Author: beckadmin

Is It Time for Nonprofits to Accept Cryptocurrencies Like Bitcoin for Donation and Payments?

Traditional nonprofit financial management may look askance at Bitcoin, Ethereum, LiteCoin, Dash and other cryptocurrencies, but love them or hate them, crypto is here to stay. It provides a secure alternative to traditional currency and can be tracked and monitored in a public, transparent way.

What Is Cryptocurrency?

Cryptocurrency began in 2009 with the release of a white paper that outlined Bitcoin, the very first cryptocurrency. Bitcoin is now just one of hundreds, perhaps thousands, of blockchain-based ‘coins’ that transmit value through proof of work, proof of stake, or other forms of blockchain mining.

Blockchain technology itself is more than cryptocurrency. Blockchain is a continually growing record that consists of blocks of code. Each block, once confirmed, is permanent and unalterable. It is a decentralized record in that the code that powers a blockchain is held on multiple computers worldwide. Most blockchains are public and open for verification and build-outs. One of the most famous blockchains aside from the one that powers Bitcoin is Ethereum. The Ethereum blockchain is used to build something called smart contracts, which are contracts that eliminate the need for third party verification.

If you think this is all just a passing fad, think again. While the run up of Bitcoin prices is reminiscent of other financial bubbles in the past such as the real estate or internet stock bubble, blockchain technology is now being used to test recording real estate deeds and records in Sweden, secure email communications through a company called Envilope, and enable secure, transparent records in many areas including healthcare, real estate, and more.

Cryptocurrencies and Nonprofits: Expanding Donations

Nonprofits can expand their donation avenues by accepting Bitcoin and other cryptocurrencies. To do so, you’ll need to open an account on a recognized cryptocurrency exchange. Since there is no official registration of exchanges akin to the stock exchange, you will need to do additional due diligence to find some of the better-known exchanges.

Legitimate cryptocurrency exchanges have a KYC or know your customer process in place to verify identification. Expect it to take 7 to 10 days to complete the KYC process.

Once your nonprofit is registered with an exchange, it has a wallet address. Wallet addresses are the public code, usually in the form of a QR code graphic or a long string of letters and numbers, that funds are transferred into. Once transferred, the transfer cannot be reversed. The exchange will deduct a percentage of the overall fee once the currency is in your virtual wallet. You can then exchange cryptocurrencies into dollars or other currencies and transfer that amount into your bank account.

For nonprofit financial management, be sure to keep accurate track of all financial transactions on cryptocurrency exchanges. Taxation laws and reporting laws around cryptocurrencies are constantly changing and evolving, and you may need your records handy to comply with the law when it comes time to reporting income. As of 2014, the IRS considered cryptocurrencies as property for tax purposes, but  recent statements make it sound as if they are leaning towards regulating it like a security. Clear guidance is still lacking.

Using Cryptocurrency as a Marketing Tactic

Lastly, consider targeting specific individuals or groups who may wish to donate using Bitcoin. Fortunes have been made over the past decade thanks to the stratospheric rise in BTC value and other currency values. Create and build a list of cryptocurrency leaders and solicit donations through direct, personal outreach.

Millennials and Generation Y and Z individuals are all more comfortable using cryptocurrencies than their older counterparts. These young people may already own Bitcoin or other coins and wish to use them for donations. If your nonprofit accepts cryptocurrencies as donations, you can send specific promotions to this demographic and include that QR code to make donating easy and fast for them.

Accepting cryptocurrency as a donation may seem far-fetched but many nonprofits are experiencing the benefits of this new technology-facilitated money. It’s secure, irreversible from the donor’s side, and fairly easy to set up to accept. Why not give it a try?

Beck & Company

Since 1987, we have helped many nonprofits in the Washington D.C. area and along the Eastern seaboard with their accounting and financial management needs. We provide audit, tax, accounting, and consulting service that addresses all aspects of a small to mid-sized nonprofit organization’s business. Contact us or call 703-834-0776 x8001.

Cultural Intelligence, the New Frontier in Nonprofit Financial Management

First there was intelligence quotient (IQ) then emotional intelligence. Now, there’s cultural intelligence. Nonprofit financial management success must include all three in today’s connected world to be successful.

Different Types of Intelligence

The original IQ tests or intelligence quotient was derived as a test for army soldiers in the early 20th century. The same pioneers who brought you IQ tests developed things like the SAT test and other aptitude tests. These early data scientists believed that nearly every personal characteristic could be measured and quantified.

Peter Salovey and John D. Mayer coined the term ‘emotional intelligence’ in 1990 to describe an individual’s ability to  “monitor one’s own and others’ feelings and emotions, to discriminate among them, and to use this information to guide one’s thinking and action”.  David Goleman, a writer for The New York Times, popularized their work in a book released in the 1990s, and the term became common parlance or shorthand for the ability to read and utilize emotional information in conversation.

Today, add to that a new term: cultural intelligence. Cultural intelligence refers to an individual’s ability to recognize, interact with, and respond appropriately to people of other cultures.

