Nonprofit News Roundup

Posted on March 6, 2009 | 1 comment

News StandIn case you missed any of these:

Here is a NY Times Op Ed that says businesses should be more nonprofit-like.

Need tech stuff?  Have you tried TechSoup yet?  You should check them out and read about these seven solutions for (at least) seven tech challenges.

There are two news pieces from the U.S. Government Accountability Office regarding nonprofits.  The first talks about improving the accuracy that donors report charitable gifts on their tax forms.  The other focuses on where federal dollars received by nonprofits go.

The last paragraph of the second piece has some pretty large implications I think, as it implies that they have trouble collecting data about where the money is going.  Click through to the full report to read more on the data collection issues.  I hope this is something that the GAO will push to be fixed because if the Feds are not getting good information about how the money is being used it might possibly result in less money being available.

Changes in COBRA benefits

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Posted in Nonprofit Accounting, Policies and Procedures, Risk Management

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Why Nonprofits Have Profit

Posted on March 3, 2009 | 2 comments

Money money moneyA question I received recently is a familiar one:

How can I best explain to a non-accountant how we can have a net profit and retained earnings for a not-for-profit organization?

I think the confusion here lies with the term “not-for-profit.” Charitable / Nonprofit / Not-for-Profit organizations are not organized to make a profit for a group of owners or shareholders. They are organized to *do* some kind of charitable purpose. They are mission-driven organizations, not profit driven.

In order for an organization to do its work and carry out its mission on an ongoing basis it must generate more income than the expenses it incurs. It must make a profit. Any organization, either a for-profit or a nonprofit, that does not take in more money than it spends will fail in the end.

The net profits of the charitable organization are retained by the nonprofit and used to further its mission by expanding programs, hiring additional staff, training staff, upgrading equipment or even creating a reserve account. The net profits of a charity are not distributed to the owners as they would be in a for-profit business.

Does that help?

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Posted in Nonprofit Accounting, Q&A

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Operations Manuals

Posted on February 26, 2009 | 1 comment

A ManualI was asked recently how to create an operations manual. The first thing you need to decide is what will be in it.  Will it cover everything or will you have a separate personnel and financial policy / accounting manual?  If you are doing an all-in-one you can always break it into pieces later, you don’t want to have something so unwieldy that it is never looked at.

A great way to start is to create a list of different activities that happen in your nonprofit every week:

  • How is the mail opened?
  • When are deposits made?
  • How is payroll done?
  • Who is making sure our reports are filed?
  • Who approves the bills to be paid?

After five minutes of brainstorming you and your colleagues can have the beginnings of a manual.  It does not have to be fancy, even a simple bulleted list will do the job.

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Posted in Nonprofit Accounting, Policies and Procedures

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