Nonprofit Accounting Blog – Page 15

Preparing Your Nonprofit for Tax Season

The onset of Tax Season often creates stress and worry, particularly for nonprofit board members and responsible parties. The gathering of documentation, sorting through expenses and receipts, understanding tax laws and changes, etc. are reason enough for this anxiety. Particularly if there is disorganization or lackluster record keeping.

We understand that filing and preparing to file taxes can be challenging; that is why we’ve provided several tips to ease the burden of tax preparation and ensure that you make the April 15th deadline. Keep the following in mind as you prepare for tax season (and remember to practice your deep breathing):

Always separate personal and organizational expenses.
The Internal Revenue Service (IRS) keeps a close eye on personal expenses that could be claimed as organization expenses (such as using a vehicle for personal reasons). Protect yourself by maintaining separate bank accounts and credit cards for your expenses. Maintain good records to back up your claims. If the IRS does inquire about a particular expense, you will have the information you need to substantiate your claims.

Maintain good financial records year-round and research available deductions.
Proper record-keeping is crucial to ensuring that your taxes are filed accurately. Be diligent about maintaining your records all year so when it comes tax time, you have everything you need to file confidently. Make sure to save all essential paperwork that may be needed to back up deduction claims in the event of an audit. Remember that tax credits and deductions change each year, so be sure to stay up to date on the latest information.

Take advantage of the tax credits within the Affordable Care Act.
According to the Council of Nonprofits, your nonprofit organizations may be able to take advantage of the same tax credits as small business. This credit will cover up to 50% of the health premiums you pay to cover your employees.

Avoid common audit traps.
It’s important to know the red flags that may capture the IRS’ attention. The IRS commonly targets certain types of nonprofits for special scrutiny. In the past, these have included:

nonprofits that conduct gambling fundraisers
nonprofits engaged in joint ventures with for-profit companies
nonprofits that sponsor travel tours
credit counseling agencies
donor advised funds
hospitals
colleges and universities
community foundations
nonprofits engaging in political activities
student loan organizations, and
nonprofits that fail to file required IRS returns.

If your organization falls under one of these categories you will want to make sure that you have the evidence to back up your claims.

Here at Beck & Co. we understand that preparing your taxes can be daunting and overwhelming. In fact At Beck & Company we specialize in nonprofit accounting and auditing. If your organization could use some guidance in this area, let us help. We have a team of experienced accountants and CPA’s that can assist you in making sense of tax regulations and avoid common mistakes and audit traps. Contact us to learn more about these services and how we might be able to help.

Finish the Year Off Well with this EOY Checklist

2016 is quickly approaching which may have you feeling a little stressed about closing out the year. Understandably, the holiday season can interrupt workflow and make it difficult to fully focus on year end tasks. In order to simplify the process we have provided you with a year-end check list to ensure you begin 2016 on the right track.

Print yearly reports– From financial and general ledgers to payroll and accounts receivable/accounts payable, we recommend that you print these reports for financial reporting reasons. You will want to have a hard copy of your historical company information, especially if you get audited.
Print and finalize payroll forms- Tax returns should be filed and completed for the year that you are closing.
Back up all company data- You can save the backup on a CD or flash drive. Save the backup with a name you will recognize in the future. We recommend that you include the words “Year-end” and the year you are closing in the file name. Both the paper documents you printed and this electronic data backup are essential for future reference and future audits.
Plan strategically- The end of the year is a natural time to start re-evaluating your financial processes, procedures, and goals. Focus your efforts on maximizing your impact in the next year while minimizing your expenses.
Import your current budget, analyze it, and create a new one- Learn from this year’s mistakes and create an effective budget for the year to come.
Evaluate your financial records- While it is important to straighten out your financial records due to legalities, it is also important for properly managing your organization. Inaccurate financial records often results in poor decision making and missed opportunities, not to mention trouble from the government.
Update donor records- Make sure that your donor records are in order by the year-end because donors will be expecting their annual contribution statements at the beginning of the year.
Hold an end-of-year meeting- Have a year-end meeting to discuss the challenges of the past year and focus on the necessary improvements for the year to come. Prepare for your end-of-year meeting by creating the necessary financial reports.
Finalize payrolls- Make sure everything is in order to ensure your employees receive their W2s in a timely manner.

