Is your not-for-profit the same organization it was three years ago? Are your stakeholders the same now as then? Is your community and its support of your not-for-profit the same?
As your not-for-profit strives to use its resources as effectively as possible, you might at some point consider outsourcing the functions that fall under your accounting and financial umbrella. But wait: You’ll need to weigh the pros and cons before making this important decision.
Is your organization pursuing planned gifts? It should be. Research suggests that the average planned gift in the United States falls between $35,000 and $70,000 — and the amount may increase with more Baby Boomers moving into retirement.
Most tax-exempt organizations must file Form 990 with the IRS. This form, titled Return of Organization Exempt from Income Tax, has significant implications for not-for-profit organizations. The compensation of officers, directors, trustees, key employees and others in tax-exempt organizations has always been scrutinized by the IRS. That is why compensation reporting is so important on Form 990.
Our affiliate, ML&R Wealth Management, provides investment advisory and management services to institutions and nonprofits in Central Texas.
Does your organization have a succession plan in place? And, if it does, is it well documented? Some not-for-profits delay detailed succession planning, thinking of it as a project they’ll get to “someday.” But that’s a mistake.
Rules known as “intermediate sanctions” allow the IRS to assess penalties against not-for-profit executives who receive excess compensation — and the board members who have approved it. Do you and your board know what’s considered excess compensation and what’s viewed as a conflict of interest during the compensation-setting process?
If your not-for-profit organization expects its board members to play a fundraising role, you probably already know how difficult it can be to motivate them. They’re busy people, and even when they have excellent connections, they’re not always comfortable asking those in their network for money — however noble the cause. Fortunately, there are ways you can help board members overcome their reservations.
So you think investment policies are only for not-for-profits with millions to invest? Not true. If your organization holds funds in reserve — for example, to cover emergencies or meet long-term goals — it’s prudent to have investment policies. Such policies will help ensure that you manage reserve funds responsibly according to their purpose and take steps to minimize investment risk.