Nonprofit

Nonprofit leaders know the importance of performing an annual internal audit. But do you know the importance of adding a cyber security audit to your financial audit?

Travelers insurance puts the cost of a data breach in a nonprofit organization at $221 per record, which doesn’t sound like much until you count up the number of potential records in your nonprofit’s files. Then you realize the eye-opening fact that you could be on the hook for thousands, perhaps millions, of dollars in damages should hackers get into your records.

But the cost to your organization doesn’t stop at monetary damages. There’s also the loss of trust, which is invaluable. It may take years to rebuild the trust damaged by a data breach.

Now you understand why it is critical to tighten up your cyber security. What better time to do so than when you perform an internal audit?

What Nonprofits Need to Know – and Do – to Improve Cyber Security

As you prepare for your organization’s internal audit, it’s a good idea to schedule a cyber security audit. Board members who meet to review the financial audit may also wish to review the findings from a cyber security audit so they can make decisions related to its findings.

To conduct your own cyber security audit, here are several suggestions.

1. Review current cyber security plans: Depending on your role within the organization, you may be well aware of any plans in place to protect against or respond to a cyber threat. As your first step, take time to speak with your IT manager, CIO, or other technology leader. Ask all department heads to provide you with any information they have on cyber protection, training, or risk management. Once you have all the information, you can make a good assessment of what is being done to protect against cyber threats.
2. Contact third party vendors: Third-party vendors who receive or manage any data from your organization should also provide you with details on what they are doing to prevent security threats. This includes the obvious providers such as cloud software providers but the not-so-obvious ones as well, like your mailing house, which addresses and sends donation solicitations, catalogs, and other direct mail. Other vendors may include the company you use for your email list management, website hosting, and similar third party vendors.

Once you’ve reviewed both internal and external security processes and precautions, you can make an educated guess as to your risk level.

What Next?

If you were buying a home, you’d want to know if it’s in a flood zone so you could assess the risk of flood damage and the need to purchase flood insurance protection. The same goes with cyber security threats; once you understand the potential risk and your organization’s specific vulnerabilities, you can take steps to protect against threats.

Some steps to take may include:

• Implementing internal security controls over software and technology services. This may include authorizing only IT staff to download software, updating and enhancing virus protection, and keeping databases behind a secure firewall.
• Requesting that all vendors provide you with security plans and protection, if possible, or at least an understanding of their security protocols.
• Training your internal teams on how to spot phishing schemes and preventing common cyber fraud and crimes.
• Finding a cyber security expert to work with or retaining a consultant in the event a breach occurs.
• Purchasing cyber insurance for your nonprofit, a policy which would protect against financial damages and technology repairs in the event a cybercrime occurs.

The time to take steps against cybercrime is now, before it happens. You have strong locks on the doors of your office to prevent thieves from stealing your computers. Do you have similar “locks” on your data?

Welter Consulting

Welter Consulting bridges nonprofits and solutions to help them find technology that works for them. We invite you to contact us for any assistance you need with nonprofit technology and business solutions. Call 206-605-3113 or contact us.

Everything looks rosy from the outside. The finance department, however, has trouble brewing just under the surface. How can you tell? Welter Consulting has the experience to see and fix problems where they start. The finance department of a nonprofit is often the most overlooked place. After all, it’s all about the mission – right?

Well, yes and no. Nonprofits need margin to achieve their mission: no margin, no mission, no nonprofit. The finance department is the team charged with planning and managing the financial resources of the organization. Without a well-run finance department, there will not be enough capital to run all of the programs, services, and other activities for the organization.

There are certain telltale signs of dysfunction in the financial department that we’ve learned to spot over the years. We also work with teams to identify problems and help them fix them.

Sign #1:  Unclear roles and responsibilities

Suzy handles accounts payable and any incoming checks, but John is the accounts receivable clerk. Oh, and he’s also in charge of petty cash and updating the finance software because he’s good with computers.

If that sounds like a mess, it’s because it is. Over time, many nonprofits find that roles and responsibilities shift and change. Instead of aligning people and roles, people are allowed to assume various roles according to their time and talents. New skills needed for the finance department, such as John’s penchant with computers, end up glommed onto current roles without rhyme or reason, except that the original person who agreed to accept the task liked the idea of it.

Unclear roles and responsibilities can cause many problems. If roles aren’t clear, it is hard to hold people accountable for them. This leads to blame and finger pointing, open-ended tasks, and lack of accountability.

To fix this problem, conduct annual reviews of job descriptions. Ask employees to update their job descriptions so that any new tasks they may have taken on during the year can be evaluated in light of their role within the organization. Once you get the big picture of who does what, you can determine if a new position should be created or if some other type of change is warranted.

Sign #2: Multiple General Ledger Accounts

This one makes our heads hurt: when a company ends up with multiple GL accounts because the GL isn’t set up to sort items the way the organization needs them. We’ve seen this happen when nonprofits attempt to force software from the for-profit industry to work for their needs; it’s a square peg, round-hole type of problem, and the fix often involves multiple GL accounts so that the final reckoning matches what the nonprofit needs. Unfortunately, what happens is a confused muddle of accounting that takes longer to untangle than it does to work with it on a productive basis.