Here at Beck & Company we are here to help you in any way that we can. Contact us to see how we might be able to assist your nonprofit organization in finishing off the year well.

Anti-fraud Measures for Nonprofits

Unfortunately, no company, regardless of their mission is completely immune from the possibility of fraudulent activities. Fraud can take on a vast variety of shapes and sizes and is particularly rampant in today’s society. When fraud occurs, trust is compromised, and a timely and costly process of restoration is necessary. This is why it is so very important to have complete financial transparency along with a processes of accountability in place to reduce your risk.

Reducing Fraud’s Risk:

There are steps that you can take to reduce your companies risk for fraud. Implementing internal controls is a great first step to safeguarding your organization against fraudulent activities. It is important for management to first understand that the responsibility for identifying gaps that are putting you at risk for fraud lies first with them. This means that management should avoid becoming too complacent, relying on auditors to “catch” fraud if it occurs. This does not negate the need for an annual audit, it is still an important step for catching fraudulent activity that may have occurred. However, in most cases, an audit will be too late to prevent loss.

There are some important principles to keep in mind as you work to develop anti-fraud internal controls and policies for your organization:

Create and empower an audit team or committee who works independently of management. Empower them to bring in outside experts as they see fit in order to assist and advise them in their tasks. Aim to form a team with three to five members with at least one of them a financial expert. The other members can be comprised of individuals with financial and other skills that will help to provide the necessary perspective.
Create both internal and cultural controls that will ultimately become the core of your anti-fraud measures. These internal controls will act as a deterrent for most opportunities to hide fraud trails and will discourage most fraudsters. Tools such as access controls, segregation of duties, dual authorizations, cash policies, and security. Such controls will significantly decrease occupational fraud schemes.
Top down compliance. Ensure that management is modeling adherence to internal control policies and projects enthusiasm for them. This step can set the tone and create a culture of integrity. Such a culture will create ethics and empower employees to step in should they see fraudulent activities happening.
Provide a way for employees to report suspicious behaviors. Global fraud studies have shown that the most effective means of detecting fraudulent behavior is through tips. Tips have proven to be more effective than other means such as audits or surveillance. Consider a third-party hotline service.
Develop a response plan in case deterrence fails. In spite of everyone’s best efforts, fraud still can occur.

Although it is important is to respond quickly to fraud, the better plan is to avoid the situation in the first place. Of course it may be unrealistic to completely eliminate the risk of fraud. The executive team and management of your organization can take steps to minimize the risk by establishing an environment with strong cultural and internal controls, and developing a proactive fraud identification and response program.

Beck and Company’s Certified Public Accountants and Business Advisors offer auditing services that can provide you with an extensive examination of financial statements to give you a closer look at possible areas of fraud within your organization. We are passionate about helping nonprofits get their financial reporting in order so they can reduce their risk of fraud. Learn more about all of our nonprofit services in addition to the auditing services mentioned earlier. Contact us to let us know how we can help your organization with the financial services, internal audits, and other services to keep your finances in check and your organization to prevent fraud.

The Secret to Outcome Measures Success

Nonprofit organizations are finding it extremely helpful to be able to accurately show, with clarity and transparency their financial outcomes. Outcome measurements are generally used to communicate to investors and constituents the organization’s financial performances. Nonprofits are finding, particularly in today’s economy, that producing these reports can prove difficult, particularly without the proper tools. Conversely when tracked properly having these reports proves to be invaluable to the organization in order to ensure financial success and sustainable growth.

Why does it matter?

