If your not-for-profit focuses all of its fundraising energy on the holiday season and end of the year, it’s not misguided. After all, 26% of charitable giving to nonprofits occurs in December, according to the 2023 M+R Benchmarks Study. But that means almost three quarters of annual donations need to be obtained during the rest of the year. Even if your December haul is much greater, you still risk experiencing cash shortfalls.

The best way to make fundraising an ongoing process with strategies you can use any time of the year is to build a fundraising plan.

It takes a team

The first step to a solid fundraising plan is to form a fundraising committee. This should consist of board members, your executive director and other key staffers. You may also want to include major donors and active community members.

Committee members need to start by reviewing past fundraising sources and approaches and weighing the advantages and disadvantages of each. Even if your overall fundraising efforts have been less than successful, some sources and approaches may still be worth keeping. Next, brainstorm new donation sources and methods and select those with the greatest fundraising potential.

As part of your plan, outline the roles you expect board members to play in fundraising efforts. For example, in addition to making their own donations, they can be crucial links to corporate and individual supporters.

A flexible plan

Once the committee has developed a plan for where to seek funds and how to ask for them, it’s time to create a fundraising budget that includes operating expenses, staff costs and volunteer projections. After the plan and budget have board approval, develop an action plan for achieving each objective and assign tasks to specific individuals.

Most important, once you’ve set your plan in motion, don’t let it sit on the shelf. Regularly evaluate the plan and be ready to adapt it to organizational changes and unexpected situations. Although you’ll want to give new fundraising initiatives time to succeed, don’t be afraid to cut your losses if it’s obvious an approach isn’t working.

Get going now

Perhaps you’re gearing up for your year-end campaign (most nonprofits start planning in September or October). That doesn’t mean you should wait until the new year to build a more comprehensive fundraising plan. Your organization’s cash flow depends on steady income, so the sooner you put a plan in place, the better. Contact us for more information.

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More and more U.S. workers are calling for “pay transparency,” and not-for-profit employers need to listen — and act. Pay transparency is the idea that employers should openly share their compensation policies and practices with job candidates, current employees and the public. Many states and cities have already passed pay transparency laws. But even if you aren’t subject to such laws, consider disclosing pay ranges for specific positions and explaining how your organization calculates wages, raises and bonuses.

Employers and employees are on board

In its 2023 Compensation Best Practices Report, software and data company Payscale reported that 45% of employers now include pay ranges in their job postings. What’s more, 48% of organizations said that legislation is driving them to change compensation policies. In a different Payscale report, a majority of employers stated that compensation transparency, when analyzed in isolation, “decreases [worker] intent to quit by 30%.”

Surveys of employees, particularly younger workers, underline how important transparency is today. In a 2023 report, technology services company Symplicity revealed that 87% of Generation Z respondents thought that pay transparency was “important” or “very important,” and over half said they’d be discouraged from applying for a position if a salary range wasn’t publicized.

Providing rationalizations

But simply divulging compensation ranges in job listings isn’t enough. Your nonprofit also needs to clearly explain to job candidates how you determine pay and why the compensation you provide is competitive with that of other nonprofits (and, possibly, with what similar for-profit employers are offering).

Also explain what staffers need to do to receive raises — and what kinds of raises are realistic. Be as specific as possible and make sure you discuss the possibility of salary increases and job promotions with employees during their performance evaluations.

Comply or adopt voluntarily

If your state or municipality has passed laws regarding pay transparency, review your employment policies to ensure they’re in compliance. If no law applies, consider adopting these practices voluntarily. Pay policy disclosure can help you recruit serious job candidates in what remains a tight labor market. It can also help foster the kind of trusting and equitable work culture that most nonprofits strive to achieve.

If you’re unsure about how to set salary ranges, contact us. We can analyze internal and external data to determine your nonprofit’s ideal compensation targets.

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Tax reporting may be the last thing on your mind when planning a special fundraising event. But your not-for-profit should carefully track revenues and expenses and retain related documentation now to facilitate the reporting process later. Pay attention to the following issues.

What to report

Tax reporting for an event may require different — and more — information than financial statement reporting does. If your organization adheres to Generally Accepted Accounting Principles (GAAP), you usually must report revenue and expenses related to special events on your financial statements as special event revenue. For tax purposes, though, your organization may be able to report some of the event ticket revenue as contributions. For example, if attendees pay more for a ticket to a dinner than the dinner’s fair market value (FMV), the excess would be a contribution.

Tax reporting can require more granular information, too. You report special event data on IRS Form 990, “Return of Organization Exempt from Income Tax.” If you’re reporting more than $15,000 in fundraising event gross income and contributions, you also need to complete Schedule G, “Supplemental Information Regarding Fundraising or Gaming Activities.”

Schedule G requires you to report amounts for cash prizes, noncash prizes, facilities rental, food and beverages, and entertainment. If your event includes gaming, you’ll have to answer a series of multi-part questions on Schedule G, too. In addition, you’ll need to allocate income and expenses between the gaming and fundraising event on Form 990.

How to handle donations and donors

Nonprofits often rely on donated services or facilities, as well as the work of volunteers. Although GAAP generally requires nonprofits to record such in-kind contributions and sometimes the value of volunteer time, the IRS doesn’t include them in contributions or expenses. Goods donated for an event, on the other hand, are reported as contribution revenue and, when used, as expenses.

