Most not-for-profits believe they cannot afford to turn down offers of financial support. At the same time, such organizations should not blindly accept funding simply because it is offered. Some grants may come with excessive administrative burdens, cost inefficiencies and lost opportunities.
First the COVID-19 pandemic wreaked havoc on nonprofit organizations' finances and operations. Now, many organizations are worried about how high inflation and a possible recession might interfere with plans.
Does your board have a quick and easy way to assess your nonprofit's financial performance? It does if it has a dashboard with carefully chosen and up-to-date key performance indicators ("KPIs").
Most non-profits encourage donors to make unrestricted contributions that will give the organization flexibility to use the money where it is needed most. But there will always be some donors who place restrictions on their gifts, and these require a higher level of responsibility.
The typical defrauded nonprofit loses $75,000 per fraud incident, according to the Association of Certified Fraud Examiners - and that does not account for the negative publicity and subsequent lost donations and support that often follow fraud.
Annual audits are not an event many not-for-profit organizations look forward to. However, regular maintenance and preparation specific to an impending audit can make the process less disruptive.
Not-for-profit organizations that accept contributions of nonfinancial assets, such as land, services and supplies, need to know about Financial Accounting Standards Board rules approved last year.
It is a good idea to regularly review the accounting function of a not-for-profit organization for inefficiencies and oversight gaps.
Financial audits are among the most effective tools for revealing risks in not-for-profit organizations. Independent audits help assure donors and other stakeholders about the stability of an organization so long as the audit results are responded to appropriately.
Does your private foundation have a detailed conflict-of-interest policy? If not, or if the policy is not followed closely, you could face IRS attention that results in penalties and even the revocation of your tax-exempt status. Learn how to prevent accusations of self-dealing.
As unemployment and financial insecurity become widespread during the novel coronavirus (COVID-19) crisis, many not-for-profit donors find themselves unable to provide monetary support to their favorite charities.
Outside financial audits may seem like an extravagance to not-for-profits working to contain costs and focus on their mission. However, undergoing regular audits allows an organization to identify risks early and act quickly to prevent problems.
A hypothetical not-for-profit staffer named Britney had maxed out her personal credit cards. So when her car needed repairs, she reached for her employer's card. She reasoned that she would come up with the money to pay the bill before her boss ever saw a statement.
Accounting for contributions and grants can be complicated for not-for-profits, especially when they come with donor-imposed conditions. However, 2018 guidance from the Financial Accounting Standards Board (FASB) provided some much-needed clarification.
Here's how nonprofits open the door to fraud - and how your organization can shut it.
The IRS's staffing shortages have been well publicized and audits of individuals have decreased in the past several years. But it is a mistake to assume that the agency has stopped scrutinizing not-for-profits and conducting audits when it deems necessary.
Not-for-profit board members have a fiduciary duty to the organization. Some states have laws governing the activities of nonprofit boards and other fiduciaries. But not all board members are aware of their responsibilities.
What would happen if one of your managers was suddenly forced to take long-term disability leave? Or an accounting staffer quit without notice? It is possible that your not-for-profit's work could come to a standstill, unless you have cross-trained your employees.
The ability of your not-for-profit to pursue its mission depends greatly on its financial health and integrity. If your nonprofit is growing and your executives are struggling to juggle financial responsibilities, it may be time to hire a chief financial officer (CFO).
It is a well-known truism in the corporate world: Organizations that do not evolve run the risk of becoming obsolete. Just like their for-profit counterparts, not-for-profit organization also must anticipate and react to market demands.