As your organization seeks to find financial support in today’s increasingly competitive environment, having an accurate display of your financial outcomes can play a key factor in winning grants and donations. And once those donors have chosen to invest in your nonprofit they will certainly want to see how their investment is being used to accomplish your organizational mission and goals. Gaining trust from your donors by reporting outcome measures will also increase their belief in you while building credibility amongst current and future investors and helping to increase multi-year financial gifts and grants.

Who’s looking?

There is increased demand for transparency and accountability amongst today’s nonprofits. Charity evaluators, not unlike for-profit financial analysts, are taking seriously their evaluations of your financial outcome reporting. This is a good thing as it creates the opportunity to solidify your reputation, becoming a trusted organization in your given field. This improved visibility can then result in a wider network of supporters.

Creating a framework for reporting.

Keep in mind that the main thing your evaluators are searching for is whether or not your organization is succeeding in accomplishing its core mission. Given that understanding, begin with a simple template headlining your objectives and then measuring results that directly link to that purpose. Ensure that your organizational structure is aimed at supporting your mission. Include progress markers, goals, and deadlines. Lastly, show supporting activities and include quantifiable measures.

Do not overcomplicate your reports with unnecessary metrics. Include clear and simple results that show the things that are most important to your organization.

Balanced Reporting

Outcome measurements will include all aspects of your organizations performance that show an impact. This includes performance, capacity, financial and/or sustainability. Neglecting to include non-financial information will prevent your donors and potential donors from truly understanding the success of your organization overall. Be sure to provide defined key indicators to create a complete picture to key stakeholders and constituents. This is a great way to use your website to show both internal and external constituents your organizations progress and accomplishments.

Helpful measurements to consider are:

Program efficiency—Show how you have used funds. A basic formula: Program efficiency = Total program services expenses ÷ total expenses

Revenue per member. In order to show the amount of revenue that is being generated from your membership, dues and/or program fees.

Fundraising metrics—what does it cost you to raise money?

Using the right tools:

Producing these reports can be easy, provided you have the right tools. Utilize software that can provide instant visibility and insights into your organization’s spending, allows you to manage programs and company mission. Here at Beck and Company we serve small and mid-sized organizations and individuals, providing audit, tax, accounting, and consulting service that address all aspects of your business with one goal in mind – exceeding your expectations. Contact us to learn more about finding the best solution to produce the reports and outcome measures that are right for you.

How Nonprofits Can Diversify Their Funds

Today, nonprofit organizations are looking at the future of their funding strategy and realizing that they may need to look beyond traditional types of funding. No longer can they rely solely on philanthropy to fund their organizations. The time has come to develop a sustainable funding strategy that will prepare them to thrive financially in the future using diversified funding methods.

Most likely your nonprofit will seek to expand its services in order to meet the current and expected demand. In order to successfully expand and maintain required funding you will need to remain credible and visible to the community, constituents, and potential funders. One way to maintain financial relevance is to diversify your funding streams. By doing so you will not only strengthen your financial viability but you will also expand your influence through new partnerships you may not have considered in the past.

Social finance is an approach to managing money which delivers a social dividend and an economic return, creating opportunities for new investors who want to support your initiatives because they feel they benefit society in some way.

Another financial strategy is Impact Investments. Impact investing refers to investments made into companies, organizations, and funds with the intention to generate a measurable, beneficial, social or environmental impact alongside a financial return. It is a form of socially responsible investing that serves as a guide for various investment strategies. Impact investing has great potential to tap into sums of private investment capital in conjunction with meeting felt needs that are considered global challenges.

Program Related Investments. The IRS defines those in which:

The primary purpose is to accomplish one or more of the foundation’s exempt purposes,
Production of income or appreciation of property is not a significant purpose, and
Influencing legislation or taking part in political campaigns on behalf of candidates is not a purpose.