In the world of nonprofit financial management, cultural intelligence is rapidly becoming as important as emotional intelligence. While intellectual giftedness and intelligence is widely recognized as a desirable attribute, without emotional and cultural intelligence, those with high IQs tend to be like Sheldon Cooper on the television show “The Big Bang Theory” – smart, able to do their work easily, but difficult to live, work, and interact with on a daily basis without wanting to tear your hair out.

Examples and Benefits of Cultural Intelligence

Every one of us hails from a unique culture. That culture may be white, suburban, and middle class, Jewish and upper class, or Chinese immigrant. Each culture brings with it a series of cultural norms in dress, behavior and attitude that when understood and respected, can serve as an icebreaker in the business world.

Take the example of two job candidates for a position in nonprofit financial management. Both candidates are white women who hail from middle class backgrounds. But Candidate A has traveled widely during and after her college years, spending time working on volunteer projects in Haiti, the Dominican Republic, and Thailand. Candidate B does not have that richness of cultural exposure or interaction. Which candidate is better for nonprofit financial management in an organization that interacts on a global basis?

If your staff consists primarily of people from a homogenous culture and interacts only with people of the same culture,  Candidate B may be perfectly suitable. Candidate B, to be fair, may have a deep and abiding respect and admiration for other cultures, too. But Candidate A has actually lived, worked, and spent time in other cultures, immersing herself in their traditions and norms. She may more easily fit in a meeting with people from Caribbean, Central American and Asian cultures.

All people can learn to be aware of other cultures and respect their norms. Most people know, for example, that in Jewish culture, men wear yarmulkes inside the synagogue and that Amish people prefer not to have their pictures taken. Respect for each culture means wearing appropriate clothing when entering a house of worship and adhering to the ‘no picture’ rule if you happen to drive by an Amish barn raising on your next trip through Pennsylvania, Indiana, New York or Virginia Amish country.

Practical Application of Cultural Intelligence

Respect is fine and a welcome attribute. But what is the practical application of cultural intelligence?

In some instances, it creates bonds of respect between individuals. Those who demonstrate respect for other cultures, such as dressing conservatively when visiting Middle Eastern countries or not making eye contact in an Asian business meeting, may bridge the gap more easily between colleagues. This creates common ground, shared understanding, and the basis of trust for future business dealings.

Inside your nonprofit organization, you are likely to encounter people from many, diverse cultures. We live in a world where cultural identity and embracement is the norm rather than the exception; we live and work in the United States in an immigrant culture, one that is more likely to find a place for those who dress, look, or behave differently than the standard culture.

Those who possess cultural intelligence will be far better equipped to make business connections and handle themselves gracefully across all cultures. Combine that with high IQ and strong EQ, and you’ve got a winning combination for success.

Beck & Company

Since 1987, we have helped many nonprofits in the Washington D.C. area and along the Eastern seaboard with their accounting and financial management needs. We provide audit, tax, accounting, and consulting service that addresses all aspects of a small to mid-sized nonprofit organization’s business. Contact us or call 703-834-0776 x8001.

Federal Tax Withholding Update

Beck & Company provides accounting and tax service for nonprofits, and as part of our services, we offer informative updates on IRS tax regulations. Updates from the IRS this year include a new W-4 form and a new withholding calculator. It is important for you to investigate these and other IRS updates and inform your nonprofit employees so that they can make informed judgments on their personal withholdings.

Withholding Changes and the New Calculator

The Tax Cuts and Jobs Act made significant changes to tax law including increasing standard deductions, increasing the child tax credit limit, removing personal exemptions, limiting or discontinuing certain deductions and changing the tax rates and brackets.

How do you know if you should double check your withholding? Anytime you have a major life change, such as marriage, divorce, widowhood, new children or similar changes in marital or family status, it is time for a withholding checkup.

Others who should check their withholding amounts by using the new IRS withholding calculator include:

  • Individuals with two or more jobs at the same time or who only work for part of the year.
  • Individuals with children who claim credits such as the Child Tax Credit.
  • Individuals who itemized deductions in 2017.
  • Individuals with high incomes and more complex tax returns.
  • Anyone who works more than one job.

There are certain instances when the withholding calculator may not be adequate to help you assess your taxes. In this case, you should speak with a tax advisor. Situations that may be too complex for the withholding calculator include people with capital gains, those who owe an alternative minimum tax, and self-employed people.

The new withholding calculator asks people to estimate how much they will make in 2018. It also asks questions about other items that may affect taxes. It’s easier to use if you have a recent pay stub handy. The information on your recent pay stub helps you determine how much you are currently withholding and any potential changes you may need to make in the current year.

Of course, the new IRS withholding calculator is only as accurate as the information that you enter. If you enter incorrect information, you won’t get accurate results. Use your best judgment and when in doubt, speak with your tax advisor or an accountant.

