May 14
0

Understanding AI: A Guide for Nonprofits

By | Nonprofit | No Comments
person at laptop with AI overlay

Artificial intelligence (AI) seems to be everywhere these days. Whether it’s a featured news story or a new platform offering the latest and greatest in AI automations, this technological advancement is changing nearly every facet of business. And that includes how nonprofit organizations manage everything from fundraising to writing job descriptions.

With 58% of nonprofits stating that they are using AI as part of their communications and 68% using it for data analysis, AI has every indication of becoming a standard productivity tool for organizations. Here’s what your nonprofit needs to know about AI: what it is and how to use it safely and effectively.

What Is AI?

AI, or artificial intelligence, is a computer program that gives machines the ability to mimic human thinking. AI-based programs excel at analyzing data, processing information, and drawing conclusions.

Machine learning is a term often coupled with AI. Machine learning refers to the process by which an AI tool incorporates new information or “learns” from the questions, feedback, and information fed into the model. The two terms, AI and machine learning, are not synonymous, but are often used together (AI/ML) to distinguish the newer type of AI, called generative AI, from another model called predictive AI.

GenAI versus Predictive AI

If generative AI uses machine learning to generate new responses, what is predictive AI? As the name suggests, this AI model is often used to analyze data patterns and predict action based on patterns.

 A good example of predictive AI is found on large retail websites. This is how websites analyze your search terms and patterns, or previous purchases, and suggest other products you might like. That’s predictive AI in action.

Another example is right at your fingertips – your smartphone. If you’re texting and the phone “suggests” words or phrases, inviting you to tap to fill them into your note, it’s using predictive AI to guess your next word or phrase.

AI Tools for Nonprofits

It may be helpful to think of AI as another coworker, albeit one that doesn’t take the last donut in the break room. AI cannot replace people, but it can perform many tasks. Some programs that incorporate useful AI tools that nonprofits may wish to test include:

  • ChatGPT, Microsoft Copilot, or Gemini: These tools can draft simple text and offer suggestions to improve existing text. You can use them to help craft social media messages, emails, or reports. (Please note: never use “free” versions of these tools for confidential or proprietary company information. Only the paid versions keep the information ingested into the AI private. Others incorporate the data into their machine learning repository, potentially exposing confidential data.)
  • Grammarly: Grammarly is a great tool to help you polish written drafts. It checks grammar and spelling but also offers feedback to improve clarity. It can also be added as an extension to Google Chrome and seamlessly provide feedback when you’re working on Google Docs.
  • Canva: Do you do your own graphic design? Canva is an easy-to-use design program that offers templates for everything from flyers to social media posts. You can upload your logo and brand colors to a folder and keep them handy for use. The AI tools within Canva provide a free AI image generator, and its AI suggestion tool can be used to improve designs.
  • Donor Search AI: Remember how great AI is at analyzing data to find patterns? Donor Search AI uses this principle to improve your donor outreach efforts. It analyzes response patterns, campaigns, and more to recommend the best time for donation campaigns. Other tools found within the Donor Search suite help with fundraising and channel communications.

Which AI Tools Should You Choose?

The list above only scratches the surface of what’s available. New tools seem to arrive daily, with more and more designed for nonprofits. Select the AI platform that helps your organization achieve its goals. As we said at the start of this article, think of AI as a coworker. If you could hire another person, what would that person do? Graphic design, donor campaigns, or something else? That will help point the way to the best platforms for your organization to invest in to maximize the potential of AI.

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.

May 09
0

What You Need to Know About Executive Orders

By | Corporate Culture, Nonprofit | No Comments
Executive Orders

While President Trump may not have signed the most Executive Orders out of all U.S. Presidents (that honor goes to Franklin D. Roosevelt), he has certainly made headlines with a flurry of orders limiting funds to various organizations, including institutions of higher learning and organizations funding nonprofits. If you are following the news closely, you know that it can be challenging to sort myth from fact when it comes to the impact of Executive Orders. Here, we sort through how these orders impact nonprofits, and what the President can—and cannot—do with the stroke of a pen.

Executive Orders Cannot Limit or End 501(c)(3) Status

One persistent myth is that the President, via an Executive Order, can limit or end an organization’s 501(c)(3) status. This is definitely a myth; the IRS governs 501(c)(3) status, and any changes to the rules regarding this must pass through a vote of Congress.

So, although the president may limit funds designated for organizations, he cannot strip that organization of its nonprofit status for any reason, including its adherence to diversity, equity, and inclusion policies.

