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Building a better nonprofit: Rules for restructuring
There are many reasons why a 501(c) tax-exempt organization might consider restructuring. For example, a financially struggling nonprofit might decide to join forces with another organization to cut costs and share resources. Or a nonprofit might decide to change its state of organization. Such changes generally qualify for a simplified restructuring process. However, it’s important…
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Board committees can help members make time for critical work
For many not-for-profit organizations, maintaining a full and active board of directors is challenging. If your board holds frequent meetings, has high attendance expectations and requires members to do considerable “homework,” you may have trouble recruiting and retaining people. Qualified individuals generally are busy with work, family and other activities and may not have spare…
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Are your volunteers risking legal and tax liability?
Comprehensive risk management is one of the primary responsibilities of not-for-profit leaders. You probably regularly consider and act to mitigate risk to your facilities and assets and your staffers and clients. What about your volunteers? Even though the federal Volunteer Protection Act of 1997 provides some protection, volunteers face the real risk of being sued…
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Plan now to reimburse staffers, board members and volunteers
Even if your not-for-profit organization rarely needs to reimburse staffers, board members or volunteers, reimbursement requests almost certainly will occasionally appear. At that point, will you know how to pay stakeholders back for expenses related to your nonprofit’s operations? If you have a formal reimbursement policy, you will. Plus, you’ll be able to direct individuals…
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Making the most of your nonprofit’s social media accounts
When’s the last time you evaluated your not-for-profit’s social media strategy? Are you using the right platforms in the most effective way, given your mission, audience and staffing resources? Do you have controls to protect your nonprofit from reputation-damaging content? These are important questions — and it’s critical you review them regularly. At the very…
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3 tips for making the financial statement auditing process smoother
Not-for-profits aren’t required to produce audited financial statements. But audited statements are more likely to reassure big donors and grant makers about your financial stability and generally will be required if your organization applies for a bank loan. When you hire a CPA to audit your statements, the auditor is responsible for expressing an opinion…
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Encouraging charitable donors to include you in their estate plans
Even if current donations are your not-for-profit’s bread and butter, you can’t afford to neglect planned, legacy or deferred gifts. These gifts, generally made through wills and living trusts, often are much larger. Your employees don’t need to be directly involved when donors establish gifts through their estate plans. But your development staff should know…
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Consider these 2 issues before searching for new staffers
Despite many predictions to the contrary, U.S. employers have continued to add workers to their payrolls and the unemployment rate has remained low — at 3.7% as of November 2023, according to the Bureau of Labor Statistics. Is your not-for-profit among the employers that need fresh staffers? The new year is a good time to start looking,…
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Using the personal touch for last-minute fundraising
As 2023 hurtles toward Dec. 31, your not-for-profit probably is fully engrossed in last-minute fundraising. After all, taxpayers who itemize will be able to deduct qualified charitable contributions on their 2023 tax returns. As you make last-minute pitches, don’t forget to deploy the personal touch. Many studies have shown that people are more willing to donate if…
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When are sponsorship and advertising payments subject to tax?
Sponsorship and advertising dollars can provide a real boost to your not-for-profit organization’s income. However, if sponsors or advertisers receive a “substantial benefit” or if providing benefits isn’t a related business activity, you may owe unrelated business income tax (UBIT) on the payments. Here’s a quick look at what is and isn’t taxable. UBIT typically…