Social Enterprise. Social enterprises are businesses that aim to tackle social problems, improve communities, people’s life chances, or the environment. They make their money from selling goods and services in the open market, but they reinvest their profits back into the business or the local community. Nonprofit organizations will take advantage of this strategy to earn income which is then reinvested to further their mission. In addition to raising funds through social enterprises this is a great way to raise awareness and support for your organization or mission. Social enterprising may look like selling goods and or services for which profits are reinvested back into the organization.

The world of fundraising for nonprofits is expanding and changing at a rapid pace. Consider these fundraising opportunities as you prepare and plan your financial strategy for the future.

As Beck and Company’s Certified Public Accountants and Business Advisors, we understand that you want to do all that you can to remain financially healthy in order to carry out the vision and mission of your nonprofit organization. To learn more about our accounting services to help you navigate through these processes, visit here.

Contact us here at Beck and Company CPAs so we can help you with your unique needs as small business owners navigating healthcare and the Affordable Care Act.

Affordable Care Act Tips for Employees and Employers

Health Care Plans have led to many questions for organizations who desire to provide and remain in compliance with regulations, while leaving the “affordable” in Affordable Care Act. The cost of healthcare and health insurance is high and seems to increase annually. Today we will take a look at some creative ways to help employees and employers mitigate the complex and expensive health care system.

Ensure that your particular group is fairly treated within the health insurance marketplace. You are likely aware that the nonprofit industry is rated, on average, 15% to 20% higher by health insurers. Typically churches are rated even higher. For this reason, it is imperative to consider how you are going out to market as a group.
1. Timing is everything. You don’t want to get stuck making decisions under the pressure of a deadline. To avoid this – consider when your plan will renew and be sure to allow plenty of time to review the dynamics of your group. Provide information to your insurance company, leaving plenty of time for them to look at all aspects of your group and acknowledge the positives so they can offer you the best possible policy.
2. Approximately 40% of groups that have over 50 employees renew their health insurance January 1. Second to January, December and July are the next most popular renewal months. For this reason, we suggest avoiding those dates and presenting your request for a proposal in the off-season. This way you allow the insurer to thoroughly and objectively look at your group without the added pressures that exist in those busy months.
3. Check the accuracy of your claims data before you submit it to your potential insurer. Errors or incomplete documentation can potentially weigh negatively on your request and risk ratings.
Look at all of the options for your group’s health plans. Self-funded plans are a notable option that are growing in popularity. Although self-funded plans have their own risks associated with them, there are also potential benefits to be considered. For instance, with self-funded plans employers:
1. Are given more information on group claims as well as on larger individual claims.
2. Are given more control of the plans features and drug card program.
3. Can benefit from controlled health risks and lower claims. Because of this incentive, employers tend to be motivated to take advantage of wellness programs, data analytics, and additional opportunities to reduce health risks for their group.
4. Can diversify their providers based on different components of their plan. Vendors such as drug card providers, network, disease management, and more can be selected individually.
Communicate with your employees regularly. Due to the complexities of the Affordable Care Act and increased costs, employees have more questions than ever. This new system offers many different and unfamiliar ways to obtain health care. such as walk-up clinics and free-standing surgery centers. These options are confusing and difficult to navigate. In addition to the annual, one hour health care options meeting be sure you maintain open and consistent lines of communications with your employees to help them understand and make the best choices regarding how to spend their health care dollars. Some ideas for communication are lunch and learns, WebEx meetings, mass-emails or even mass-texts.
Inform your employees of their options before they make a claim. Even within network, health care provider’s costs can vary greatly. Costs for an MRI can vary upwards of 200% depending on where the service is provided. Take advantage of online tools that can aid individuals to better understand the procedures and costs before they have them performed. Your employees will be especially grateful for the opportunity to save on out-of-pocket expenses and co-pays.

As Beck and Company’s Certified Public Accountants and Business Advisors, we understand that you, as small business owners, want to do what you can for your employees and hope this information has helped you understand your options more thoroughly. To learn more about our accounting services to help you navigate through these tricky processes, visit here. Contact us here at Beck and Company CPAs so we can help you with your unique needs as small business owners navigating healthcare and the Affordable Care Act.

