What does your organization’s current financial close process look like? Whether you scramble every month or feel like things run smoothly, it’s helpful to pay attention to certain key areas.
Financial management
Fundraising in Tough Times (Standford Social Innovation Review) outlines ways organizations can minimize the impacts of economically/financially lean times and preserve their capacity for renewed growth once economic conditions improve.
In-Kind Donations: The Ultimate Guide for Nonprofits: "This guide will teach you about in-kind contributions, issuing donation receipts, and assessing the impact of in-kind donations on nonprofits." (Araize)
As a result of attending this session, you will be able to: (1) understand and apply the three lenses used to complete an impactful Form 990; (2) describe how the Form 990 is organized along with the purposes of each section; (3) differentiate which areas of the Form 990 receive increased attention from the IRS and use that to evaluate the overall effectiveness of your Form 990.
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Presenter Michele Pratt, CLA, shared in-depth details about PPP loan forgiveness, including eligible costs, required documentation, who is eligible to use the EZ application, clarity on limits for both the 8- and 24-week periods, PPP Flexibility Act and the safe harbor date, and the impact on year-end financial statements. She also explored financial modeling, with discussion of the impacts from COVID-19, cash management and cash modeling, contingency plan considerations, and scenario planning.
Jeanne Tedrow, President & CEO, North Carolina Center for Nonprofits
Managing a nonprofit’s finances is no small or easy task. Nonprofits and those who seek to do good while making a difference in our communities are to be commended for their ability to manage resources and revenue. More often than not, nonprofits make a way when many would say there appears to be no way. To make things happen for the good, they become creative as they leverage financial support with in-kind donations and volunteer labor.
Jeanne Tedrow, President and CEO, of North Carolina Center for Nonprofits.
Imagine a customer walking into a pizza shop to order a pizza, then only wanting to pay for the ingredients – flour, sauce, toppings, cheese. (See Pizza and a Laugh ‒ A Reminder about Your Nonprofit Financial Stress Level, Nonprofit Quarterly, December 18, 2018.)
"A broad economic crisis can magnify a nonprofit's pre-existing financial difficulties. Getting through such crises requires communication, transparency, and planning." (Nonprofit Finance Fund) NFF recommends these tips for sound financial planning.
- Who’s responsible for which kinds of oversight? The Board of Directors has overall legal responsibility for the financial health of your nonprofit. Board members need to understand key financial information and policies, and it’s recommended that they look at the following reports at least quarterly: Fiscal year budget (with comparisons to actual expenditures/revenue). Profit and loss statement (including programs).
In a meeting of the National Association of State Charity Officials (NASCO), the National Council of Nonprofits heard directly from a panel of regulators about what conduct can spook state charity regulators into conducting investigations of charitable nonprofits. This resource provides valuable reminders of how nonprofits can maintain their tax-exempt status through fastidious legal compliance.