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The Overlooked Effects of Changing a Fiscal Year-End
“Should we change our fiscal year-end?” This an interesting question that will naturally pop up over time for many nonprofit organizations. As with most complicated, multi-layered questions, the highly visible positive aspects need to be balanced against potential negative outcomes that are often hidden or ignored. One often-overlooked downside of a change in fiscal year-end (FYE) is the impact on an organization’s operating reserves.
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Applying Segregation of Duties Beyond Standard Checks and Balances [SUBSCRIBERS-ONLY]
Segregation of duties is a bedrock principal of internal accounting control systems and is visible in many elements of nonprofit organization accounting policies and procedures. Without segregation of duties, internal accounting control systems would not be safe or effective. Less often recognized is the powerful impact segregation of duties can have when applied to operational planning and resource management.
To Be Sustainable, Nonprofits Need to Have Profits
It is difficult to search for a single aspirational goal that works for all nonprofit organizations because nonprofits are a lot like people, with no two organizations exactly alike. However, I believe there is one aspirational goal that most nonprofits have in common: to have a long, stable, and sustainable existence. To achieve this goal, nonprofits need to commit to making a profit.
Building Trust and Connection with Financial Reports
Financial reports for nonprofit organizations are important. Most people agree on this point. The challenge lies in getting people to connect with and trust financial reports. When trust and connection are absent, financial reports go unused. Getting users to trust financial reports requires mostly routine tactics while getting them to connect with financial reports requires more personalized creative approaches.
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Determining When to Involve the Board in HR Matters [SUBSCRIBERS-ONLY]
Nonprofit organizations must be extra vigilant when it comes to managing unexpected and often rapidly changing human resources (HR) issues. Hesitation to react can lead to dire consequences. However, reacting without meaningful contemplation can be equally dangerous. One critical consideration is how to develop guidance for discussions and messaging with Board members on changing HR issues.
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Capital Campaigns and the Impact of Donor Fatigue [SUBSCRIBERS-ONLY]
Capital campaigns generate a lot of excitement and buzz for nonprofit organizations. Leveraging and harnessing this energy feeds hope for a brighter future. However, nonprofits must maintain a focus on protecting long-term financial health. At the conclusion of the capital campaign, the organization must be in a stronger position. One critical consideration is gauging the negative impact on current and future cash in-flows resulting from donor fatigue.
Three Steps to Simplify Monitoring the Balance Sheet
Balance sheets are part of standard nonprofit organization financial reporting. However, balance sheets are intimidating to most individuals and often misunderstood. Simplifying the monitoring process is key to improving engagement, enhancing understanding of the balance sheet, and helping individuals to fulfill their financial oversight roles and responsibilities.
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Use This Simple Question to Improve Board and Committee Member Engagement [SUBSCRIBERS-ONLY]
Keeping nonprofit organization Board and committee members engaged is often more art than science. The reason this task is so difficult is because of the delicate balancing act between gratitude and appreciation. It is relatively easy to show gratitude and thank volunteer leaders for attending meetings. It is another thing to make sure these volunteer leaders leave each meeting with a feeling that it was a good use of their time, that they were actively involved in discussions, and the organization appreciated and valued their input.
The Wrong Way to Add a Charitable Arm to a For-Profit Business
I often receive inquiries from entrepreneurs who are looking to add a philanthropic component to an existing for-profit business, such as by forming a nonprofit as a charitable arm or subsidiary of their business or starting a corporate foundation. These ideas are usually well-intentioned. However, mixing business and charitable activities too closely can make IRS approval of 501(c)(3) status an uphill battle.
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Enhanced Management Strategies for Indirect Costs [SUBSCRIBERS-ONLY]
There are many aspects to consider when it comes to managing a nonprofit organization’s indirect costs. We often think first about compliance rules, which are naturally complicated and can vary by funding source and an organization’s own internal accounting policies and procedures. One aspect we tend not to emphasize enough is staff and their propensity to be disinterested and disconnected when it comes to considering and managing indirect costs.
Three Steps to Be Better Prepared for Public Disclosure Requests
How a nonprofit organization responds to public disclosure requests provides a clear window to its commitment to accountability and transparency. However, many organizations are insufficiently prepared to respond to requests for documents. This can lead to compliance failures and/or inadvertently sharing sensitive information that was not required to be disclosed.
The Importance of Your First Year of Board Service
Serving on a nonprofit organization’s Board can be a rewarding and often life-changing experience. The first year of Board service will set the stage for the remainder of your time on the Board and directly affect opportunities for engagement, impact, visibility, quality of experience, and advancement. Our 4-part New Board Member Planning and Preparation Series aims to help new Board members set basic goals and develop realistic expectations for success during this critical early stage of their Board tenure.
With Your First Year of Board Service Complete, What’s Next?
As your first year of nonprofit Board service winds down, it is time to pause and reflect on the past year and start setting goals for year two. Your first year of Board service is all about learning and observing. Learning about the organization’s strategic plans and culture while observing engagement of fellow Board members. For the second year, your emphasis should shift to purposeful commitment based on what you learned in year one.
Planning for Your First Year of Board Service
With your first nonprofit organization Board meeting completed there is a tendency to relax, as the natural concerns and hesitancies that come with taking on a new role with new experiences start to dissipate. Avoid taking your foot off the gas. Now is the time to turn your thoughts to the year ahead and how you can make the most of your first year of Board service.
Preparing for Your First Board Meeting as a New Board Member
You only get one first Board meeting as a new Board member of a nonprofit organization. Thoughtful front-end preparation for your first Board meeting is essential to help you to make a lasting impression that you are serious about your commitment and appreciative of the honor.