Great Questions Asked by Great Nonprofit Managers

How well do your managers ask questions? Some might not even give any weight to this or consider it a skill. You may not even see “question asking” on any list of managerial expectations. However, asking the right questions, and the tough questions, is an effective part of a manager’s job which implies it may require more attention.

Being a manager isn’t easy. Managers have finite resources and growing task lists. They must handle people and budgets with equal finesse, and in a nonprofit organization, also manage public perception. More importantly, they must be willing to ask the hard questions and to listen and learn from the answer they get as they explore ways in which to enhance and build their organization.

Asking the Hard Questions

The difficult questions are the ones whose answers may yield an unpleasant reality for the asker. In other words, you may not like what you hear! When it comes to nonprofit organizations, these three questions are at the top of the list of the hard questions that must be asked for organizations to ensure they’re doing the best they can to fulfill their mission.

1. Am I doing my job well? Followed by, are we doing our jobs well?

Your “job” at a nonprofit is more than the list of things you are responsible for. It’s also your job to help the organization maintain and achieve its mission, to build public perception and awareness, and to help keep a positive perception in the public’s eye. It’s not an easy task. Your responsibilities in this mix may be weighted more heavily towards one area or another depending on your role in an organization. But you still need to ask if you are doing your job.

Reviewing organization-wide goals and plans and assessing how well you are achieving key performance indicators can help you answer this question.

2. Are we adapting to changing circumstances?

As the proverb goes, “change is the only constant in life.” Situations, personnel, and other facts of nonprofit life can change over time. Organizations that can grow, adapt, and change are ones that thrive.

Look around your organization. How well have you adapted to changing circumstances? If your nonprofit began with one specific task in mind, have you been able to adapt to meet new challenges?

Examine systems, technology, personnel, geography, and other factors. Each area influences how well your nonprofit can do its job. Those that change with the times are those that can continue to grow, prospect, and help others.

3. How well are we using our resources?

The push within most nonprofits is to find ever-increasing sources of donations and funding to fuel growth. Looking at how well you are using your current resources isn’t easy. It can be troubling to realize that you’ve overspent on a marketing campaign or haven’t invested other resources wisely. Yet it’s only by asking these questions and facing the truth that you can find better ways to use existing resources.

Resources aren’t limited to funds, either. They can also refer to personnel. It’s a good idea to look at your team and make sure that you are allowing individuals to work to their strengths. Place them in positions where their unique talents can help the organization thrive. Outsourcing tasks like audit prep or nonprofit accounting can free your team up to do the work they were hired to do. Make sure that you are using people as well as financial resources in the best possible way.

Practice, Practice, Practice

Asking questions is a skill and can be improved with focus and practice. Managers are in place to find ways the organization can function more effectively. The best way to determine this is to ask questions about the people, process and systems being used. Getting curious about why things are done a certain way and if there’s a better approach only makes for a stronger manager, thought process and organization. Asking questions in a way that does not make others defensive is a great skill to hone in on too. As you practice this skill, and focus on getting better in this area not only improves your management style, it sets an example for others to learn and grow too.

 

Nonprofit Financial Management and the New DOL Overtime Rules

If you are responsible for nonprofit financial management, it is important to understand the new DOL overtime rules. These rules will be in effect starting December 1, 2016, and will impact both for-profit and nonprofit businesses alike.

What Is the New DOL Overtime Rule?

The new DOL overtime rule resets the threshold for who should be paid overtime and when overtime pay takes effect. The revised Fair Labor Standards Act (FLSA) increases the salary threshold for white-collar workers. The threshold for exempt employees has increased from $455 to $913 per week. That is about $23,660 to $47,476 per year, on average.

The only exemptions from paying overtime are for executive, administrative and professional positions making $47,476 or more per year. The annual salary must meet or exceed $47,476 in order to qualify as exempt from overtime pay.

The threshold for so-called highly compensated employees has also been raised. These employees earn between $100,000 and $134,004 per year and perform non-manual labor. They must supervise two or more employees. These employees are now covered under overtime rules as long as their salary does not exceed the upper threshold limit.

Register for this Webinar Now: The Benefits of Integrated Project Accounting and Financial Management. 

Both the standard salary and HCE annual compensation limits will be updated again in three years.

Why Does this Matter for Nonprofit Financial Management?

