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:
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 (1st 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 2nd Qtr and 3rd
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?
