Monthly Archives

February 2025

Feb 20
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Signed Executive Orders That Nonprofits Need to Know

By | Nonprofit | No Comments
Signed Executive Orders That Nonprofits Need to Know

The official formalities were barely over when President Donald Trump signed a flurry of executive orders (EO), many of which reversed Biden administration policies impacting nonprofits. Below, we share details of key EOs of the new administration. We recommend that you explore the ones applicable to your organization and consult with your team on the steps you need to take in response.

Bear in mind that this is a fluid, evolving situation. There are already legal challenges to some of the EOs, which may or may not put them on hold. It would be prudent to watch the news and set up Google Alerts for specific topics and EOs that impact your organization so you can track the current status.

Diversity, Equity, and Inclusion Rescinded

Trump’s newly signed executive orders reversed Biden’s EOs and memorandums, including those directly related to diversity, equity, and inclusion initiatives. The most significant impact will be on federal programs. Under the Biden administration, three EOs expanded DEI in federal programs. Trump has reversed this policy even though these orders stood up to court challenges.

A related Executive Order from Trump has directed the Office of Management and Budget and the Office of Personnel Management to coordinate with all federal agencies to terminate DEI programs in federal agencies, including equity-related grants and equity action plans. Although private sector DEI grants are currently unaffected, this may change soon as the administration has indicated a willingness to change these as well.

Immigration and Birthright Citizenship

Birthright citizenship was granted as part of the 14th Amendment to the United States Constitution in 1868. It was enacted to ensure enslaved people born in the United States could be granted full citizenship. The interpretation of this Amendment has been expanded over the years to include any children born on American soil, including children born to non-citizen mothers or fathers. The new EO seeks to end this right and make children born of non-citizen parents, even if such children are born on American soil, not U.S. citizens. The American Civil Liberties Union (ACLU) has already challenged this highly controversial EO in court. Many law scholars also believe the EO is unconstitutional.

Additionally, President Trump issued a sweeping executive order entitled “Protecting the American People Against Invasion.” This order directs relevant federal agencies to remove undocumented immigrants from the country, create statewide Homeland Security Task Forces and detention centers, identify all “unregistered illegal aliens,” block federal funding to sanctuary cities, and ensure that undocumented immigrants do not receive any public benefits.

Executive Order Potentially Impacting Government Contracting

President Trump also signed executive orders to mandate that federal workers return to full-time, in-person work, implement a federal hiring freeze, and change the federal workforce, allowing career employees to be more easily fired for “insubordination.” Additionally, these orders remove pay transparency and equity requirements for federal workers, contractors, and subcontractors and freeze any outstanding regulations pending review.

Census

Trump also rescinded Executive Order 13986: Ensuring a Lawful and Accurate Enumeration and Apportionment Pursuant to the Decennial Census. This EO required all persons, regardless of citizenship or immigration status, to be counted in the Census. The National Council of Nonprofits previously submitted an amicus brief when this issue was heard by the U.S. Supreme Court for the 2020 Census.

More Executive Orders to Come

It seems like every day another flood of orders comes from the new administration that changes or reverses the previous administration’s orders. Other EOs issued by the Trump Administration include removing the United States from WHO, the Paris Climate Accords, changing EV vehicle mandates, and more. More are expected to come in the days and weeks to follow.

Nonprofits: Watch and Prepare

If your organization relies upon federal funding, it is vital to assess these EOs as they are announced for any possible impact on your organization. The new Department of Government Efficiency (DOGE) is examining grants, funds, and expenditures and suggesting cuts to save money. Freezes on funds are imminent and the list of possible freezes changes daily. The legality of many EOs has been challenged and court briefs filed. Watch the news and prepare your organization as best as you can by monitoring the situation and discussing the potential ramifications of these changes, especially to your services and budget.

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 us for more information.

Feb 18
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Budgets Evolve, and That’s Okay

By | Accounting, Accounting Software, Budget, Nonprofit | No Comments
Budgets Evolve, and That’s Okay

It’s a strange but true statement: your budget will never be “right.” You’ll be over budgeted on some items and under-resourced on others. Predicted income will exceed expectations, or there will be a shortfall. Unexpected expenses mount on specific projects.

And all of this is okay. Budgets evolve, and that’s not only okay, it’s also expected. Here’s why budgeting should be viewed more as a business planning activity and less a “once and done” accounting function. Thinking strategically about budgeting and planning and working all year long with your budget as a business tool, will help your organization thrive.

Budgeting as a Business Planning Activity

Many people think of budgets as the purview of the accounting department. The best budgeting process, however, is collaborative. Program managers should work with the accounting team to analyze their budgets. The ensuing discussion around budget items should encourage reflection and analysis about program activities, focusing on those that support the organization’s mission and margin-generating activities.

For example, as you plan the annual budget, you may find that some program activities performed below expectations. Reviewing the data together, accounting and program leaders can decide if continuing the program makes sense or whether it should be changed in some way. Sitting down together to review the budget opens the door to important conversations that can lead to significant improvements. This reflection process is a healthy part of business planning and goes beyond financial planning.

