Not for Profit

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 [...]

How committed is your not-for-profit organization to benchmarking? Perhaps you think it makes sense in the for-profit sphere, but not as much for charities and other nonprofits. If so, you’re probably missing out on benefits — including long-term sustainability. Here’s how to overcome reluctance and learn to love benchmarking. True impact Even if your staff and board believe benchmarking fails to capture the true impact [...]

No one needs to tell nonprofit organizations how tough the past year has been. According to the John Hopkins Center for Civil Society Studies, 7.7% of not-for-profit workers — nearly one million people — lost their jobs between February 2020 and January 2021. An even higher percentage of arts and education organizations lost jobs last year. Although the nonprofit sector received higher-than-usual donations in 2020, [...]

Events of the past year put a dent in many not-for-profit’s reserves. Perhaps you tapped this stash to buy personal protective equipment or to pay staffers’ salaries when your budget no longer proved adequate. As the pandemic wanes and economic conditions improve, you’ll need to start thinking about rebuilding your operating reserves. Back on steady ground Assembling an adequate operating reserve takes time and should [...]

Thousands of not-for-profit organizations fall victim to embezzlement schemes every year — some even losing millions of dollars. But losses go beyond actual dollar amounts. The hit to a group’s reputation may scare off donors, grantmakers and other supporters. However, with the right response, nonprofits can bounce back from fraud. Here’s how. One best practice A study published in the Journal of Accounting, Ethics & [...]

With the competition for donation dollars fierce right now, many not-for-profits are turning to influencers — from Hollywood celebrities to politicians to blog stars — to raise awareness of their organizations and causes. But before your nonprofit solicits influencer support, there are a few things you should know. On the plus side If influencer marketing didn’t work, for-profit companies wouldn’t pay celebrities to tout their [...]

Many organizations get stuck in procedural ruts because it’s easier in the short term to continue doing things the way they’ve always been done. But it generally pays to regularly review your not-for-profit’s accounting function for inefficiencies and oversight gaps. You might plan to conduct a review once a year or perform an assessment whenever significant changes, such as staff turnover or the introduction of [...]

If your not-for-profit has lost financial support during the pandemic, you may be looking for ways to raise new revenue. But if your proposed solution is a side business, be careful. Even when business ventures are related to a nonprofit’s exempt purpose, they can run afoul of the commerciality doctrine — and jeopardize an organization’s tax status. Countering an unfair tax advantage The commerciality doctrine [...]

Many not-for-profits have been too busy trying to stay afloat to put a lot of resources and energy into public relations. But as the new year begins, you might start thinking about how you’ll promote your organization, mission and programming in 2021. Here are five suggestions: 1. Report regularly. Raise your nonprofit’s profile by releasing news releases often rather than just occasionally. The addition of [...]

Most not-for-profit organizations collect vast volumes of data. But according to a study conducted by EveryAction and Nonprofit Hub, only 40% of nonprofits regularly use that data to drive decisions. The majority of organizations that don’t analyze and apply data say they lack the time or staff to dedicate to it. But because it helps prevent bad decisions that must later be revisited and revised, [...]

It’s been almost a year since many not-for-profit organizations sent staffers home — to work remotely. For many nonprofits and employees, remote work has been a positive experience. And as the pandemic fades, you’ll probably need to decide whether employees should remain where they are, return to the office or work a hybrid schedule. Win-win proposition Various surveys have found that working remotely generally lifts [...]