Not for Profit

“Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards” (Uniform Guidance) applies to all not-for-profits that accept federal funding. It has been updated and amended several times, most recently in 2020. So if you haven’t reviewed your own organization’s procurement policies lately, now’s a good time to ensure you’re in compliance. Pay attention to amounts Uniform Guidance imposes some strict purchasing requirements on [...]

Collective impact projects are collaborations between not-for-profits, government, businesses and communities with the goal of achieving challenging and complicated social objectives. They can succeed in ways that simply aren’t available to individual organizations. But they also require a level of commitment your nonprofit may not be prepared for. A common cause Collective impact is more than just collaboration. Its originators describe it as the commitment [...]

It takes more than dedication and enthusiasm for your not-for-profit’s cause and programs to make a good board member. The most critical duty for all board members is being a fiduciary. This means, among other things, that they can be trusted to always act in their nonprofit’s best interests, avoid unnecessary risk, make decisions thoughtfully and execute them efficiently. Core duties Not all board members [...]

COVID-19 was a kind of disaster most not-for-profits weren’t prepared for. As your organization recovers from this unusual event, don’t let it become vulnerable to other, more common, threats. Every nonprofit needs a formal disaster plan for such risks as a fire, natural disaster or terrorist attack. Isolate threats No organization can anticipate or eliminate all possible risks, but you can limit the damage of [...]

Many Americans remain unemployed due to the COVID-19 pandemic — at least 9.8 million at the end of April, according to the U.S. Bureau of Labor Statistics. But that’s expected to change quickly as employers ramp up hiring activities. If your not-for-profit will soon need new staffers, you might want to start putting out feelers now. Obviously, the decision to hire is a difficult one considering [...]

As the COVID-19 pandemic finally seems to be fading in the United States, your not-for-profit organization may be making plans for its post-pandemic future. Is a merger with another nonprofit part of these plans? A merger can provide your organization with greater stability and resilience so that you can survive any new challenges that comes your way. But a merger isn’t always the best solution [...]

As states open for business and the need for social distancing recedes, your not-for-profit organization may want to think about scheduling an in-person retreat for your board of directors. Members are likely to welcome the opportunity to see one another again in the flesh and a retreat can provide them with a chance to de-stress and think creatively about how your nonprofit should move forward [...]

If your not-for-profit organization accepts contributions of nonfinancial assets, such as land, services and supplies, you should know about Financial Accounting Standards Board (FASB) rules approved last year. Accounting Standards Update (ASU), Not-for-Profit Entities (Topic 958): Presentation and Disclosures by Not-for-Profit Entities for Contributed Nonfinancial Assets is intended to increase transparency around gifts in kind. Inflated values The updated rules were generated in response to [...]

If your not-for-profit periodically prepares internal financial statements for your board, you may have noticed that your auditors propose adjustments to these interim statements at year end. Why do auditors do this? Generally, it reflects differences due to cash basis vs. accrual basis financial statements. But you can help minimize the need for such adjustments. Here’s how. Cash basis accounting Under cash basis accounting, income [...]

Not-for-profit organizations may operate under the assumption that their missions and their board members’ good intentions protect them from litigation. Sometimes, this assumption is proven wrong with a lawsuit. To protect your leaders from financial exposure, consider directors and officers (D&O) liability insurance. This coverage allows board members to make decisions without fear that they’ll be personally responsible for any related litigation costs. Protecting key [...]

Not-for-profit organizations are different from for-profit businesses in many vital ways. One of the most crucial differences is that under Section 501(c)(3), Sec. 501(c)(7) and other provisions, nonprofits are tax-exempt. But your tax-exempt status is fragile. If you don’t follow the rules laid out in IRS Publication 557, Tax-Exempt Status for Your Organization, the IRS could revoke it. Be particularly alert to the following common [...]

High-net-worth individuals donated $5.8 billion during the first six months of the COVID-19 pandemic — generous giving by most standards. This is according to a recent report, “Philanthropy and COVID-19 in the first half of 2020,” from the Center for Disaster Philanthropy and information service Candid. However, that $5.8 billion amount is deceptive, because nearly three-quarters of it came from one donor, Mackenzie Scott (the ex-wife of [...]

Many not-for-profits are just starting to emerge from one of the most challenging environments in recent memory due to the COVID-19 pandemic. Even if your organization is in good shape, don’t get too comfortable. Financial obstacles can appear at any time and you need to be vigilant about acting on certain warning signs. Consider the following. Budget variances Once your board has signed off on [...]

According to the Nonprofit Times, only 41% of not-for-profits have whistleblower policies. Perhaps nonprofit leaders believe their organizations are too small or collegial to worry about illicit activities — let alone people reporting them. Or perhaps a whistleblower policy seems like one more thing that requires time and money they don’t have. This is a mistake. Here’s why. Why you should bother No federal law [...]