Best Practices for Nonprofit Budgets

Budgets are “living documents.” This means that they grow and change over time. A good budgeting process allows for flexibility. Part of sound budgeting practices is regularly checking budgets and updating them based on the available data.

Here are some best practices for checking and updating nonprofit budgets:

  1. Regular Review: Schedule regular budget reviews with program areas, such as monthly or quarterly reviews, to compare actual income and expenses against the budget. This helps identify any discrepancies and allows for timely adjustments.
  2. Adjust for Changes: Be flexible and ready to amend the budget as needed. Financial positions can change throughout the year, so it’s important to update the budget to reflect new realities.
  3. Track Cash Flow: Monitor cash flow closely to ensure the organization has enough funds to cover expenses. This includes tracking both incoming and outgoing cash.
  4. Use Technology: Utilize budgeting software and tools to streamline the process and improve accuracy. These tools can help automate calculations and provide real-time data.
  5. Document Assumptions: Clearly document the assumptions made during the budgeting process. This helps with understanding the basis of the budget and makes it easier to explain any variances.
  6. Plan for Contingencies: Include contingency plans in the budget to account for unexpected expenses or changes in funding. This ensures the organization is prepared for any financial surprises.
  7. Communicate Regularly: Keep open lines of communication with all stakeholders about the budget status and any changes. Transparency helps build trust and ensures everyone is on the same page.

By following these best practices, nonprofits can maintain a healthy financial position and effectively manage their resources.

As you can see, budgets aren’t once and done. They evolve. Frequent feedback, adjustments, and discussions allow for much-needed planning and flexibility that helps an organization succeed.

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 us for more information.

Feb 14
0

Using Data and Analytics to Improve CFO Decision-Making

By | Accounting, Accounting Software, Nonprofit | No Comments
Using Data and Analytics to Improve CFO Decision-Making

The CFO’s role is constantly evolving, with an increasing reliance upon data for decision-making. CFOs have always been data-driven, using economic and organizational data to shape their recommendations. However, with the advent of advanced technology, including nonprofit accounting systems, integrated donor and grant management portals, AI enhancements, and other enhancements, CFOs now have many resources at their fingertips for data-driven decision-making. Here are some factors impacting data use for CFOs, as well as various tools and platforms that enable better data use. 

The Continuing Accounting Talent Shortage

We’ve written before about the accounting talent shortage. Fewer people are choosing accounting majors in college, shrinking the available resources pool. With fewer junior-level accountants entering the workforce, there are fewer people rising through the ranks to the CFO chair. Kiplinger calls it the “graying” of the accounting workforce as the more seasoned professionals reach retirement age, with insufficient young recruits to replace them. 

Even though it is becoming harder to fill vacancies in the accounting department, newer technologies are filling some of the gaps. Automation tools built into existing accounting systems can route approvals, invoices, and reminders efficiently, saving a great deal of time. AI enhancements are also able to find information quickly thanks to AI’s inherent ability to parse large quantities of data. And many modern accounting platforms have robust reporting capabilities, which enable the CFO to generate much-needed reports without exporting data and manipulating it in spreadsheets. Although each of these time-savers seems small in comparison to the workload of a CFO, they add up, making it easier to gather data and derive useful information from it. 

Unified Systems for 360-Degree Visibility

Unified or integrated systems are necessary for today’s data-driven nonprofit. Systems that ‘talk’ to one another can share data across platforms to provide users with 360-degree visibility into their data. Consider a nonprofit accounting system that exchanges data with customer and donor relationship management software, grant and funding software, and similar platforms. The reports generated through such systems contain rich, robust data that significantly improves decision-making. 

Of all the tools in the CFO’s arsenal, having data visibility and integrated systems is the key to using data wisely and making data-driven decisions. When systems are integrated, they provide robust reports that CFOs can analyze to make decisions. Instead of generating separate reports from multiple systems and comparing them manually, or extracting data and manipulating it in spreadsheets, the CFO can access data quickly and efficiently. 

Managing Risk Through Data

CFOs must assess risk to the organization’s financial health. But this can be challenging without accurate and timely data. Newer technologies including cloud platforms ensure that system data is accurate and timely. Integrating these systems with other data points, such as economic, demographic, and other forecasts, provide the enhancements that CFOs need to assess risk and develop appropriate what-if scenarios and recommendations. 

Leveraging Technology for Better Decision-Making

As you can see, technology is the key to improving efficiency and clarity with which CFOs can make decisions. Data flowing freely through integrated systems ensures that the CFO has the insight and transparency needed to make data-based decisions. The right systems, adequately integrated, make this possible. 

What if the right systems are lacking? Then, planning, budgeting, and exploring new technologies should be on the organization’s task list for the new year. CFOs must have accurate, timely, and complete data to make decisions crucial for an organization’s success. This is another reason CFOs must be part of the selection committee for new software. Not only are many decisions made with the data captured by the software, but the software itself can help CFOs in their role as analysts, planners, and forecasters. 

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 us for more information.