Not for Profit

If you’re a leader of a private foundation, you’re probably aware of the prohibition against self-dealing transactions between foundations and “disqualified persons.” But what constitutes self-dealing? And who exactly counts as disqualified in this context? It’s important for you to know because financial repercussions for violating the rules can be severe. Who is disqualified? The IRS defines disqualified persons as substantial contributors (generally, large donors), [...]

Most not-for-profit leaders are familiar with the concept of excess benefit transactions and the need to avoid them. But a refresher course may be in order, particularly when you consider that 501(c)(3) organizations determined by the IRS to have violated the rules can be liable for penalties of 25% to 200% of the value of the benefit in question. They may also risk a revocation [...]

At one time, not-for-profit HR departments might have been responsible primarily for recruiting and hiring and occasionally for intervening in disciplinary or conflict resolution matters. Today, HR staffers usually also administer benefits, provide employee orientation and training, draft and update various policies, ensure regulatory compliance, and keep employee records. They may even oversee payroll. That’s a lot of responsibility, and not every nonprofit has the [...]

There are many ways to evaluate the success of a not-for-profit event. But for most nonprofit leaders, financial success — how much did we raise? — is the metric that ultimately matters. To be financially fruitful, nonprofit events need sponsors (companies and individuals) to cover a portion of expenses. Be sure to make securing sponsorships central to planning your organization’s events. Best practices Depending on [...]

The deadline for most not-for-profits to file Form 990 with the IRS (May 15, 2024) has come and gone. Assuming your organization operates on a calendar-year tax basis and filed its Form 990 on time, you probably don’t want to think about tax reporting again until next spring. However, it’s important to keep your future Form 990 in mind as your organization carries out its programs and events this year. [...]

To administer productive programs worthy of your not-for-profit’s budget, you need to determine whether they’re meeting clients’ needs. In general, the best way to assess this is by surveying participants. But survey fatigue — frustration or disinterest when asked to take yet another online survey or one that’s overly complicated or takes too long to complete — is a real and growing problem. Multiple studies [...]

External audits can help assure your not-for-profit’s stakeholders that your financial statements are fairly presented according to U.S. Generally Accepted Accounting Principles. They can also help prevent occupational fraud. Often, audit reports contain recommendations for organizations to act on. And if you fail to make changes that respond to risks or concerns discovered in an audit, it could threaten your nonprofit’s future. Discuss the report [...]

In 2023, Indiana University’s Lilly Family School of Philanthropy released a public opinion survey that provided both good and bad news for nonprofits. Although the respondents said they trust philanthropic organizations more than government and businesses, 30% believe that not-for-profits are on the “wrong track.” Only 18% say charities are on the “right track.” (The rest of the surveyed individuals were undecided.) Obviously, you want [...]

Alternative investments may appeal to your not-for-profit because they often offer higher long-term performance than traditional securities do. But these investments can come with tax liabilities. They also typically are riskier, which may not be appropriate for your organization. Here’s what you need to know. No easily ascertained value Alternative investments generally are defined in contrast to more traditional securities, such as stocks, bonds and mutual funds. [...]

Comprehensive risk management is one of the primary responsibilities of not-for-profit leaders. You probably regularly consider and act to mitigate risk to your facilities and assets and your staffers and clients. What about your volunteers? Even though the federal Volunteer Protection Act of 1997 provides some protection, volunteers face the real risk of being sued for actions while working for your organization. They also can [...]

The United States is entering the most natural-disaster-prone time of the year. Tornadoes are most likely to occur in May, and the Atlantic hurricane season starts on June 1. Not-for-profits that provide aid to disaster victims — whether it’s medical care, food, clothing, shelter, cash or rebuilding assistance — are gearing up for potential emergencies. But if your organization operates in this space, know that when [...]

According to the Association of Certified Fraud Examiners’ (ACFE’s) Occupational Fraud 2024: A Report to the Nations, not-for-profits suffer roughly half the median loss per fraud scheme of for-profit businesses and government entities — $76,000 vs. $150,000. That may sound like good news, except for the fact that most nonprofits are on tight budgets and can’t afford to lose anything. To help keep your nonprofit’s [...]

For many not-for-profit organizations, maintaining a full and active board of directors is challenging. If your board holds frequent meetings, has high attendance expectations and requires members to do considerable “homework,” you may have trouble recruiting and retaining people. Qualified individuals generally are busy with work, family and other activities and may not have spare time to dedicate to all the duties expected of board [...]

When a Category 5 hurricane struck a coastal community, its most prominent health and human services charity was prepared to act with rescue plans, supplies, emergency shelters and well-trained staffers. What the not-for-profit wasn’t prepared for was a sudden influx of support, including donations. Too much support may not sound like a problem, but for nonprofits that aren’t prepared for a flood of attention and new [...]