circumstances:
A charity needs a printer to produce programs for its annual gala.
An informal, ad hoc approach to fundraising can waste time, resources and opportunities. To ensure that doesn’t happen, your not-for-profit needs to form a committee to create and execute a strategic fundraising plan.
Your fundraising committee should include board members, your executive director, key staff members and possibly other stakeholders such as major donors. Its work begins with identifying past funding sources and approaches, and the advantages and disadvantages of each.
Many not-for-profits depend on funds raised at an annual gala or other special event to keep their organization in the black. But successful events require a careful balancing act. You need to keep a tight rein on expenses, yet attract and entertain generous supporters. Here are some ideas for maximizing revenues.
Sometimes you have to spend money to make money. However, a long-held rule of thumb among nonprofits says that the cost of a fundraising event shouldn’t exceed 30% of net proceeds.
Because restricted gifts have stringent rules attached, they can be difficult for not-for-profits to manage and account for. How, then, do you encourage donors to make unrestricted gifts that your organization can use as it deems necessary? Here are four suggestions:
1. Praise the benefits of unrestricted gifts when speaking with potential donors. Explain how your organization uses donations, offering hard numbers and specific examples where needed. Give them as much information as you can about your organization and its decision-makers so that donors feel they can trust you to make the best choices about how their gifts are put to work.
Even though most tax-exempt organizations do not pay federal taxes, most of them have to file an annual information return, which is called a Form 990.
Form 990 is an annual information return required to be filed with the IRS by most organizations exempt from income tax under section 501(a), and certain political organizations and nonexempt
The term “audit” usually sparks apprehension in us all. Most of us are familiar with the term from the IRS. Let’s be honest, none of us “want” to be audited. However, it’s not always a bad thing.
In actuality, a financial audit most commonly refers to an independent review of an organization’s financial books. Usually conducted annually, it’s really just a part of a reliable checks-and-balances system to make sure everything is in order.