The new DOL rules matter a great deal for nonprofit financial management. You may be required to adhere to it if you conduct business transactions exceeding $500,000 per year (excluding membership fees, grants or gifts).

Individuals may be covered under the revised law if they produce goods or services for interstate commerce and make amounts within the threshold limits. An example may be a nonprofit employee who regularly travels to other states for business purposes. You may need to review each situation on a case-by-case basis and make decisions based on the preponderance of activities that adhere to the rules. Err on the side of caution and compliance with the rules if you are unsure in a given situation.

Consider the implications of overtime on your payroll budget. Depending on how many employees are now covered under the revised DOL guidelines, you may now be required to pay overtime for a considerable number of people.

You may wish to revise schedules and limit overtime, depending on your needs. Weigh the pros and cons of hiring new employees or temps against the need for overtime.

There are several options to navigate these new salary rules. The options include:

  • Raise salaries: If you have employees who meet the ‘duty qualifications’ and have salaries near the $47,476 threshold, raising their salary would exempt them from the overtime requirement.
  • Pay overtime: Organizations should pay overtime salary to workers exceeding the 40-hour work week and who meet the requirements.
  • Redistribute workloads: Examine employee duties and hours, and redistribute tasks if necessary to avoid overtime.
  • Require overtime approvals: Occasional overtime payment may not be a problem, but you may wish to approve overtime requests to control your budget and employee workloads. Employees may not be aware that you are able to redistribute their workload.

The DOL leaves it up to the discretion of the organization or employer how they wish to address the changes. They neither endorse nor recommend a specific approach, which does give you some flexibility in how you address it within your organization.

Payroll and salaries account for a large portion of any organization’s budget. Nonprofit financial management includes the ability to balance budgets and avoid excess costs. By carefully adhering to the new regulation and understanding its impacts upon your organization, you can maintain a balanced budget that allows you to continue funding your mission.

Financial Advice and Assistance for Nonprofit Organizations

Beck & Company Certified Public Accounts and Business Advisors specializes in nonprofit financial management and issues pertaining to the world of nonprofits. We have extensive experience helping nonprofits of all sizes achieve their mission without sacrificing margin. Contact us for more information.

Add Processes to Improve Nonprofit Operational Efficiencies

Nonprofit Financial Management for Improved Performance by Adding Process Roadmaps

How many times have you started on a project or a task only to have that sense of déjà vu? Perhaps you had to perform that task last year, or a similar task last month. Unless you documented how you went about performing this task, however, it’s unlikely that you’ll remember the exact steps. That leads to duplicate efforts and re-creating the same task over and over again. In other words, you end up reinventing the wheel.

Many nonprofits fall into this trap simply because they are under-staffed. Their current staff is busy completing their assigned task lists, thinking ahead to next month, serving constituents, and doing all of the myriad tasks it takes to keep a healthy nonprofit organization humming along. It can be difficult to carve out time to draft a process roadmap, and still even more difficult to develop a plan to store such roadmaps and transmit them to others during the employee onboarding process. Still, without such roadmaps in place, valuable time is wasted. Nonprofit financial management can improve operational efficiencies by creating a process roadmap.

What Is a Process Roadmap?

Roadmaps are going the way of the telephone book, but they still provide a good analogy for documents around the office. A process roadmap maps out the path from start to finish that you take in order to complete a task. It includes vital information such as who performs which task in the process, what resources may be needed, and when the task should be completed.

Such a document need not be lengthy or cumbersome. In fact, the simpler and easier it is to read and understand, the better. Some companies require process documents to be one page or less to ensure they are as simple as can be.

Once a process is documented, it can then be replicated by anyone in the organization or delegated to someone outside of the organization. It is a great time saver after the initial time is invested into creating the document.

Uses of Process Maps for Nonprofit Financial Management

Let’s take a look at two common tasks nonprofits face and how process roadmaps can help:

  1. Annual charity event: Many nonprofits hold annual fund-raising events such as golf tournaments, sales, open houses, and the like. These events are frequently process-driven and require that multiple people pitch in and ready things for the date of the event. The date is usually set far in advance, so that a timeline can be easily mapped out from the event date back to the first tasks in the process, such as securing the venue. When a process map is in place for an annual event, it can be delegated to multiple staff members, volunteers, or outsourced partners.
  2. Audits: An annual financial audit is another event that can be transformed with a basic process in place and mapped out. You know when the audit will take place, and which documents must be gathered for the auditors. Specific resources may need to be earmarked for the auditing process, such as conference rooms reserved, personnel available, files organized and so on. Once a process is mapped and in place, the audit can go smoothly each year if the process is followed.

