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Grant Management

Mentoring: It’s Not Just for Kids Anymore

By | Grant Management, Mentoring, Nonprofit | No Comments

If the term “mentoring” calls to mind programs for children and teens, then it’s time to rethink the term. Mentoring is an important activity for all, including executives and managers.

Although mentoring as a concept has been around a long time so that young people could develop their business skills, the concept has now expanded to include managers and executives who seek to improve their skills even at an advanced stage of their career.

Here’s why mentoring is important at all levels of a professional career and how you can embrace a mentoring mindset – and become a mentor or mentee in your profession.

Benefits of Mentoring for Senior-Level Executives

Climbing the corporate ladder of success means mastering challenges on each run before proceeding to the next level. But as you rise to the top, there are fewer peers to share ideas, ask for guidance or clarification, or gather feedback. The expression “it’s lonely at the top” comes to mind.

Mentoring pairs you with someone at or above your level of expertise so that you’re no longer alone. You now have a seasoned professional upon which to bounce ideas, seek input, or ask for help.

Many executives dislike asking for help from their peers within an organization. They may be afraid that asking for help means they are showing weakness as a leader. When your mentor is at the same leadership level as you but works for another organization, the fear of appearing weak evaporates.

Priorities for Executive Mentoring

“But wait,” you may ask, “if I’m an executive, doesn’t that mean that I have mastered the skills I need to do a good job?” Yes, and no.

Executives have clearly mastered many of the skills needed to lead an organization and have gained the trust of others. They may still have blind spots, however. Most executives need help with three areas: delegating, time management, and running effective meetings.

Delegating tasks is a skill many top workers struggle with. They feel it is easier to do a task themselves than to explain and delegate it to others. The problem with this attitude is that you can quickly become overwhelmed with work if you do not have good delegation skills.

Time management is another area many executives need coaching on because they spread themselves too thin. They overbook their schedules or burn out because they do not book any personal or ‘down time’ into their schedules.

Lastly, executives aren’t alone in the struggle to run effective meetings. Running a good meeting is a skill that can be learned. A mentor can coach you through the steps needed to improve your skills in these areas.

Finding a Mentor and Building a Relationship

Mentors can be found among professional associations, business groups, and other groups in which you already participate. Seek someone whose skills you admire and who you believe you can learn from on a regular basis.

Mentors and mentees should meet regularly, such as once a month. Mentors and mentees should establish clear goals, timelines, and milestones to achieve the goals. Expectations and accountabilities should be set for the relationship so that the time spent working together is focused and practical.

A specific plan, especially a written plan of action, helps with accountability issues. So too does meeting face to face. Schedule time to meet together so that it’s in your planner or calendar.

Lastly, be open and receptive to feedback from your mentor. Growth can be painful, and hearing feedback even if it is couched in gentle terms can be difficult.

 

Mentors are no longer relegated to college graduates entering the workplace. Today, executives at all levels know that having a mentor can make all the difference to their careers.

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

Challenges and Solutions for Allocating Indirect Costs

By | Abila, Accounting, Audit, Grant Management, MIP Fund Accounting, Nonprofit | No Comments

Accurate nonprofit financial reporting relies upon proper allocation of indirect costs. Indirect costs can be challenging to place properly, but once they are, they can make a significant impact on your overall budget. More importantly, they add an extra dimension to all reports reviewed by your Board and executive team and can help with budgeting, staffing, and other critical decisions.

Classifying Expenses

Although nonprofits may have multiple expense categories, many expenses actually fall into one of three simple classifications. These include:

  1. Administration: Management and General Administration
  2. Programs: Any programs that support the organization’s mission
  3. Fundraising: The cost of raising funds

Your organization may call them by different names, but upon closer examination, the major expense categories should fit into these areas. Those expenses which can be identified as belonging to one of these three categories can be quickly allocated. Others, however, fall into more of a gray area which cannot be identified with a specific program or budgeting category.

Indirect Cost Allocation and Its Effects

Indirect cost allocation impacts many areas of your organization. It impacts how donors view your organization, for example, by changing the way in which expenses are laid out in your financials. High administrative fees may be unacceptable to some donors.

Indirect costs also impact the budget for programs. If costs seem to be weighing heavily towards one area, that area may get more or less budget for upcoming years.

The allocation also impacts the final percentages that appear on Form 990 for each tax year. These are the numbers that are listed publicly and can impact the public’s view of your organization. Think carefully about how you apportion indirect costs as their ramifications can be long-lasting.

Coming Up with an Indirect Cost Allocation Method

Determining a fair and equitable indirect cost allocation method is a good solution to the problem of items that do not have an easy ‘home’ in your budget line. By examining the methods you have on file to share expenses, you can plan and allocate accordingly.

One method by which you can allocate indirect costs is to estimate what percentage belongs in each major budget line. Let’s assume that an administrative assistant works for both the donor relations and the program area. Which budget should contain his salary? If the assistant supports three people in donor relations and one in programs, then 75% of his salary budget can be allocated to donor relations and 25% to program areas.

Obviously, not every allocation will be this clean and easy. Square footage is one area that can get tricky. For instance, if you rent office space shared by multiple program and departmental areas, determining the percent of costs to be borne by each department can get complicated if many departments share the space. Sometimes, you just have to give it your best guess.

Consistency Is Key

The big thing to remember about allocation is that consistency is the key to successful indirect allocation. Whatever method you choose, put it in writing and file it in accounting and financial documents, plans, and budgets so that it is common knowledge. Then, apply the rules fairly and consistently to the budgeting process. It is this consistency of application that auditors look for to determine if an indirect allocation method is acceptable.

