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Nonprofit

Oct 20
0

Remaining Agile in the Age of Constant Change

By | HR, Nonprofit | No Comments
woman sitting in office, smiling

“Agile” is a loaded term. Some use it to mean the agile development methodology exemplified in the book Scrum, a method of project management that focuses on short, time-bound deliverables. Other people use the term with its common meaning in mind: that of being flexible, adaptable, and responsive to change.

The global pandemic tested most nonprofit organizations’ tolerance for change. We are indeed in the age of agile, given the true meaning of the word: the ability to adapt quickly and moderate behavior based on the circumstances at hand.

How does an organization remain flexible? How can you improve your organization’s ability to respond with speed, efficiency, and grace to ever-changing circumstances? Here are the main traits to focus on when hiring and managing a nonprofit in today’s crazy business climate.

Hire Right—Look for a Cultural Fit

Hiring right—that is, finding the right personnel fit for an open position—is the real secret to remaining agile. That’s because it takes a certain personality to stay open minded and tolerate the continuous uncertainty around business conditions.

Hiring “right,” however, depends upon the organization itself. The right person isn’t just highly qualified for the role to which they are applying; they should be a great fit for the organization’s culture.

Consider this when interviewing applicants. It may be a good idea to have team reviews and interviews with applicants to ensure a cultural fit. For example, if you are hiring someone to lead accounts payable, schedule either a group meeting with the entire accounting team or one-to-one meetings with key accounting personnel. Ask employees afterwards their thoughts on the applicant. Did they seem to click with the team? If so, they may indeed be the right fit for the organization.

When you have people who are a good cultural fit for your nonprofit, they will work easily with the entire group. They likely share similar behaviors and characteristics that will help them adapt to change.

Establish Goals and Priorities

Another way to ensure that your organization is adept at responding to changing conditions is to establish clear goals and priorities. It may seem like a contradiction that having clear, set goals or fixed priorities would support an agile response, but it’s true. The reason is simple: if you establish the goal, but leave the way to the goal open, people can work towards the goal on their own. The external conditions may change, but the goal remains the same, and they can adapt and flex to respond to changing circumstances without losing sight of the objectives.

Accept Change—and Be Open to It

Organizations that accept change as a given in the marketplace are better able to adapt and respond to it. It is the organizations that insist upon enacting their established plans or methodologies regardless of the current circumstances which find themselves struggling.

Being open to change doesn’t mean changing goals and objectives (see the previous paragraph) but it does mean accepting that if something blocks a particular path, there are ways around the block. For example, organizations that depended upon live or in-person events as their big fundraiser for the year found themselves faced with an unforeseen challenge at the height of the pandemic.

Nonprofits and charities that were able to move live galas and events online, adding new features to the event, found themselves with higher donations thanks to the ability to reach a larger audience. Those who simply canceled events, hoping for the best, found themselves left out of the newfound world of virtual events.

Stay Curious

“Stay curious” simply means being open to exploring new ideas as they arise. Instead of remaining fixed on what worked in the past for the organization, employees who remain open and curious about their work are also able to adapt to change more easily. Curiosity feeds exploration, which in turn may open new avenues for creatively meeting challenges and changes head-on.

Change Isn’t Going Away

If the pandemic taught us anything, it is that change really doesn’t go away. Even though our work may appear to be the same day in and out, nothing stays the same. Hiring the right employees who fit well with the culture, focusing on goals rather than process, an openness to change, and remaining curious about solutions are all the right steps to an agile nonprofit organization.

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.

Oct 14
0

The Basics of an Effective Policies and Procedures Manual for Nonprofits

By | Nonprofit | No Comments
binders on desk labeled policies and procedure

When was the last time you updated your organization’s Policies and Procedures manual?

Wait … you don’t have one?

The importance of a Policies and Procedures manual cannot be underestimated. P & P documents help your organization with communication, clarity, and compliance. Without a written manual accessible by all employees, you run the risk of confusion (at best) and legal action against your organization (at worst) for gray areas. Here’s what should go into a P&P manual and how to get started.

Dedicate Time and Effort to Creating the Manual

One thing that often gets in the way of an organization completing and issuing their Policies and Procedures manual is simply time. With budgets stretched thin and staff stretched equally as thin, it’s hard to find the right person to craft the manual or the budget to hire someone to do so.

Look within your human resources or operations teams to begin work on a Policies and Procedures manual. Employees in these departments may have worked on a similar document in a previous company and know what should be included.

If you need a consultant to create one, look for a freelancer or independent contractor who focuses on human resources documentation. Be sure to have someone knowledgeable in the legal and HR requirements included in the manual review of their work.

