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Accountability

Operations Manuals

Feb 26th, 2009
by Alan.
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A ManualI was asked recently how to create an operations manual. The first thing you need to decide is what will be in it.  Will it cover everything or will you have a separate personnel and financial policy / accounting manual?  If you are doing an all-in-one you can always break it into pieces later, you don’t want to have something so unwieldy that it is never looked at.

A great way to start is to create a list of different activities that happen in your nonprofit every week:

  • How is the mail opened?
  • When are deposits made?
  • How is payroll done?
  • Who is making sure our reports are filed?
  • Who approves the bills to be paid?

After five minutes of brainstorming you and your colleagues can have the beginnings of a manual.  It does not have to be fancy, even a simple bulleted list will do the job.

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More Questions

Feb 10th, 2009
by Alan.
5 comments

Questions?Here are some answers to question I received at a recent training.  Many of the questions in this batch came from folks involved with religious organizations, synagogues and churches.

Why are religious organization tax exempt?

The best answer I have is the First Amendment of the Constitution of the United States which states, “Congress shall make no law respecting an establishment of religion, nor prohibiting the free exercise thereof.” Taxing a religious organization might interfere with the free exercise of religion.  For the IRS take on churches and religious organization exemptions please read this.

Is  a board member protected from legal action if it relies on outside advice?

If the board member is not paid and is acting in good faith they are most likely protected if they are involved in making what turn out to be bad decisions, even decisions that result in harm to the nonprofit.  More protection may be had in the organization Directors and Officers Liability insurance policies.  A great source of info on this topic is here, and for an organization that specializes in nonprofit insurances click here.

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Why We Need an Income Statement and a Balance Sheet

Jan 30th, 2009
by Alan.
6 comments

reportsOr alternatively, why we need a Statement of Activities and a Statement of Financial Position, to use nonprofit-financial speak.  I was asked this question at a recent training, as I have been asked many times over the years.  I have been asked why we can’t have just one statement to show everything, one statement to make things easier.  The two reports are not a deliberate effort to confuse us but an attempt to tell the financial story of an organization.

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Workshop Resources

Jan 12th, 2009
by Alan.
2 comments

Box 'o resourcesThanks to all of you who attended the workshops.  As promised I have put together all of the resources that were mentioned in the trainings in one area.  These are listed elsewhere on the site but I thought it would be nice to organize them into one place.  Scroll down the page for the list of all the resources and please post a comment or email me if you have any questions.

  • The Unified Chart of Accounts (UCOA) and Key Word Index – The UCOA (pronounced yoo-KOH-uh) is an activity-based accounting system that incorporates the reporting requirements of many institutional funders and can be tailored to each nonprofit’s changing needs and existing system. The UCOA is designed to allow nonprofits to add as many reporting requirements as necessary while still allowing you to use just one system for accounting and reporting. Click here for more information.
  • payment requisition form mentioned in the workshop
  • Time-sheet and cost allocation samples – click here if you would like to download the excel worksheets to play with.
  • Joint Costs – When you send out something that is both educational AND a solicitation for funds you run the risk of having the total cost of the activity listed as fundraising and not program unless you meet certain criteria. This article will help guide you through the process.
  • The 2004 Nonprofit Integrity Act, SB 1264 – For all the details please see the overview of 2004’s Nonprofit Integrity Act (pdf), and go here and here.
  • Pub. 1771, Charitable Contributions Guidelines for Donors (PDF)
  • IRS & 990 – All of the IRS and updated Form 990 resouces are here, take your pick!
  • Information on putting together an operations manual or financial policies can be found here.
  • Money Managing in Tough Times resources are on this page.
  • How to create a financial policy manual and financial management plan.

For those who missed the presentation handout or want another copy I have the most recent events on Not-for-Profit Accounting Groups page.  Please click to get them and feel free to join the group and start some discussions.  If you don’t see them there contact me and I will make sure to upload them.

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