Welter Consulting can help. We can match you with nonprofit software that works with your needs, not against them. And, because we have experience in the nonprofit financial and accounting world, we can straighten out your GL too and help you sort through any other accounting muddles created by ill-matched accounting software and needs.

Sign #3: Manual Processes

The computer sits right on the desk, with the accounting software open. The payables clerk writes paper-based checks. “It’s just easier,” she said.

It may feel more comfortable, but there’s the time spent entering the checks back into the accounting system, reconciling the bank account and everything else associated with paper checks, not to mention the time it takes to mail them. And the postage – did you know that the cost of first-class mail is once again going up?

Many nonprofits fail to utilize the technology available to them. We can help. We work with nonprofits to provide training and guidance on how to use existing technology, how to boost productivity through efficiency and better systems, and more.

Sign #4: Manual Reports and Spreadsheets

You have the computer programs; you have the data. But you’re still pulling data from the accounting program, importing it into a spreadsheet program, and manipulating it there to obtain the reports that you desire.

Sounds familiar? This is quite common but entirely avoidable. Most accounting programs for nonprofits offer robust reporting capabilities. If you’re not obtaining the reports that you need from your current system, it’s time to investigate new ones.

Spreadsheets are fine when you’re starting, but as your nonprofit grows, they are time-consuming and error-prone. Automated reports offer convenience, accuracy, and flexibility – if you have the right system!

Welter Consulting can help. We bridge the gap between people and technology and specialize in the world of nonprofits. Let’s discuss your reporting needs and find the right software for you. It’s faster and better than using spreadsheets, that’s for sure.

Sign #5: Lack of Goals and Objectives

Does your financial team have clear goals and objectives? You may have them within the department but lack alignment with organizational goals.

Yes, it’s great that you have your own team goals, but how do these align with everyone else’s? Consider the impact that financial knowledge makes on other departments. The more you share information, the better off everyone will be throughout the organization. Aligning your goals and priorities with the overall goals of the organization and ensuring that financial goals are part of every department’s objectives, as well as sharing the organization’s economic outlook with other departments, helps align the finances with the activities and vice-versa.

Do you need some help with establishing goals and objectives? We offer comprehensive business management and support for nonprofits and can help you develop goals, share financial data, and more. Training, audit support, and other nonprofit financial and technology services are also available.

Yes, there are signs that the finance department needs help. Fortunately, the fixes are at your fingertips, and if you need assistance, we’re only a phone call away.

Call 206-605-3113 or contact us.

We hear a lot about leadership these days. Types of leadership, failures of leadership…but what does it actually take to be a successful leader, especially in the world of nonprofits?

A recent GuideStar article profiles three nonprofit leaders: Nora Moreno Cargie, Karen Voci, and Audrey Shelto. All three lead not-for-profit health plans. Some came from for-profit backgrounds. All are thriving in the world of nonprofit leadership.

Lessons from the Leaders

What’s so unusual about these three leaders isn’t their backgrounds but the level of collaboration and communication among them. Here are five facts about these leaders and what we can learn from their success at the helm of their nonprofits.

1. Successful leaders collaborate: Nora, Karen, and Audrey prefer collaboration with one another to competition. While they could view each other’s nonprofit as a competitor, instead, they view each other’s organization as an opportunity to learn. They meet regularly with one another and exchange ideas as well as support.
2. Servant leadership works: The notion of servant leadership, or a leader who is the servant of their employees, sounds far-fetched, but it can and does work. Several of these leaders embrace a servant leadership mindset and find it works very well in their nonprofit cultures.
3. Honesty and directness gain respect: Another characteristic of these three nonprofit leaders is their honesty, directness, and forthrightness when it comes to communicating with their teams. None of these people pull punches when it comes to disseminating information or speaking to their organizations. And, as a result, they command a great deal of respect. Leaders often assume they must only communicate what others want to hear, but these three leaders demonstrate that honesty often gains more respect than prevarication when it comes to leadership. People want to hear the truth from their leaders and respect those who offer it.
4. Seek new solutions: It’s easy to get locked into the status quo. Those who become great leaders remain open to new ideas and possibilities. These three leaders keep an open mind and often seek new solutions in unexpected places. Instead of remaining content with the existing paradigm, they always strive to improve their organizations in every way.
5. Lift people up – don’t put people down. Lastly, these leaders know that in order to succeed, you have to lift people up; that means supporting coworkers, colleagues, and teams. It means expanding the organization’s mission to embrace a vision which extends beyond the immediate or obvious. Vocci, for example, expanded the organization to encompass regional health initiatives and healthy living advocacy. Although not necessarily part of a health plan’s work, it supports a broader goal that aligns with the overarching mission of the organization.

Top Leaders, Top Thinkers

All three of the leaders profiles by GuideStar aren’t just top leaders, they are also top thinkers. They lead with their heads but include their hearts, often comparing ideas with one another. They also know that all work and no play makes for a dull C-suite executive. They find time to network over meals and even take in the occasional play together.

The result? Three leaders, passionate about what they do and well respected in their organizations. They’re taking their organizations to new places and new successes. Collaboration, communication, and strong leadership along with intelligence and drive are a potent combination for nonprofit success.

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.