Start with Existing Documents

To begin the process of creating a Policies and Procedure manual, start with the existing documents at your organization. Such documents may include:

  • Vacation, sick, and paid time off
  • Holiday schedules
  • Work-related guidelines, such as use of equipment
  • Computer and IT documents
  • Others

Gather these documents into one place while you assemble your team.

Brief the Team

Brief the team working on the manual to ensure a shared understanding of why they are working on the manual, the goals, and the process. Then, create a timeline with roles and responsiblities outlined, sections each person should focus on, and deadlines.

What to Include

What to include in your organization’s Policies and Procedures manual may vary from company to company. Ask the board, trustees, staff, consultants, and legal counsel for their input.

As you develop your plan, consider the areas of risk facing your organization. Do you face legal risks from working with the public? Hosting events? Dealing with healthcare issues? Maintaining privacy and confidentiality of constituents facing challenging issues such as mental health, physical health, or other needs? Each item must be addressed in the P & P manual.

Some general areas common to most Policies & Procedures manuals include:

  • Employment procedures from hiring to voluntary or involuntary termination
  • Cash/Accounting procedures such as how to handle revenue, etc.
  • Cybersecurity, device policies, and remote work policies
  • Vacation and paid time off policies
  • Payment procedures
  • Code of Conduct
  • Internal Controls
  • Other areas specific to your organization

As you put together a Policies & Procedures manual, a few considerations:

  • Clear organization and structure of the final manual is essential. A logical sequence of information, good design with clear headlines, and a searchable index for digital documents is essential to help people find the information they need quickly.
  • Minimize heavy blocks of text. Use headlines, subheadlines, and bullet points as much as possible.
  • Better still, use graphics, if possible, to ensure full understanding of the information. Financial policies often benefit from simple workflow graphics to demonstrate how information, resources, or financial materials flow through a system.

Accessibility

Once the final manual is complete, it is a smart idea to have your legal counsel review the final draft. They may be able to suggest edits that clarify areas or add to policies to enhance clarity and compliance.

Lastly, ensure the final document is always accessible to all employees. Keep a link to the digital document prominent, such as on the HR Portal or bookmarked on a company intranet. Employees should never have to hunt for the manual that guides their work. The easier it is to find and use, the better.

Oct 07
0

Remote, Hybrid, and In-Office Work: Are Nonprofits Returning to the Office?

By | Nonprofit | No Comments
people working at table with laptops and papers in an office setting

As more and more companies are urging a return to the office, other companies, including nonprofits, struggle with the decision. It’s not a decision to be taken lightly: over 1 million people have died from COVID 19. Even with vaccinations, the risk remains for some individuals, notably the elderly and those with various health conditions. Determining if or when to require employees to return to the office requires thought and weighing the pros and cons.

Considerations for the Return to In-Person Work

There’s a long list of considerations for organizations to ponder before inviting (or requiring) staff to return to the office. While this list is not exhaustive, it should provide a basis for the ensuing discussions among the senior leadership team at your organization.

Federal, State and Local Health Department Guidelines

Consider the federal, state, and local health department guidelines for COVID-19. In some parts of the country, the pandemic has slowed, but in others, variants are emerging that again cause an increase in the number of ill and hospitalized people. Follow the guidelines for the region in consideration with other aspects of your work.

Nonprofit Constituents

It is vital to protect your constituents’ health, especially if you work with the elderly, immune compromised people, and other at-risk populations. The cost of inadvertently exposing them to COVID via an asymptotic yet infected staff person can be high. It may be better to err on the side of caution and encourage remote or hybrid work for all but essential personnel if your organization serves highly vulnerable populations.

Role within the Organization

The individual’s role within the organization is also a factor in whether mandating a return to work is in order. Does the individual provide hands-on services that can only be delivered in person? Caregivers, doctors, nurses, teachers, childcare workers, and those fulfilling similar duties must, by the nature of their work, meet with constituents and provide services from a central location.

Others, such as operations, accounting, finance, marketing, donor support, and similar roles may be well-suited to remote or hybrid work.

Ask Your Employees

Lastly, be sure to ask your employees how they feel about returning to in-person work. Listen to their concerns. Ask questions. Be prepared to explore their fears and apprehensions. Keep an open mind about how to approach such conversations without shame, blame, or pressure on anyone. Everyone wants the same thing: for the organization, its employees, and constituents to thrive. Engaging your teams in conversation about the return to work is a thoughtful and considerate way to include them in the decision.

