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 […]

It’s critical for nonprofit organizations to be on the lookout for fraud throughout the year, but even more so during the busy holiday and year-end season. You can help prevent fraud by enforcing internal controls regardless of how busy staffers are processing donations or completing other end-of-year tasks. Possibly the most important control is segregation […]

Overhead ratios can help potential donors weed out spendthrift not-for-profits. Yet a narrow focus on this one metric tends to unfairly penalize organizations making reasonable current expenditures and strategic investments. To communicate with donors that “impact” (the indirect effects of measurable outcomes) is the best measure of nonprofit effectiveness, add supplemental financial statements and break […]

If your not-for-profit prepares internal financial statements for your board on a monthly, quarterly or other basis, you may notice that they deviate in significant ways from year end statements. What’s going on? Most likely, differences are due to cash basis vs. accrual basis accounting. Your auditors likely convert your cash basis financials to accrual […]

Not-for-profits often struggle with valuing noncash and in-kind donations. Although the amount that a donor can deduct generally is based on the donation’s fair market value (FMV), there’s no single formula for calculating it. FMV is the price that property would sell for on the open market. There are three particularly relevant FMV factors: 1) […]

Embracing accountability helps your nonprofit demonstrate openness and fulfill its fiduciary responsibility. Accountability starts with complying with applicable laws and rules and committing to using resources to support your mission. There can be no accountability without good governance, and that’s ultimately up to your board. Your board needs to understand the importance of its role […]

Whether a not-for-profit is merging with another organization or making an acquisition, leadership is responsible for decisions during five phases. In the idea phase, executives and board members discuss the benefits of merging. Next, the two organizations formalize their decision to merge. During development, key leaders are evaluated for their skills and the role they […]

Licensing your not-for-profit’s name to a for-profit company can provide a valuable new revenue source — but it can also be risky. If you’re considering a licensing arrangement, ensure that the partnership really will generate funds and, possibly more important, a positive impression of your brand. Success . . . and controversy When licensing arrangements […]