New Tax Considerations for Nonprofit Special Events

Events such as annual galas, 5k run/walks, trips, and dinners are a great source of revenue for nonprofit organizations. They gather stakeholders and constituents together and give organizations an opportunity to showcase their charity or cause and invite others into investing in it. One thing to consider when hosting such events are the potential tax ramifications that go along with these types of events. With proper planning there is no need for alarm. Today we will look at some of these tax ramifications and ways you can ensure you’re covered.

A great place to begin is with an understanding of what exactly constitutes a fundraising event according to the IRS. According to their website, the IRS states that fundraising events are dinners, auctions, and other events conducted for the sole or primary purpose of raising funds.

Before you plan

Fundraising efforts are of course, an important part of any nonprofit organizations strategy. Particularly now, it is imperative to brush up on potential pitfalls from such events. Things like unrelated business income and its corresponding filings and taxes for such income. Additionally you will want to become well versed on Form 990, in particular Schedule G.

Oftentimes corporate sponsorships result in the most lucrative fundraising. However, when hosting an event where a corporate sponsorship receives promotion, that can be considered “advertising”, those dollars could be considered taxable. It is allowed at an event to display a sponsor’s logo, company name, provide an address, website and phone number, or list their product line. Should you advertise for them, (induce a product for purchase, offer discounts etc.), designate a sponsor as an exclusive provider, give a sponsor facilities, services, or other privileges, or grant exclusive or nonexclusive rights to the sponsor’s asset, then that could be considered advertising and is taxable.

Form 990 and Special Events

Another challenge when hosting special events is Form 990 and Schedule G. This is the supplemental information Regarding Fundraising or Gaming Activities. In the past, special events were reported on Form 990, Part 1, Line 9 in which a five-column reporting format was presented as an attached statement. However, the new Form 990, requires that any amount raised over $15,000 from a special event or gaming, or both, require reporting more information that was previously required. In some instances detailed reporting for the top two events specifically, as well as a collective report for all other fundraising events. Another change is they are asking for a breakout of amounts for cash prizes, non-cash prizes, facility rental costs, and other direct expenses for each event.

In addition, if you hold any sort of gaming event, think Bingo or Casino nights, the schedule G, Part III requires additional breakdowns for expenses and prizes. If this is the case and an event is categorized under the gaming definition, you will be asked to answer nine special, multi-part questions regarding the activity. These questions will include the name and compensation provided to the “gaming manager”.

Although these new rules and requirements are tricky and may seem overwhelming, it still remains true that this is a great time to host fundraising events. Don’t let these new regulations scare you from holding them. Rather, be prepared. Raising funds through these means can be fun, and the more creative and innovative you are the more funds you will likely raise. Ensure your safety by knowing the tax laws ahead of time or partner with someone who can help walk you through them.

Serving small and mid-sized organizations and individuals, we provide audit, tax, accounting, and consulting service that address all aspects of your business with one goal in mind – exceeding your expectations. We are able to do this by drawing on our combined business backgrounds and experience in public accounting to help you in virtually any area of your business. If you would like help walking through these new tax ramifications, contact us, today.

Lessons from the ALS Ice Bucket Challenge

A little more than one year ago, the biggest, most wide-spread, organically originated, fundraising campaign swept through social media. The ALS Ice Bucket Challenge began when golfer Christ Kennedy accepted a challenged to donate money to a charity of his choice OR dump a bucket of ice over his head, post a recording of it on social media and nominate three others to the same within a day. Kennedy did this and one of his nominees chose to make a donation to the ALS association, as well as post a video and nominate three others. Simultaneously but unconnected, Peter Frates, a form Boston College baseball player currently living with ALS, posted a video on Facebook. The challenge then took on a life of its own and thousands upon thousands participated in the fundraising campaign raising unprecedented awareness and money for the ALS organization. There are some valuable lessons to be learned from this campaign.