Be sure to provide donors with information about the tax benefits they receive from participating in a special event. They might not be aware that their deductible contributions are reduced by the FMV of the benefit they receive. It’s generally up to you to report the value donors receive in a written statement, reminding them to deduct only the excess of their payment over the FMV. Specifically, you must provide the disclosure for payments of more than $75. Note that it’s the initial payment amount that triggers the obligation — not the amount of the deductible portion. Failure to make the disclosure can result in a penalty of $10 per contribution, up to $5,000 per fundraising event.

Even if it’s not legally required, you should routinely provide special event participants with a statement of the benefits they receive. You’ll make it easier for them at tax time, which could result in the kind of goodwill that leads to future support.

When to start organizing

Although it may seem like more work, planning for tax reporting while you’re still in the early stages of your event preparation will pay dividends later. If you need help collecting data or complying with IRS rules, contact us.

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Do your not-for-profit’s accounting processes work perfectly — with no errors, delays or other inefficiencies? If yours is like most organizations, probably not. But if your nonprofit is committed to improvement, you have an edge over those that accept the status quo. Whether it’s building budgets, paying invoices or preparing financial statements, there’s almost always something that can work better, faster and less expensively.

Prioritize certain functions

Certain financial functions deserve greater attention than others. For example, it’s essential that individuals or groups responsible for your organization’s financial oversight (such as your CEO or board finance committee) promptly review monthly bank statements and financial statements. They should look for obvious errors or unexpected amounts. If your nonprofit doesn’t handle this task efficiently, ascertain the reason and find a solution. It could be one person who doesn’t understand his or her role or a systemic problem with multiple points of failure.

Another important area is paying invoices. Make sure your policies and procedures prioritize a monthly cutoff. For instance, require all invoices to be submitted to the accounting department within one week after the end of each month. Too many adjustments — or waiting for employees or departments to weigh in — can waste time and delay the completion of your financial statements.

You also may be able to save days at the end of the year by reconciling your balance sheet accounts each month. It’s a lot easier to correct errors when you catch them early. Also, be sure your organization is reconciling accounts payable and accounts receivable subsidiary ledgers to your statements of financial position.

Let software work for you

Many organizations underuse the accounting software package they’ve purchased because they haven’t invested the time to learn its full functionality. If needed, hire a trainer to review the software’s basic functions and teach time-saving tricks and shortcuts to staffers. If you find your software is outdated or simply doesn’t meet your nonprofit’s needs, prioritize its replacement.

With the right software, you should be able to standardize financial reports with no modification. This not only will reduce input errors but also provide helpful financial information at any point, not just at month end. And consider performing standard journal entries and payroll allocations automatically within your accounting software. Many systems have the ability to automate, for example, payroll allocations to various programs or vacation accrual reports. But review any estimates against actual figures periodically, and always adjust to actual amounts before closing your books at year end.

Find inefficiencies — and fix them

This is only the tip of the iceberg. Depending on your nonprofit’s size, programming and other characteristics, you may have other accounting functions that don’t work as well as they could. We can advise on specific problems or even conduct an organization-wide audit to find — and fix — multiple inefficiencies.

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Since the original COVID-19 lockdowns, many not-for-profits have allowed their staffers to work from home — or work a hybrid schedule that puts them onsite only part time. This can leave a lot of office space unused. Depending on your nonprofit’s current lease, it may be more cost-effective to downsize or seriously consider other options.

Relocate work

As many organizations learned during the pandemic, when equipped with reliable Wi-Fi, quality devices and necessary software, employees in a variety of roles can perform their jobs from home. If many of your employees are working at least part-time from home, a smaller office space could be to your advantage.

A move to a more desirable location, might make sense. Consider where your clients, staffers and volunteers live. Do those who spend time in your office have long commutes? Does your current space offer the amenities you need and want? Is it cheaper to relocate to a less expensive building or geographic area? In many regions, high vacancy rates are driving down commercial rents, and you may now be able to afford a better space — particularly if you’re looking for an office with a smaller footprint.

But you may wonder how downsizing would affect productivity if all or most of your employees and volunteers ever need to use the office at the same time. For example, a natural disaster could lead to a sudden surge in demand for your nonprofit’s services. Even if a surge is a possibility, it’s a good idea to at least look at how your organization is using the space it leases and how it might use it better.

Renegotiate your current lease

One of your best opportunities in today’s environment may be to strike a better deal with your current building’s owner. Read your lease carefully and find out whether any of the owner’s other tenants have successfully negotiated better lease terms. Also check out the occupancy rate for similar properties in your area to get a feel for how eager the owner might be to keep you as a tenant.

If property owners in your area are struggling to keep tenants, consider requesting an amended lease with a reduced rent and no strings attached. Or you might agree to extend your lease, but with reduced rent. Another option is to pay the contracted rent if the owner agrees to foot some or all of the bill for improvements to the space. Finally, the owner may allow you to sublease some of your space (if this isn’t already an option).

Reduce expenses

Leasing office (or other facility) space is likely one of the biggest line items in your nonprofit’s budget. Now is a great time to see if you can reduce this expense, or at least get more for your money. Contact us for help finding other rental cost efficiencies.

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