Indirect allocation is a common challenge in the world of nonprofit financial management. Fortunately, it’s one with a solution that makes sense and that can be rolled out fairly easily throughout your organization.

 

 

Financial Transparency

By | Accounting, Audit, Budget, FASB, Grant Management, MIP Fund Accounting, Nonprofit, Uncategorized | No Comments

According to the Merriam-Webster Dictionary, one of the definitions of “transparency” is “characterized by visibility or accessibility of information especially concerning business practices”.  Transparency in your financial statement means it should be user friendly, clear, easily understandable and everything should be properly disclosed.

Importance of transparent financial statements

  • Proactive transparency and communication are essential to organizational success. Stakeholder understanding and support  is a direct result of transparency and open communication.
  • A practice of continuous, transparent communication enables an organization to better respond to crises – such as physical disaster, fraud, or the sudden loss of a leader – and execute more robust crisis communication strategies.
  • Establishing a culture of transparency is critical for effective governance, constituent engagement, and responsive management.
  • Opening communication channels can help to establish meaningful and productive relationships with constituents. These relationships can have a significant impact on long-term performance.

Start with the Stakeholders

Know both internal stakeholders (board, committees, senior management, management team, staff, volunteer workers) and external stakeholders (customers, donors, funders, grantors, creditors, partners, government, public). It is imperative that you understand their needs and expectations. Information needs, communication methods, and information consumption patterns vary substantially from segment to segment. Meeting and exceeding the information needs for each of these groups is critical to delivering satisfaction. 

If that’s too overwhelming, start by identifying your top two to three stakeholders. Determine what they need/want and go from there.

Strategic messages with financial statements

Make the data you have today more understandable and relatable; enhance the story and improve disclosure. When we think about financial statements we think revenue inputs and expense outputs but we need to be thinking more about outcomes.

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.

Mentoring for Accounting Executives

By | Accounting, Audit, Budget, Grant Management, MIP Fund Accounting, Nonprofit | No Comments

Mentoring conjures up images of students clutching diplomas so new the ink isn’t dry yet, but mentoring has a long and venerable history. Centuries before formal higher education became the norm, craftspeople learned their trade by the side of a mentor. Today, mentoring programs help new managers, junior executives, and others improve their leadership, communications, and management skills.

But mentoring isn’t just for junior executives. It’s also for senior-level executives and corporate leaders. Let’s face it: smart people never stop learning. Mentoring programs formalize that concept by pairing strong leaders together so that they can learn, grow, share, and profit from each other’s expertise.

Hallmarks of a Successful Mentoring Program

Successful mentoring programs follow specific guidelines that have proven to be successful. These guidelines include:

  • Meet with your mentor in person: Although it’s tempting for busy executives to revert to telephone meetings, face-to-face meetings seem to be more effective for developing a relationship of trust and mutual support that’s essential for a good mentoring relationship. If you are time pressed (and who isn’t?), schedule coffee, breakfast, or lunch meetings with your mentor once a month. Block out the time on your calendar so that it’s as important as meetings with clients, auditors, and consultants.
  • Determine areas of improvement: During your first meeting, determine several areas you’d like to work on together with your mentor. Limit your objectives to three; anything more than that can be difficult to accomplish, and anything less may be so easy you won’t take it as seriously as you should.
  • Write an action plan: There’s something about writing out your goals, objectives, plans and commitments that make them seem more important than merely discussing them with your mentor. Write out a formal action plan and share it with your mentor for feedback. Establish both benchmarks and methods of measurement; how will you determine if you’ve successfully achieved your goals?
  • Ask for homework: “Homework” in the terms of a mentoring agreement is a list of specific tasks to accomplish before your next meeting. As you meet, share, and reflect on your mentor’s feedback, he or she will provide you with things to do and consider in order to change your approach to problems. This is your homework. Write it down and commit to following through with it.
  • Remain open to feedback: It can be tough for a strong leader or executive to receive feedback. Many leaders are successful people precisely because they are quite good at what they do. But, everyone has room for improvement. It can be difficult not to get defensive when you hear critical comments or suggestions to change how you approach a problem. This is precisely why you’ve agreed to a mentoring relationship with another executive, and it would serve you well to remain open to constructive feedback. A good mentor will sprinkle both praise and criticism in their feedback, but don’t tune out the criticism to bask in the praise!
  • Be honest: Along with remaining open to criticism and feedback, it’s vital to cultivate an open, honest relationship with your mentor. If you are holding back on problems or stumbling blocks, your mentor can’t help you become more successful. Give and receive with an honest, open mind.
  • Follow up: After the initial mentoring period is complete and you have achieved the milestones established in your action plan, set dates for follow-up sessions. You may wish to continue the mentoring relationship or conclude it, but either way, be sure to follow up with your mentor to share progress and achievements.

Finding a Mentor

Mentors are those with equal or greater experience than their mentees. For executives, it can be difficult to find a mentor within their own companies since they are usually at the top of the org chart and the problems they need to discuss may be those they share with other leaders in their organization. An outside perspective cannot be gained by constantly rehashing problems inside your organization. It becomes essential to find a mentor outside of your organization.

Many professional organizations provide mentoring programs. Ask within your own professional groups about mentorship. If they do not have such a group, consider starting one. You may also find mentors within your professional networks online or within civic organizations.

Mentoring isn’t limited to junior staff members. Executives can also benefit from  a mentoring relationship. Learning never stops, and leaders never stop learning.

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.