The Power of Social Media

It is undeniable that social media was the star player in the ice bucket challenge’s success. Although one cannot guarantee the type of mega success that the ice bucket challenge received, it proves that social media platforms are a great tool to use, to promote awareness of any cause. Ask yourself the following questions regarding your social media strategy.

What is my social media strategy?
How often is my nonprofit active on social media pages?
How many followers/fans does our organization have?
When was the last time our page posted or interacted on social media?

If you want to play, you have to at the very least, get in the game.

How do we engage the millennials?

Another thing we learn from the ice bucket challenge is the power of the younger generation to support causes. The millennials want to be a part of something bigger than themselves. They also want to know that their money is actually doing something good and making a difference. They are active social media users with influence. Learn how they think, what they are passionate about, what concerns do they have, and target a campaign to engage them. Read more about millennial giving habits here.

The fun factor

One reason for the ALS Ice Bucket campaign’s success was its fun factor. The campaign was engaging, specific, simple to do, sharable, and tapped into FOMO (Fear of Missing Out). If you weren’t challenged to participate you felt a little left out of the fun. This “X” factor was key to the viral nature of the campaign. Think outside the box.

Wide end of the funnel

Another key factors to the ALS success was its accessibility. Anyone could play. Whether you made a financial contribution or not you were still positively impacting the cause just by promoting awareness. Furthermore donations were made that ranged from $1 – $200,000 and every donation mattered.

Savvy organizations are taking a tip from the success of the ALS Ice Bucket challenge to find ways to create online community support that will ultimately lead to greater impact for their organizations. Online giving campaigns should definitely be a part of your future fundraising strategy to support your organizations mission.

Founded in 1987, Beck & Company is an independent certified public accounting firm serving the Greater Washington D. C. metropolitan area with clients also along the Eastern Seaboard. Our firm has been built upon a tradition of service, technical expertise, and creative thinking. Our services are highly personalized, cost effective, accurate, and dependable. Above all, we find the most practical solution to foster success and opportunity in your business and personal financial ventures. Contact us to see how we can help you reach your organizations goals.

WHAT IS #GIVINGTUESDAY and How Can #WEPLAY

In a New York City apartment in 2012, Henry Timms, the Executive Director of the 92^nd Street Y, dreamed of a global day dedicated to giving back. Tis’ the Season, right? With a day fully dedicated to giving thanks, followed by two of the biggest shopping days of the year, why not set aside a day dedicated to generosity? #GivingTuesday is a compassionate response to the consumerism of Black Friday and Cyber Monday. Last year more than 10,000 organizations worldwide participated in GivingTuesday and according to The Chronicle of Philanthropy raised over $46 million dollars. Knowing the trend of this generosity the question becomes, how can nonprofits get involved and make the most of #GivingTuesday in 2015.

Step one – Start Planning Now!

Get a head start promoting on social media, marketing collateral, and direct contact with donors. Take advantage of the hype of this global movement to let those who care about your organization know that you are playing too. If you haven’t put a plan together yet, it’s not too late. Set up a meeting time with your most creative thinkers and establish a plan now.

Step Two – Communicate

Make sure your call to action is simple, clear, and compelling. Some ideas would be to integrate #GivingTuesday into your year-end campaign, organize a volunteer project, hold an open house showcasing your nonprofit, or consider matching grants. Whatever you choose, ensure that people know exactly what you want them to do and when.

Step Three – Share Your Story

Throughout the day, be sure you are sharing your results. Post updates on social media every hour. Take pictures and post them. Interview volunteers and capture their story for a follow up blog post or video to share. Additionally, document the process. Write down what works and what doesn’t so you can learn for next year.

Step Four – It’s Not What You Know but Who You Know

Consider recruiting and then empowering people who will promote your organization and influence others to love it too. Consider looking at your social media and identifying your biggest fans and cheerleaders. Those are the ones who consistently like, comment, retweet, and share your posts; or find a local or global celebrity who supports your cause. Even if their only contribution is to share your #GivingTuesday posts on their social media sights, it’s a win. Just think of all of the people who can be reached through networking with your most popular followers.

