Monthly Archives

December 2017

The Skills Nonprofits Need in 2018 – and Beyond

By | HR, Nonprofit | No Comments

As you start thinking about the year ahead, it’s time to think about the skills your team needs to move your nonprofit forward. Whether you already have team members with these skills or you’ll need to hire new employees with them, the fact remains that these are the skills most sought-after among employers.

The Top 5 Skills Nonprofits Need Now – and Why

  1. Cloud and Distributed Computing: So much of our software is moving to the cloud we predict that site-based software and support is going to be hard to obtain in the future. For these and other reasons, it just makes sense to move things to the cloud. Not only can you save money on your software, hosting, and security, but it also enables better data sharing, storage, and updates. If you don’t have someone on your staff knowledgeable about cloud computing, consider adding it to an IT job description or finding a consulting firm to assist with cloud migration.
  2. SEO and SEM: Search Engine Optimization and Search Engine Marketing refer to specific tactics your website utilizes to boost its visibility and hence its clicks and interactions. Adding these skills to your nonprofit will be invaluable in the upcoming months and years as competition for clicks increases.
  3. Business Intelligence: Business intelligence refers to the ability to gather data and information from one or more computer systems and distill it into usable facts. BI system can synthesize financial, accounting, sales, marketing, donation, grants and other information into one report that your nonprofit can use for better business management. Without BI systems in place, your organization runs the risk of having to export multiple data files or reports and manually extract data from each to get the big picture of the organization.
  4. Network and Information Security: You may think that your nonprofit is safe from cyber attack, but in many cases it’s not. Cybersecurity is critical for nonprofits, many of whom rely on small teams and volunteers for assistance. And while many security breaches are preventable, you still need someone in your organization to advise your teams while troubleshooting and fixing your systems.
  5. Corporate and Nonprofit Law and Governance: Corporate laws, including laws that apply to nonprofit organizations, continually change. It’s important to have someone in your organization who understands their application to the nonprofit world and who can help you adhere to all laws pertaining to corporate management and governance. It’s also helpful to have an accounting team member who understands the nuances of pending FASB changes as they pertain to financial reporting, such as FASB 606 changes, which will impact grants and contracts.

Hiring or Outsourcing to Get the Skills You Need

To find the skills you need on your team, you’ll need to hire new employees, train current employees, or outsource the needs to a consulting firm.

Network security and high-level accounting are both examples of skillsets that can be outsourced to a consulting firm. In both areas, consultants may actually be a better choice, because they regularly interact with numerous organizations and work hard to stay abreast of the latest developments in their field.

Training is available through local colleges/universities and professional organizations. This may be sufficient for current staff members who need a refresher or update on specific skills.

As the new year approaches, make a commitment that you’ll work to ensure your team has the right skills to meet the challenges the future brings. To serve members, constituents, and others, you need to be on the cutting-edge of many areas that the corporate world emphasizes, too.

Welter Consulting

Welter Consulting bridges people and technology together for effective solutions for nonprofit organizations. We offer software and services that can help you with your accounting needs. Please contact Welter Consulting at 206-605-3113 for more information.

FASB Seeks Comments on Revenue and Grant Recognition Reporting

By | Accounting, FASB, Grant Management | No Comments

The Financial Accounting Standards Board (FASB) is looking for input. The group wishes to improve, clarify, and enhance revenue recognition standards for grants and contracts by nonprofits. They are seeking comments on the topic, and nonprofit organizations are welcome to respond.

Currently, many nonprofit stakeholders indicated confusion about when to report grant and contract revenue or how to consistently report revenue in these areas.  This difficulty is compounded in the area of government grants and contracts.

The comment period for the proposed Accounting Standards Update (ASU), titled Clarifying the Scope and Accounting Guidance for Contributions Received and Contributions Made, ends November 1.

Proposed ASU Changes

The big changes proposed in the standards include distinguishing between contributions (nonreciprocal transactions) and exchange (reciprocal) transactions. If the proposed ASU changes proceed, more grants and contracts will be counted as contributions.

The proposed framework indicates that if a grant is an exchange transaction, revenues should be recorded in accordance with Revenue from Contracts with Customers. Details on this may be found in Topic 606 or other applicable topics.

Grants, on the other hand, are determined to be contributions and should be recognized as revenue for not for profit entities under Revenue Recognition Subtopic 958-605.

There are no sweeping generalities for grants. Each one must be evaluated and categorized individually. Grants can be considered exchanges if the value received is commensurate with the services rendered Then it is categorized as an exchange or reciprocal transactions.

The good news is that the ASU includes plenty of examples to help nonprofits determine whether grants are nonreciprocal or reciprocal transactions.

Conditional Contributions

If a grant does not have either a barrier or a right of return, it may be considered a conditional contribution. A conditional contribution is a grant that comes with strings attached – conditions that must be met in order for the grant to be considered fully received.

Some conditions include:

  • Measurable performance goals such as matching grants, levels of service, or other items that can be measured or quantified;
  • A stipulation that specific conditions must be met for the grant;
  • Something limiting how the funds can be spent;
  • Additional actions that would be required to be taken by the recipient organization in addition to the activities that it would normally pursue

For those fuzzy gray areas, the ASU states that donations requiring stipulations can be presumed to be conditional.

Some grants may be considered contracts with a customer. In that case, the specifications in Topic 606 take priority.

When Does This Go into Effect?

The new recommendations will go into effect on or around December 31, 2019, for the fiscal year ending in 2020. That may seem like a long way off, but for nonprofits dealing with a lot of grants that fit these categories and descriptions, it may be prudent to take steps now to conform to the new guidelines. Of course, changes may be made to the recommendations based on feedback received by FASB.

The good news is that the changes do not affect prior quarters in any way, so you don’t need to change anything prior to 2019. For more details, please visit FASB.

About Welter Consulting

Welter Consulting bridges people and technology together for effective solutions for nonprofit organizations. We offer software and services that can help you with your accounting needs. Please contact Welter Consulting at 206-605-3113 for more information.