DOGE May Investigate Nonprofits Receiving Federal Funding

Another rumor circulating in the nonprofit world is that DOGE, or the Department of Government Efficiency, may begin investigating nonprofits that receive federal funding. This is unproven but could potentially be true in the upcoming months.

Blocks on Grants to Organizations That Focus on International Issues

Washington State has a high percentage of nonprofits that focus on international issues. There are rumors that the President will sign an Executive Order blocking funding from such organizations. If your organization’s mission encompasses such work, it is vital to watch the news and watch for any such orders that may impact your work. You may also wish to get involved now to make your feelings known (see the end of this article for action steps you can take to make your voice heard).

Orders Targeting Specific Nonprofits

Other orders may be coming that target specific nonprofits, including those linked to climate change activities and specific organizations named by the President, such as the Gates Foundation, the Ford Foundation, and others.

What You Can Do

If you are reading this and researching other Executive Orders that may impact your organization, you may feel frightened or helpless. What can you do to protect your organization, its funding, and its mission?

You can take several steps:

  • Sign an open letter to the President: Coordinated by the National Council of Nonprofits, Public Citizen, State Democracy Defenders Fund, Leadership Conference on Civil and Human Rights, ACLU, and Americans Against Government Censorship, this letter states unequivocally that the President should not have the power to punish nonprofits based on ideological beliefs. You can find the letter here: An Open Letter Rejecting Presidential Attacks on Nonprofit Organizations.
  • Contact Your Congressional Representative: You can contact your representatives and make your feelings known about the impact these Executive Orders may have on the non-profit sector and your organization. Find Your Representative.
  • Prepare Now: Watch this video and read articles such as this one from the Nonprofit Quarterly on how nonprofits can prepare for changes due to Executive Orders.

It is unfortunate that nonprofits must prepare for situations in which their livelihood may be threatened, but this is the reality we are dealing with. Now is the time to understand the rapid changes at the government level and take steps to prepare for any potential impacts on your 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 us for more information.

Apr 24
0

Best Practices for Nonprofit Excellence, Part 2: Finances and Fundraising

By | Accounting, Fundraising, Fundraising Software, Nonprofit | No Comments
meeting with a person up front talking to others seated at table, finances and fundraising

Welcome to Part 2 of our series of best practices for nonprofit excellence—finances and fundraising. Without enough margin, you won’t be able to fulfill your organization’s mission. That’s why learning about the best practices in finance and fundraising goes hand in hand, because it’s not just money in (fundraising) but managing that money (finance) that ensures a robust budget for a nonprofit.

Nonprofit Financial Management Best Practices

Donors, members, and granting institutions have entrusted funds to your organization so that it may carry out its mission. These gifts represent trust – trust in your nonprofit, its management team, employees, volunteers, and board. To win and keep this trust, you must use nonprofit financial management best practices.

Budgeting

Of course, you are using best practices for budgets, including updating the budget periodically. The board should review the annual budget and discuss any questions or concerns with leadership. It’s important that the board fully understands how the organization derived its numbers and how the expenditures relate to achieving program—or organization-wide goals.

Internal Controls

Another financial management best practice is to ensure the organization has good internal controls in place. These controls involve implementing measures such as segregation of duties, where different individuals handle recording, approving, and reconciling transactions to prevent errors and fraud. Nonprofits should also establish clear policies for financial authorization, requiring approvals for significant transactions to maintain accountability.

Regular reconciliations of financial records, such as bank statements, with internal accounts help identify discrepancies early. Additionally, conducting periodic audits—both internal and external—can ensure adherence to established policies and uncover potential issues. By safeguarding assets, maintaining accurate financial records, and upholding industry standards, nonprofits can foster stakeholder trust and effectively pursue their mission.

Financial Management Software

Another best practice is to have good nonprofit accounting software. This system can save a great deal of time and effort by accurately tracking revenue, expenses, payroll, and more. The reporting features found in nonprofit accounting software also make it easy to generate reports you can share with the board and donors for clear and transparent communications. If you’re currently managing your finances using spreadsheets or small business software, you’ll find switching to nonprofit accounting software like night and day in terms of its efficiency and usefulness. Adopting nonprofit accounting software is definitely a best practice to incorporate into your organization.

Fundraising Best Practices

There’s more to fundraising than promotion. Fundraising should also include processes, procedures, and guidelines about how funds are raised, acceptable contributions, and how to handle gifts in kind.

