The American Rescue Plan Act, signed into law on March 11, provides a variety of tax and financial relief to help mitigate the effects of the COVID-19 pandemic. Among the many initiatives are direct payments that will be made to eligible individuals. And parents under certain income thresholds will also receive additional payments in the coming months through a greatly revised Child Tax Credit. Here are some answers to questions about these payments. What are the two types of payments? Under the new law, eligible individuals will receive advance direct payments of a tax credit. The law calls these payments “recovery rebates.” The law also includes advance Child Tax Credit payments to eligible parents later this year. How much are the recovery rebates? An eligible individual is allowed a 2021 income tax credit, which will generally be paid in advance through direct bank deposit or a paper check. The full...[ Read More ]
Many organizations get stuck in procedural ruts because it’s easier in the short term to continue doing things the way they’ve always been done. But it generally pays to regularly review your not-for-profit’s accounting function for inefficiencies and oversight gaps. You might plan to conduct a review once a year or perform an assessment whenever significant changes, such as staff turnover or the introduction of new software, warrants one. Room for improvement Be sure to consider the following items in your review: Cutoff policies. Your nonprofit should set and adhere to monthly invoicing and expense recording cutoffs. For example, require all invoices to be submitted to your accounting department by the end of each month. Too many adjustments — or waiting for staffers or departments to turn in invoices and expense reports — waste time and can delay financial statement production. Account reconciliation. You may be able to save considerable time at...[ Read More ]
With the competition for donation dollars fierce right now, many not-for-profits are turning to influencers — from Hollywood celebrities to politicians to blog stars — to raise awareness of their organizations and causes. But before your nonprofit solicits influencer support, there are a few things you should know. On the plus side If influencer marketing didn’t work, for-profit companies wouldn’t pay celebrities to tout their products on their social media accounts. These sponsors realize that influencers have ready access to the thousands, if not millions, of people who follow them online. Their followers may consider influencers credible on a wide range of topics. When an influencer promotes a nonprofit, that organization immediately assumes an air of legitimacy with his or her followers. Followers may explore the cause more thoroughly or just immediately click a link to donate. For budget-strained nonprofits, it’s hard to beat the cost-efficiency of influencer marketing. By...[ Read More ]

Nonprofits: Get the word out in 2021

Posted April 23, 2021

Many not-for-profits have been too busy trying to stay afloat to put a lot of resources and energy into public relations. But as the new year begins, you might start thinking about how you’ll promote your organization, mission and programming in 2021. Here are five suggestions: 1. Report regularly. Raise your nonprofit’s profile by releasing news releases often rather than just occasionally. The addition of a key staff member, an operational milestone, a new grant you’ve received or the kick-off of a fundraising campaign, can warrant a press release. Social media platforms are especially useful for publicizing news less formally — not to mention quickly. 2. Choose the best outlet. Focus on outlets that are most likely to use your press releases such as local television stations that cover community news. Get to know producers, editors and publication and broadcast schedules. By taking the time, you can pinpoint the most suitable outlets...[ Read More ]
It’s been almost a year since many not-for-profit organizations sent staffers home — to work remotely. For many nonprofits and employees, remote work has been a positive experience. And as the pandemic fades, you’ll probably need to decide whether employees should remain where they are, return to the office or work a hybrid schedule. Win-win proposition Various surveys have found that working remotely generally lifts employee morale and job satisfaction. After all, working from home cuts expenses related to commuting and work clothing, and the work-life balance is generally more favorable. Employers benefit, too. Higher employee morale and job satisfaction can help your nonprofit recruit and retain talent. There are also cost factors to consider. Nonprofits with even a portion of their workforce working remotely can save on everything from their leases to utility bills to office supplies. What’s more, remote work may boost employee productivity. One Gallup poll found...[ Read More ]
President Biden signed the $1.9 trillion American Rescue Plan Act (ARPA) on March 11. While the new law is best known for the provisions providing relief to individuals, there are also several tax breaks and financial benefits for businesses. Here are some of the tax highlights of the ARPA. The Employee Retention Credit (ERC). This valuable tax credit is extended from June 30 until December 31, 2021. The ARPA continues the ERC rate of credit at 70% for this extended period of time. It also continues to allow for up to $10,000 in qualified wages for any calendar quarter. Taking into account the Consolidated Appropriations Act extension and the ARPA extension, this means an employer can potentially have up to $40,000 in qualified wages per employee through 2021. Employer-Provided Dependent Care Assistance. In general, an eligible employee’s gross income doesn’t include amounts paid or incurred by an employer for dependent care assistance provided to...[ Read More ]
“Accountability” may seem like one of those popular management concepts you know would be nice to implement if your not-for-profit had the time and budget. But not only is accountability essential to your nonprofit’s health and efficacy — affecting everything from donations to grants, hiring to volunteering, board fiduciary duty to employee morale — it’s also easy to adopt. Start with laws and rules Accountability starts by complying with all applicable laws and rules. Make sure new staffers and board members understand these as well as your nonprofit’s code of conduct. In fact, ask employees and board members to sign an ethical code — and hold them to it. As your organization pursues its mission, it must do so fairly and in the best interests of its constituents and community. Your status as a nonprofit means you’re obligated to use your resources to support your mission and benefit the community...[ Read More ]
Cash flow is a top concern for most businesses today. Cash flow forecasts can help you predict potential shortfalls and proactively address working capital gaps. They can also help avoid late payments, identify late-paying customers and find alternative sources of funding when cash is tight. To keep your company’s cash flow positive, consider applying these four best practices. 1. Identify peak needs Many businesses are cyclical, and their cash flow needs may vary by month or season. Trouble can arise when an annual budget doesn’t reflect, for example, three months of peak production in the summer to fill holiday orders followed by a return to normal production in the fall. For seasonal operations — such as homebuilders, farms, landscaping companies, recreational facilities and many nonprofits — using a one-size-fits-all approach can throw budgets off, sometimes dramatically. It’s critical to identify peak sales and production times, forecast your cash flow needs...[ Read More ]
A conflict of interest could impair your auditor’s objectivity and integrity and potentially compromise you company’s financial statements. That’s why it’s important to identify and manage potential conflicts of interest. What is a conflict of interest? According to the America Institute of Certified Public Accountants (AICPA), “A conflict of interest may occur if a member performs a professional service for a client and the member or his or her firm has a relationship with another person, entity, product or service that could, in the member’s professional judgment, be viewed by the client or other appropriate parties as impairing the member’s objectivity.” Companies should be on the lookout for potential conflicts when: Hiring an external auditor, Upgrading the level of assurance from a compilation or review to an audit, and Using the auditor for a non-audit purposes, such as investment advisory services and human resource consulting. Determining whether a conflict of...[ Read More ]
The new COVID-19 relief law that was signed on December 27, 2020, contains a multitude of provisions that may affect you. Here are some of the highlights of the Consolidated Appropriations Act, which also contains two other laws: the COVID-related Tax Relief Act (COVIDTRA) and the Taxpayer Certainty and Disaster Tax Relief Act (TCDTR).   Direct payments The law provides for direct payments (which it calls recovery rebates) of $600 per eligible individual ($1,200 for a married couple filing a joint tax return), plus $600 per qualifying child. The U.S. Treasury Department has already started making these payments via direct bank deposits or checks in the mail and will continue to do so in the coming weeks. The credit payment amount is phased out at a rate of $5 per $100 of additional income starting at $150,000 of modified adjusted gross income for marrieds filing jointly and surviving spouses, $112,500...[ Read More ]