W4 Forms

IRS form W-4 helps your employer to withhold the proper amount of taxes from your pay. Nonprofits and those working for nonprofits must withhold and pay proper individual and employment taxes. Being a “not for profit” or having “tax exempt” status does not mean that employees are tax exempt or that an organization is exempt from reporting proper taxes. If a nonprofit has such a designation, it means that the organization does not to pay certain taxes. The people working for the nonprofit must still pay applicable employment taxes.

What to Do if Withhold Information Has Changed

If your withholding information has changed, it is time to update your W-4 information. Human resources managers should be ready to help employees update W-4 information and assist them with any questions they may have regarding the new tax law changes, withholding, and other payroll and personnel requests.

Anytime changes affect income taxes, it’s time to check your withholding. Checking your W4 now may save you from the inconvenience of under or over-paying employment taxes.

Beck & Company

Since 1987, we have helped many nonprofits in the Washington D.C. area and along the Eastern seaboard with their accounting and financial management needs. We provide audit, tax, accounting, and consulting service that addresses all aspects of a small to mid-sized nonprofit organization’s business. Contact us or call 703-834-0776 x8001.

Washington DC Nonprofit Advisor Recommends GDPR Privacy and Data Checkup

As Washington DC nonprofit advisors, we try to help all of our clients nationwide keep up to date with changes in regulations throughout the nonprofit world. One such regulation is GDPR. This European regulation takes effect in May 2018 and will update data and privacy regulations throughout the European Union, the most sweeping changes since 1995.

Although you may be an American-based nonprofit organization, no one is exempt from GDPR. That’s because the rules apply not just to companies and organizations located within the EU but also to any business entity – for profit or not for profit – that interacts with EU citizens. In today’s global, internet-based world, that opens the door for anyone with a website to fall under GDPR’s requirements.

What, you may wonder, would happen if you just ignored it? After all, you’re not an EU citizen, and your organization is licensed and registered in the United States…well, the penalty for not adhering to GDPR is severe ranging from a warning to fines that could range in the six or seven figures.

GDPR looks confusing on the surface and it is indeed complex. Washington DC nonprofit advisors to the rescue! Let’s break it down into the important parts nonprofits need to know, understand, and act upon to comply.

Data Collection, Storage, and Privacy

Most of the GDPR regulations focus on personal data collection, privacy, and storage. Data breaches must be reported within a 72-hour window and people must give explicit consent to data collection. Data that falls under GDPR collection rules includes:

  • Name
  • Photos
  • Email addresses
  • Social media posts
  • Medical information
  • Bank details
  • IP address

As an organization that may interact with EU citizens, you are required to:

  • Obtain consent that is “freely given, specific, informed, and unambiguous” prior to collection of personal information from a data subject
  • Restrict data collection to specific, explicit, and legitimate purposes
  • Limit data retention to requirements for business purposes
  • Provide data processing transparency
  • Maintain data security, confidentiality, and integrity
  • Adhere to breach notification requirements
  • Designate a Data Protection Officer
  • Perform a data protection impact assessment

People whose data you have collected have the right to:

  • Access their data
  • Object to the use of their data
  • Be forgotten (have their data erased)
  • Rectify their data
  • Receive their data and transmit it to another controller

Tips to Help Nonprofits Comply with GDPR

All nonprofit organizations should take GDPR seriously. Although you may not purposely target EU citizens in your marketing efforts, the regulations are so all-encompassing that it is better to be ‘safe rather than sorry’ and take care to adhere to GDPR as best as you can. It’s also just basic smart marketing and good best practices for data security, privacy and control.

You can take the following steps to help meet GDPR regulations:

  1. Identify all interactions and potential interactions with EU citizens. This may include website contacts, email signups, and Eu groups with whom you interact.
  2. Review all places where you collect data. This includes website data, analytics, and even plugins that may collect data from visitors on your website.
  3. Adjust and revise the terms and conditions on your website. Don’t have terms, conditions and privacy policies posted? Now’s the time to add them. Make the navigation to view them prominent and top or at most, second-level, so that anyone seeking them can find them easily.
  4. Review emergency plans and action plans to handle data breaches. Again, if you don’t have such plans in place, now is the time to create them. Data breaches aren’t a question of “if” but “when”; cybercriminals love to target nonprofits and view them as easy targets. Lock the barn door now before the proverbial horse escapes.
  5. Send a permission-reminder email to your email marketing list. This is a notification that you are updating permission and asking once again for explicit permission to send promotional materials to your contact list.

These are small, simple steps to take to comply with the spirit of GDPR. Even if you do not conduct business in the EU and have no intention of doing so, GDPR should be considered best practices for permission-based communications moving forward.

Beck & Company, Washington DC Nonprofit Advisor

Beck & Company are Washington DC nonprofit advisors and consultants. Since 1987, we have helped many nonprofits in the Washington D.C. area and along the Eastern seaboard with their accounting and financial management needs. We provide audit, tax, accounting, and consulting service that addresses all aspects of a small to mid-sized nonprofit organization’s business. Contact us or call 703-834-0776 x8001.