Organizing Your Processes

The most efficient way to organize processes is to create a template. The template can include:

  1. Name of the process
  2. Date when the draft was created
  3. A brief explanation of the process
  4. Goals and outcomes
  5. Timeline and deadlines
  6. Materials or other things needed
  7. Step by step instructions, tagged with the role assigned to each step.
  8. List of resources

A shared network drive or cloud-based system such as Google Docs, free to use with a standard (and free) Google account, makes it easy to organize all of your processes and provide access to staff at any given time.

Include Training

Lastly, be sure to include some basic training once the processes are in place. A process can only be used if it’s efficient and if people are aware it exists. Training familiarizes everyone with the steps in the process and provides a valuable opportunity for feedback to adjust the process.

Having your most important projects and events mapped out using a process roadmap saves you a great deal of time and effort. It enables you to transfer knowledge to new employees or volunteers and to smoothly and successfully navigate the path yet again. It is a great tool for organizational efficiency.

Beck & Company

Beck & Company is an independent certified public accounting firm located in Washington, D.C. Founded in 1987, we specialize in the world of nonprofit financial management, helping you to navigate the complex world of finance and accounting. Our services are always personalized, and cost-effective for your institution. We welcome your inquiry or call.  Contact us today or call 703-834-0776 x 8001.

Nonprofit Financial Management Tips [Free Webinar]

Why Nonprofits Need to Learn More About ASC 606 and IRFS 15

Nonprofit financial management includes keeping abreast of FASB changes, and examining your accounting methods to ensure they coincide with the latest recommendations. In May 2014, FASB issued Topic 606: Revenue from Contracts with Customers. In it, plans were unveiled to require all entities, both public and private, to change how they accounted for revenues. Revenues were to be recognized when the entity satisfied the performance obligation with the customer. This usually means that when goods or services are transferred to the customer, the revenue can be recognized.

While much of the work of a nonprofit doesn’t fall under the new ruling, some of it might, which is why you should pay attention to the changes and evaluate your revenues accordingly. Activities typical of a nonprofit that might be considered under the new ruling include membership fees, conferences and seminars, subscriptions, tuition, products and services, advertising, licensing, sponsorships, royalty agreements, and federal and state grants and contracts.

Nonprofits seeking to learn more about the law should sign up for the forthcoming seminar from Intacct: The Impacts of ASC 606 on Subscription Businesses. This webinar will take place on Thursday, November 3rd at 11 a.m. PST/ 2 p.m. EST.

If you are currently using spreadsheets to manage your accounting, it will be almost impossible to comply with this law and IRFS 15 compliance, the effects of which will begin in December 2016.

The webinar is led by Tony Sondhi, a member of FASB’s Emerging Issues Task Force and an expert on revenue recognition. This is a unique opportunity not only to learn first-hand about 606 and IRFS 15 compliance but to learn from a well-known expert and member of the FASB task force.

At this seminar, you will learn more about the changes begun by these rulings, as well as information on how you can interpret and implement them for your organization. You will also learn more about the financial risks for subscription businesses. Many membership organizations rely upon a subscription model, which is directly impacted by these rulings.

According to the FASB document, “The core principle is that an entity should recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.”

The AICPA has put together a good paper that outlines the requirements and delineates the steps to take under each. There are five basic steps to comply with the new regulation:

  1. Identify the contract with the customer.
  2. Identify the performance obligation within the contract.
  3. Determine the transaction price.
  4. Allocate the transaction price.
  5. Recognize the revenue when the entity satisfies the transaction.

Typically, step 5 occurs when goods or services are delivered satisfactorily to the customer.

The goal, of course, is to protect customers and to make it simpler and clearer for entities to recognize revenues. Many organizations are already using similar protocols, and for those organizations, making adjustments to satisfy the requirements should be simply. For others, it may take a deeper look at the way they are recognizing revenues, and shifting some of their processes.

Do You Need to Make Adjustments?