Step Five – Wide End of the Funnel

Take advantage of #GivingTuesday as an opportunity to be accessible to everyone. This is a great all play day and should be considered a large generator of new first-time donors. Focusing on a campaign that attracts new donors, is accessible to everyone, and has the potential to move the newly generated donors deeper into the funnel to become long term advocates for the cause.

Step Six – Don’t Forget to Say Thank You

Generosity begets generosity, so don’t forget to be generous in acknowledging and appreciating those who have supported your organization on #GivingTuesday. Anyone who has experienced success in fundraising–and the profound responsibility of stewarding generous donors–knows that gratitude is everything.

Assign someone from your team to be responsible for responding to every contributor, immediately with a thank you email. Take it a step further by making a personal phone call or sending a hand written thank you note. These are the types of actions that set you a part and delight those who have supported you.

Making the Most of the Year End

A necessary function of nonprofit organizations is fundraising. While grant proposals are a significant and valid source of raising funds, there are other things your organization can do to encourage donations. Today we will take a look at some other ways your nonprofit organization can raise funds to achieve your mission.

Fundraising Events

Whether it be an organized run, gala, auction, or dinner, gathering people together for the purpose of learning about and supporting your mission is a great way to raise funds. Hosting fundraising events is common throughout the nonprofit world. One of the greatest benefits is that people can get involved at almost any level. From a $25 entrance fee to a $2,500 donation, you can create ways for everyone to play. In addition to raising funds, events provide the opportunity to raise awareness. Through inviting speakers, sharing stories, and showing pictures or videos you can communicate the value of your mission to constituents and influencers. In addition, hosting events like run/walks or theme parties creates an opportunity to tell the public what you’re about and invite them to participate.

Annual Donations

At least once per year, nonprofits can simply ask people to donate in support of their cause. Most often, this is done through a direct mail campaign and the target audience is anyone who may be interested in supporting your organization. It is wise to send this out during the late fall in hopes of tapping into the year-end donations. Did you know that 25% of all donations are made in the month of December with 10% made the last three days of the year? December breeds generosity as well as tax benefits, take advantage of this to invite people to exercise their generosity by investing in your nonprofit.

Memberships

Most regular corporations have stockholders, however, because nonprofits do not issue stock they do not. An alternative to this is offering membership. A formal membership structure may grant certain rights, such as voting power, towards board members and decisions. Although additional paperwork and administration is necessary to support membership, this is another great way to raise funds for your organization. There are two options for membership.

Rolling Membership – this means that membership income is steady throughout the year as people will be paying their renewals as they expire. This requires someone to keep track of memberships and send out renewals accordingly. The alternative to this is:
Annual Memberships or Memberships that are renewed one time of the year. This has its advantages, as you are able to time your renewal to bring in donations at a set time of the year, which helps with cash flow. On the other hand – you may lose out on potential members and funds if you’re not on top of membership offerings throughout the other months of the year.

Planned Giving

Planned giving is the act of making a commitment to give a charitable organization a gift, over time or in the event of death, as part of the donor’s overall financial and estate planning. All too often, this opportunity to generate donations is overlooked or avoided by nonprofits. Understandably, it is a tricky subject to broach, however, it is important not to underestimate the power of legacy. People want to leave a legacy in an area that they are passionate about. Keep in mind – you are inviting people who care about your nonprofit to make a lasting investment, to keep pursuing your mission. This is not a forced act but an opportunity that can be accepted or declined, but you will never know if you do not ask.

At Beck & Company, Certified Public Accountants and Business Advisors, we are an accounting and consulting firm delivering specialized expertise, creative thinking, and unsurpassed service to ensure that our clients’ financial endeavors flourish. Specifically, we offer nonprofit services such as CFO, Controllership, and Accounting services. Contact us to see how we can help your organization flourish.