By Susan Rosati, Financial Consultant

Financial controls serve as a checks and balances for your organization. This is especially important for nonprofits because they use fund accounting which requires them to put their funds into groups. Some of these funds will be restricted so this money can only be spent on certain activities and not for general expenses. Utilizing a budget is important for cost control. Estimating your expected revenue and expenses and tracking your actual results against your budget each month will help regulate any fluctuations. Large variances can be early signs of problems and by taking corrective action your organization will weather the storm.

One of the best ways to stay on top of your financial controls is to reconcile your bank statements each month. All bank accounts should be reconciled monthly by someone who does not issue or sign the checks. Being delinquent on this function can create havoc. Every nonprofit should put controls in place for expense disbursements starting with a separation of duty. Payments should be approved by someone other than the person making the payment. This approver should make sure all necessary documentation is supplied before signing off. Vendors should be reviewed for ghost vendors that don’t actually exist. Not utilizing these procedures can cause a loss of financial control.

Other areas of control should also be addressed. Labor is often the largest part of your budget and having control measures in place is critical. For non-exempt employees, timesheets should be reviewed for accuracy and approved by management. Payroll allocations for functional expenses should be reasonable. Lastly, with all accounting functions being done online it’s imperative that your accounting system is protected against a security breach or breakdown. Nonprofits that take these measures to protect their organization will be ready when things go awry.

This series of reports is designed to inform local-level efforts to improve community well-being and racial equity. These reports disaggregate data from the 2020 Census, American Community Survey microdata files, DataHaven Community Wellbeing Survey record-level files, and other federal and state sources to create relevant town-level information that is not typically available from standard public databases.

DataHaven has published a town equity report for all 169 towns in Connecticut. These reports are extremely useful when you are doing strategic planning, preparing grant requests or looking to create more diversity when recruiting new board members.  I know I join with so many in the nonprofit sector in extending our appreciation to Data Haven.

Click here to access the reports for your catchment area.

By John Brooks, Senior Consultant

What steps have you taken, post-pandemic, to ensure that those individuals who stepped up when you needed them most continue their increased support?

How does your organization get ready for the end-of-year giving season and encourage larger and more frequent contributions from your donors?

There are several things you can do, right now, to increase the odds of continued support with the potential for larger donations at year-end. The traditionally “slower” summer months provide an excellent opportunity to reach out, check in and see how your donors are doing.

• Invite your best donors (or those prospects that you’ve been cultivating) to your facility for a visit. This could include individuals, corporate sponsor contacts, volunteers, and foundation leaders. Introduce them to those you serve, your leadership, front-line staff, volunteers, and perhaps other donors. Show them where the work gets done!
• Or, if that’s not possible, ask if they have time for a cup of coffee or lunch with the executive director.
  • You can ask if they have any questions about the impact that their support has had on the community.
  • You can fill them in on how your organization is doing, what impact your organization has made since last summer and what challenges are in your organization’s future.
  • It’s also a great time to check-in on how they are doing. What changes have taken place in their life like a new job, a new home, retirement, weddings, grandchildren, etc.
• How about a social gathering, “porch party,” or back-yard BBQ with one of your board members?
  • This is not a fundraising event – no envelopes on the picnic table, no silent auction items, and no raise-the-paddle – just an opportunity to meet leadership, ask questions and socialize with food and drinks. Hey, it’s summer! Why not?

I spent my entire development career getting to know those who supported the agencies I represented. I didn’t ask for money every time we communicated. It was so much more than a transactional relationship. We really did get to know each other and discuss what changes we collectively wanted to bring about in society. Those conversations helped me learn so much about why partnering with my organization was so important to our donors and how we helped them bring about that change they so desperately wanted to see.

Summer is a fun time to reach out. Yes, many are on vacation but just as many aren’t and would welcome a “special” invitation for the opportunity to talk about how they want to change the world!

I’ve consistently preached to my staff that the golden rule of fundraising is that “ABSOLUTELY NOTHING WILL HAPPEN IF YOU DON’T ASK.” The worst anyone can say is “No.” And even if it’s a “no” this time, at least they’re aware that you’re thinking about them.

So, get out there and do it now! What’s the worst that can happen? You have more to lose by not asking and it very well may result in an increased gift this December!

 Enjoy your summer!

-John

We are Danosky & Associates are proud to share with you a recent blog posted by our dear friend and collaborator, Jenora Ledbetter of The Self-Care Network…

Dear Readers,

In today’s newsletter, we bring you a significant development that has sparked debates and discussions across the educational landscape. The ruling on the removal of affirmative action from education institutions has recently taken place, and it’s implications are being analyzed and examined by educators, policymakers, and the public alike.