Transparency and Accountability in Fundraising

A few years ago, several nonprofits made the news for high overhead spending. Their overhead and fundraising costs seemed to the public like an extravagance. However, the public’s negative reaction was probably based more on lack of transparency than on expenditures. Always be transparent with the public about your expenses: share reports and updates with the board, donors, members, and the public. This level of accountability demonstrates a high degree of trustworthiness as well as good financial stewardship.

Pay Your Fundraisers

If your organization subcontracts fundraising to an external person or company, always pay them a reasonable fee. Do not offer a percentage of money raised as their payment. It is considered a best practice to pay directly for these services rather than to ask the subcontractor to take a percentage of the gross.

Monitor Fundraising Practices

One best practice often overlooked among nonprofits is to monitor fundraising activities and ensure that you follow all the required rules and regulations for your state. These vary according to where your nonprofit is registered, so take time to understand them. For example, in Washington state, if you are using a commercial fundraiser, the relationship must be disclosed in your fundraising materials. Fundraisers must also follow additional requirements for phone solicitations, mass distributions, and collection containers or vending machines to ensure accountability and compliance with state regulations.

Ready to Implement Best Practices?

It may seem overwhelming to read articles like Part 1 and Part 2 in our series and see so many areas for improvement. Every organization has some areas to improve. Choose your starting point on the area that will experience the greatest impact from the changes. Whether it’s improving transparency with the public about your expenditures or exploring nonprofit accounting software, making big changes starts with today’s small step. 

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.

Apr 22
0

Best Practices for Nonprofit Excellence, Part 1: Governance and Accountability

By | Accounting, Nonprofit | No Comments
person at laptop and holding a tablet - nonprofit and other for overlay, finance and accountability

Welcome to the first in a two-part series where we will examine best practices for nonprofit excellence. In our first article, we’ll look at governance and accountability. Then, in Part 2, we’ll examine Financial Management and Fundraising.

Governance and Accountability Best Practices

Nonprofit boards of directors are stewards and guides of the organization’s direction and finances. They set policy and should actively support the organization’s mission by approving adequate funding, providing direct oversight to leadership, and evaluating the effectiveness of the organization’s programs and how well these programs achieve its mission.

Choose Board Members Carefully

However, the effectiveness of a board depends upon its members. There are several best practices for developing strong, effective, committed nonprofit boards. These practices include recruiting board members who reflect the constituency you serve. While the entire board may not be a perfect reflection of your constituency, it should at least reflect the majority of the people you serve.

You should also strive to find board members who are as deeply committed to your mission as you are. Board members should have a passion for your organization’s work.

Board Responsibilities

Board members should have a comprehensive understanding of their roles and responsibilities to the organization and the public. This can be achieved by providing a clear set of expectations and responsibilities, access to bylaws, articles, and other key organizational documents, an introduction to the organization’s work, and continuous opportunities to engage in discussions and review their duties.

Members must also fully comprehend their legal and fiduciary responsibilities, ensuring the effective execution of their duties in key areas. These include strategic planning, policy approval and periodic review, annual evaluation of the executive director’s performance and compensation, succession planning, determination of compensation structures, preparation of annual budgets and revenue plans, oversight of financial procedures, management of risks, and compliance with nonprofit financial filings and regulations.

Governance Frameworks

Boards should convene at least six meetings annually and expect regular attendance from members. A consistent meeting schedule helps board members remain actively engaged and accountable for their responsibilities. Term limits on board participation encourage a healthy influx of new ideas and perspectives. 

Boards should adopt practices that maximize participation, including providing accommodations for remote or electronic participation during meetings, deliberations, or decision-making. 

Committees are an important part of governance. A committee structure enables a board to function effectively by creating smaller working groups with specific goals. 

Choose your board chair carefully. This person presides over meetings, oversees committees, and ensures all board members have access to the documents and materials they need to be effective. Like a good CEO or president, board chairs must be good leaders and communicators, able to run effective meetings, gain consensus among members, and listen to differences of opinion. 

Accountability

Lastly, as part of governance and accountability, ensure that your organization follows best practices related to compliance with laws and regulations. For example, filing IRS Form 990 and the organization’s annual report is an essential part of nonprofit compliance.

Your organization is accountable to more than just the IRS. It’s accountable to its donors, members, or constituents. Ensuring that annual reports, audited financial statements, and other reports of how your organization manages its finances and achieves its mission are also part of nonprofit best practices. Prioritizing donor communication is a best practice worth following. 

Next: Financial and Fundraising Best Practice Ideas

We hope you enjoyed Part 1 of this series. Next up, we’ll share financial management and fundraising best practice ideas. 

For more fresh ideas and best practices to implement at your organization, subscribe to our newsletter or read our blog.

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.