Ensure Full Controls and Safeguards Remain in Place

No matter which model you choose—remote, hybrid, or in-person—keep all the safeguards, internal controls, and similar security measures you implemented during the pandemic. This includes:

  1. Secure cloud-based systems for accounting, finance, donor, marketing, and operational tasks
  2. Internal controls that guide the handling of all financial matters
  3. Guidelines for employees on the use of technology, whether using their own devices or taking authorized devices home for work

Among these, we cannot emphasize enough the importance of full security measures for any technology utilized by employees. Employees working remotely may log in from a relatively safe and secure home office or they may take their laptop to a café with a shared public Wi-Fi. You never know how they will be using their system and interfacing with your organization’s technology. Some access points are more vulnerable to hacking, attacks, password theft, and so on. Guidelines are important, but so too is a good cloud-based system that protects against many common cyber-attacks.

The choice of whether to return to in-person work is a personal one both for your organization and its employees. Take your time, consider the interests of all, and make the decision that’s best for you and your organization’s future.

Sep 30
0

SEFA: What You Need to Know About Federal Expenditures

By | Audit, Nonprofit | No Comments
woman looking at paperwork in front of a laptop at desk

Is your nonprofit subject to a Schedule of Expenditures of Federal Awards (SEFA)?

Over the past several years, many nonprofits availed themselves of federal grants. These funds may have been related to the pandemic relief programs or separate programs intended to support the work of nonprofits. However, the increase in federal grant programs, and the number of nonprofits tapping into them, may mean that your organization is now subject to the Single Audit. To determine whether you now complete a Single Audit, you should first complete the SEFA.

What Is SEFA?

SEFA is a separate document required as part of an audited financial statement. It may be presented in the accrual or cash-based method of accounting.

If federal grants total more than $75,000 over an organization’s fiscal year, the organization is then subject to the Single Audit. SEFA must be completed as part of the Code of Uniform Guidance.

What should be included in the SEFA? According to the guidelines, federal expenditures to be included should be based on when the federal award is considered “expended.”

Determining which funds should be included is a bit more complex than looking over your awards and determining which came from federal sources. The Uniform Guidelines categorize the following to be included:

  • Grants
  • Cost-based Contracts under Federal Acquisition Regulations (FAR)
  • Cooperative Agreements
  • Direct Appropriations

Loans and Loan Guarantees

Loans and loan guarantees should also be considered under SEFA. The basis of determining them may be found in 2 CFR Part 200.502 as:

  • Value of new loans made or received during the audit period; plus
  • Beginning of the audit period balance of loans from previous years for which the federal government imposes continuing compliance requirements; plus
  • Any interest subsidy, cash, or administrative cost allowance received

Donated Personal Protective Equipment (PPE)

If your organization received a donation of PPE, you must account for its value. Calculate the fair market value at the time of the donation and include it as a footnote on the SEFA.

Note that the amount of the donated PPE should not count towards the determination of a Single Audit.

Donated Property and Donated Food

Donated property and food follow similar guidelines to PPE. The fair market value should be calculated at the time of the donation.

Determining Receipt of Income

The receipt of income date is determined for the SEFA by assessing the date by which the income from a federal source was received or used by the program.

Endowment Funds

Endowment funds from federal sources should be reported on the SEFA at the cumulative year-end balance if the restriction applies.

Medicare and Medicaid

Check with your state’s regulations or consult with a nonprofit accountant. In many cases, Medicare and Medicaid funding is not counted towards SEFA calculations. However, state guidelines may make your state an exception to the rule.

Presenting the SEFA

To ensure clarity and transparency, it is vital to report the information on the SEFA according to the Uniform Guidelines. The Guidelines specify that organizations should list each individual federal program by federal agency, and you can group a cluster of programs together. You must also note the name of any passthrough entities and identifying numbers if the organization received funds through a passthrough entity. The same applies if your organization passes funds through to another entity—you’ll be required to provide the total amounts provided to each subrecipient.

The totals on the SEFA are required for each federal program and Assistance Listing (AL) number (formerly the Catalog of Domestic Assistance, CFDA). If the AL number is not available, organizations can use another identifying number. Each cluster reported on the SEFA must also provide a total.

Lastly, footnotes: yes, they’re required. Nonprofits must disclose the outstanding balance of any loan and loan guarantees reported on the SEFA as of the end of the audit period. Additionally, organizations are required to disclose whether they utilized the de minimis indirect recovery during the year.

AICPA provides a checklist to help guide you through the complexities of SEFA preparation.

Preparing the SEFA properly requires a great deal of time and attention to detail, not to mention nonprofit accounting expertise. We highly recommend contacting us for assistance to ensure full compliance and the best preparation of these important documents.