A formal whistleblower policy is critical to protecting your not-for-profit’s financial security and public reputation. Your policy should state which individuals (for example, staffers, volunteers and clients) and activities (such as fraud, conflicts of interest and discrimination) are covered. Also explain how reports will be investigated and what will happen when investigations end. It’s particularly […]

Directors and officers (D&O) liability insurance enables board members to make decisions without fear that they’ll be personally responsible for any related litigation costs. Such coverage is common in the business world, but many not-for-profits incorrectly assume that their charitable mission and the volunteer status of their board insulate them from lawsuits. To determine whether […]

Restricted gifts can be difficult for not-for-profits to manage. Unlike unrestricted gifts, these donations can’t go into your general operating fund and be used where they’re most needed. Some donors will be determined to make restricted gifts, but you may be able to persuade others to remove restrictions if you explain how the money will […]

Signs of financial distress in a not-for-profit can be subtle. But board members have a responsibility to recognize them and do everything in their power to avert potential disaster. Pay particular attention to: 1. Budget bellwethers. Confirm that proposed budgets are in line with strategies already developed and approved. Once your board has signed off […]

Raffles are popular fundraisers for not-for-profits. But they’re subject to strict tax rules. State laws on nonprofit-sponsored raffles vary, but you must comply with federal income tax requirements. First, you may owe unrelated business income tax unless your fundraiser is “substantially” staffed by volunteers. Second, raffle winnings must be reported to the IRS when the […]

Americans support charities for a variety of financial, emotional and social reasons, and some of them aren’t so obvious. For example, wealthy donors may be motivated by not only tax and asset protection considerations, but also a desire to limit what they leave to their children to prevent a “burden of wealth.” Younger donors often […]

Not-for-profits that direct and benefit from volunteers can be held accountable if those individuals are harmed or harm others on the job. Your organization needs to take steps to limit this risk, including screening volunteer candidates. Positions that carry greater risks, such as work involving children and other vulnerable populations, or access to cash donations, […]

Communication breakdowns between a not-for-profit’s development and accounting departments can lead to confusion, embarrassment and even financial problems. Here are three ways your organization can facilitate cooperation between these two critical functions. 1. Recognize differences Accounting and development typically record their financial information differently, which is why they can produce numbers that vary but nonetheless […]

To err is human, but some errors are more consequential — and harder to fix — than others. Most not-for-profit organizations can’t afford to lose precious financial resources, so you need to do whatever possible to minimize accounting and tax mistakes. Get started by considering the following five questions: Have we formally documented our accounting […]

As the holidays approach and the year draws to a close, many taxpayers make charitable gifts — both in the spirit of the season and as a year-end tax planning strategy. But with the tax law changes that go into effect in 2018 and the many rules that apply to the charitable deduction, it’s a […]