I have written before about creating policies for your nonprofit. Now nonprofits have a new tool they can easily use to create their own financial management policies and plans. The Nonprofit Risk Management Center has a new tool called My Financial Management Plan where users can go through up to 21 different modules on nonprofit financial and accounting topics to create a variety of policies and procedures to help manage, organize and streamline their financial operations. From the Risk Management Center:
Nonprofit leaders have spent countless hours developing the necessary components of a financial management plan. But for many organizations the components, from an annual budget, return on investment strategy, cash flow planning tool and more, remain disparate. The nonprofit lacks a cohesive plan that reflects the organization’s commitment to the effective stewardship of its assets. My Financial Management Plan was created to guide leaders in updating the components of their financial management systems and integrating these components into a cohesive plan. This powerful system features covers topics such as Board Fiduciary Obligations, Managing Fraud Risk, Managing Cash Flow, Return on Investment Analysis, Cost Allocation, Classifying Net Assets, Managing Cash Flow, Budgeting, the form 990 and Grants and Contributions.
My Financial Management Plan is a powerful tool to turn financial management strategies, policies and protocols into a plan that will help your nonprofit demonstrate both competence and accountability. Use the “Plan Modules” feature to go through the 22 system modules. Each module offers the opportunity to upload existing material from your financial management system, create new content (based on our templates or created “on the fly”), or skip sections you don’t wish to use. Use the “Manage My Plan” feature to edit your draft plan, upload supporting PDF files and view/download your plan. The system also features a classroom with easy-to-understand articles and resources on a wide range of financial management topics.
I was fortunate enough to work on this project and create a lot of the module content. I know that this will be a great tool for nonprofits to learn about what they need know about with regards to their nonprofit’s finances and creating the appropriate policies and procedures to ensure good financial stewardship. For those not ready to buy access to the program you can register with the site to receive periodic email updates on nonprofit financial issues.
If you have any questions or comments about the program please let me know via email or in the comments below.
Posted in Governance, IRS, Nonprofit Accounting, Policies and Procedures, Q&A, Risk Management, Tax Forms
Tagged 990, Accountability, Board of Directors, Contributions, Cost Allocation, Donation Transactions, FASB 117, Gifts in Kind, Instructions, Investment Policies, Manuals, Records Retention, Restrictions, Training, UCOA
I work for a nonprofit which is home to several named endowed funds. We are getting ready to send out annual statements for 2008. Unfortunately, all the funds suffered a loss. A lot has to do with the economic state we are in, but how do you think would be the best way to approach this to families who will see the loss and subsequently question it?
You are not alone, I know several organizations that have similar issues. I think you need to be as honest and straight forward as possible with your donors. Unless they have been under a rock they should be aware of the financial situation we are all in and what has happened to investments in just about everything. They may already be anticipating losses in their funds.
I would include as much information as you can in those statements. Were the losses your funds suffered less that what the market lost in general? That would be something to highlight Were steps taken to minimize losses when the managers realized the market was heading south? I would highlight any ‘good’ news as much as you can. It is the donor’s money and they have a right to ask questions, but if we are proactive in giving them information up front perhaps we can forestall some questions. But you will get some so you should be prepared in advance to answer them all as completely as possible. Saying “I don’t know” is bad, and lying to a donor or covering up bad news is even worse.
If mistakes were made in handling the endowed funds on your end, say perhaps the funds were invested a little more aggressively than they should have been, be up front and let them know that mistakes will not happen again. And maybe letting them know what your investment plan going forward would be helpful as well.
Below are three items that might be of interest to nonprofit accounting professionals.
How can our nonprofit find a CPA?
This article from Step By Step Fundraising has some great information on getting you started on your search. As a bonus for you home school folks out there the author of that article has a great website too.
Are board members liable for investment losses?
Two posts back I answered a question on weather or not a board could be liable if it relied, in good faith, on outside advice when making its decisions. Later I came across this great piece from the Risk Management Center that talks about the recent Madoff scandal and the impact it will have on nonprofits who had invested funds with him. Please do read the article and follow through the links, especially to this one, a free publication that details the state laws for charitable immunity.
IRS and 990 trainings and tips