In a landmark decision, the Supreme Court has ruled in favor of removing affirmative action policies from education institutions. This ruling has generated a wave of discussions regarding equal opportunities, diversity, and the future of education.

Affirmative action refers to policies that aim to address historical discrimination and promote equal opportunities for marginalized groups, particularly in education and employment. These policies often involve the consideration of race, gender, ethnicity, or other factors to ensure a more diverse and inclusive environment.

Those in favor of removing affirmative action argue that it perpetuates discrimination by treating individuals differently based on their race or ethnicity. They believe that admissions decisions should be based solely on merit and individual qualifications, rather than considering an applicant’s background.

Supporters of the ruling also argue that affirmative action can create an atmosphere of unfairness. They say that some individuals may feel disadvantaged due to their race or ethnicity, even if they are highly qualified. They believe that removing such policies will lead to a more equitable society by treating everyone on an equal basis.

On the other hand, opponents of the ruling express concerns about the potential consequences of removing affirmative action. They argue that without these policies, it will become more challenging to achieve diversity and equal representation in educational institutions. They believe that diversity brings valuable perspectives, enriches the educational experience, and prepares students for a diverse workforce.

Critics also contend that removing affirmative action may disproportionately affect underrepresented groups, widening existing disparities and perpetuating systemic inequalities. They emphasize the importance of addressing historical disadvantages and providing opportunities for those who have been historically marginalized.

Many organizations are asking if the new ruling will put a target on corporate diversity programs. They are also wondering how they can protect workplace diversity initiatives?  

First, it is important that employers understand that educational institutions are governed under Title VI, whereas organizations are governed under Title VII. These are two separate titles. The legal framework is not identical, and there are different legal standards that come into play.

Organizations should not be reactive or alarmist in their responses and they should not jump to conclusions and make any changes to their current or future DEI initiatives. Making any type of changes, can be counterproductive, and it can undermine and damage employees trust in the organization and make it harder for organizations to recruit a diverse team. It is crucial to acknowledge that promoting diversity and creating an inclusive work environment remains essential for a thriving and successful business.

The Self Care Network LLC is working with organizations to update their communication and strategic plans, as well as providing Title VII compliance program trainings which includes a holistic strategy to help organizations continue their diversity, equity, inclusion, and belonging efforts.  

This is an exciting time for organizations to conduct a thorough review of their current diversity initiatives to ensure they align with legal guidelines and promote fairness. Employers can continue to protect workplace diversity initiatives by embracing inclusive practices.

Remember, diversity is not just a compliance requirement, but a powerful driver of success in today’s global and interconnected world.

You can reach the CEO/Founder of The Self Care Network LLC with the contact information listed below

Jenora Ledbetter

203-441-5994

jenora@theselfcarenetwork.org

By Karen Greve Milton, Senior Consultant

This is the first part of a three-part series on Executive Transitions

Ensuring a smooth transition when an Executive Director announces their departure is rarely easy, but it can be handled effectively and efficiently, leading the non-profit organization to hire a new executive who will lead the organization into the future.  Whether or not your Executive Director is long-serving, the transition steps to hiring a new executive remain the same.  For the sake of the discussion in this series, we will assume that the non-profit does not have a succession plan in place and therefore needs to hire someone from outside the non-profit to serve as the new Executive Director. 

Form a Search Committee:  The first step in this process is for the Board to form a Search Committee to oversee the search for the new Executive Director.  The Search Committee should interview fellow Board members and key staff regarding their views of the current state of the non-profit:  what is working well, what is not working well and what, in their view, should be changed.  Board members and staff also should be asked for their views of the duties and responsibilities of the new Executive Director.  This self-assessment exercise will help the Board develop a shared consensus on the future direction of the organization and define the skill-set, experience and characteristics needed in the new Executive Director.  Remember, you are hiring a new leader to take your non-profit into the next chapter of its existence and that means you are seeking a new leader who will have the vision and requisite experience to lead your organization into the future.

The data collected from these interviews can then be used to draft a job description for the new Executive Director.  The Search Committee should develop a hiring plan with a timeline to solicit applicants, interview applicants, hire and onboard the new Executive Director.  This hiring plan should be presented and approved by the Board.  Once the Board approves the hiring plan, the Search Committee should implement it so the hiring process gets underway as quickly as possible.  The hiring process most likely will take six to nine months from the placement of the job announcement to the onboarding of the new Executive Director.

During the search process, the Board should ask key Board members or Committee Chairs to take on the task of overseeing key projects, programs or events that are underway or in the planning stages.  These Board members should work with staff (and the Interim ED) to ensure that the organization continues to function, including carrying out fundraising efforts.

In part two of this series, we will discuss Appointing an Interim Executive Director

Let us know if we here at Danosky & Associates can assist you in your leadership transitions.