Planning and Compliance for Non-Profit Youth Organizations

Want to review your planning and compliance as a Non-Profit (NP)? 

Hall and Hinkelman have an article on IntellZine.com about the planning process for small businesses non-profit organizations. Figure 1 (from the Perpetual Innovation™ book series) shows the planning process for any company throughout the year. It concentrates on the best time to plan because that is the one time of the year that organizations must complete their financials and do their tax filings. This would be the end of December for a company that has a fiscal year matching the calendar year. However, many youth organizations match their fiscal year with the school year, often ending the fiscal business year on June 31. This article offers several excellent sources for information on planning for small organizations and checklists for non-profits (to maintain compliance). Here are the top three resources:

• Small Business Administration Resources: www.SBA.gov
• Small Business Administration 10-Steps to Start a Business.
• SCORE’s Checklist for Non-Profit Organization Startup.

Compliance. Tax Filings are critical as well as doing the required board meetings according the state of incorporation. All organizations need to meet these basic requirements to be in compliance with the governing laws. IRS.gov has a searchable database of charities that qualify for charitable tax deductions, so NPs need to maintain that qualified status. A NP needs to maintain tight monetary controls, clear accounting, and separation of programs. Grants require clear and timely reporting to assure that moneys are appropriately spent.

Metrics. This article discusses metrics which are different for Non-Profits (NPs). Although the concepts apply somewhat, there are no profits and losses. Still, if expenses exceed income over time, a NP has to close (or go bankrupt). If revenues exceed expenses, there is an accumulation of assets that will help the organization toward accomplishing its goals of providing charitable services. Donors and grants look at metrics such as administrative expenses. There are three key databases that potential givers use to select (or reject) charities; a NP needs to gather that information and present in grant applications and promotional materials. Even small and extremely local NPs need to follow best practices. If a metric does not look good, it might be the nature of your specific non-profit, and can be explained; or a poor metric may signal the critical need for improvement. Three key databases are:

• CharityNavigator.org ranks charities within particular categories. This is the most important site for someone considering which causes to select for charitable giving.
• GuideStar.org does a deeper dive into the non-profit including reporting, officers and programs.  
• Give.org, by the BBB Wise Giving Alliance, provides a Better Business Bureau type of list for complaints about Non-Profit organizations. Use this source carefully. A very large national or international organization might have thousands of complaints but only a tiny fraction of all customers served.

A small organization, and all Non-Profits, need to be very efficient in their allocation of time for planning and utilizing the planning process for better management. Break the planning process into four quarters culminating in a business plan (and budget) for next year that is completed about the end of the fiscal year. The first quarter (1^st Qtr) is when the plan is implemented, so it is a scramble with no time for strategic planning. Organizations involved with youth services would think of this as the hectic beginning of the school year. That leaves the 2^nd Qtr and 3^rd Qtr for longer term planning and the evaluation of new products and services.

Build a calendar of the planning year, and checklists. Life for any small organization, especially non-profits that are often running on a shoestring budget, can be very chaotic. The trick is to be very efficient in your planning and managing so as to make more order to your youth organization and, therefore, to the youths you serve.

What timeline do you use for your NP? What resources? What checklists?