All nonprofits should assess their accounting practices and see how their revenue streams compare to the new rules. Organizations should also consider what, if any, impact this may have on their financial statements. It is a wise move as part of nonprofit financial management.

Keeping Abreast of FASB Changes

We have previously shared details of the proposed FASB changes taking effect in 2016. Any changes that impact your business should be noted and researched as soon as possible. Nonprofits, like other business entities, must comply with all requirements. Failing to do so can put your nonprofit at risk for losing its nonprofit status. You also risk falling behind in compliance issues, an important part of accurate nonprofit financial management.

More seminars are available to provide updates on various issues pertaining to accounting and nonprofit accounting and finance. You may view our complete list online.

Beck & Company

Beck & Company is an independent certified public accounting firm located in Washington, D.C. Founded in 1987, we specialize in the world of nonprofit institutions, helping them to navigate the complex world of finance and accounting. Our services are always personalized, and cost-effective for your institution. We welcome your inquiry or call.  Contact us today or call 703-834-0776 x 8001.

Providing Exceptional Customer Service in a Nonprofit Environment

Providing customer service in a nonprofit environment takes different forms depending on the type of work you’re doing. A homeless shelter that provides meals, beds, and hot showers on a daily basis may find that simply greeting each guest warmly and making sure the soap dispensers are filled is making great strides on their customer service. An educational nonprofit that sells books and teaching aids may find that fulfilling orders quickly boosts their service. To improve customer service in a nonprofit environment, you must first decide what good service means to your organization, determine ways to measure it, and then implement practices to improve it.

Determine Service Baselines

The first thing to do is to determine what constitutes the absolute minimum level of good service you can provide to your constituents. Here’s a simple checklist to help you take that first step.

  • At what point do members of your organization interface with the public?
  • Is it by phone, in person, social media, or at events?
  • Who meets with the public? Is it one person, a team, or everyone?
  • What is the interaction like?
  • What impression do you want people to get of your organization?
  • Do you give staff and volunteers any type of training in customer service currently? If so, what is that training?
  • Do you have any parameters for how quickly phone calls must be returned or who gets to respond to inquiries on social media? If so, how is this information shared with everyone?

Next, think about your desired outcomes. If your desired outcomes don’t match the current situation, what changes can you implement to help you achieve your outcomes?

Measuring Service

Organizations typically apply both qualitative and quantitative measurements to service. Qualitative sounds simple enough; you can send out surveys, save emails from constituents thanking someone for good service, or measure it in terms of donor and patron satisfaction.

Quantitative means measuring, and measuring involves numbers and data. You need a starting point, an objective, and a way to measure the distance between the two. When it comes to customer service, think about measuring the time elapsed between returning calls, the time to deliver service, and similar metrics.

Not everything can—or should—be measured. Make logical decisions based on what’s most important to your organization’s service level. Don’t force-fit anything into quantifiable metrics that doesn’t make sense to track.

Improving Service

Once you know what you have and what you’d like to see, it’s time to put into place some best practices for improving service. In a nonprofit environment, that can be slightly more challenging than in a for-profit environment if you’re dealing with volunteers as well as paid staff, but it can be done.

  • Set expectations: Set the bar high for customer service, and when new volunteers or staff are trained, make your expectations clear.
  • Establish written policies: Written service policies also make expectations clear and provide common standards by which service can be measured.
  • Reward right actions: When you notice people on your team giving great service, reward them by giving them praise, thanking them, or otherwise pointing attention to “right” behaviors.
  • Model what you’d like to see: Be sure that your senior level staff demonstrate the highest standards of behavior, too. It’s important that managers act as role models for volunteers and junior staff. People practice what they see, and when they see you “walk the walk,” they’ll know that good customer service is important to your organization.

Good customer service is important whether you run a nonprofit or a for-profit organization. When it comes to helping others or fulfilling your organization’s mission, your interactions with the public, and the positive feelings these interactions engender with the public, are what will lead people to think favorably of your organization and perhaps donate to it. It’s all part of running a great nonprofit organization!

Beck & Company

Beck & Company offers certified public accounting and business advice, with an emphasis on the world of nonprofit organizations. We understand the nuances and challenges that nonprofits face and can help you with accounting, business advice, and more. Contact us today or call 703-834-0776 ext. 8001.