Oct 15
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What Are the Most Common Fundraising Pitfalls? Here are Three You Should Know

By | Fundraising | No Comments

Fundraising ranks high on the list of a nonprofit’s priorities. Everyone wants to get better at fundraising; after all, the better you are at this critical task, the more funds you have to support your work!

Creative fundraising campaigns tend to get the publicity with writes up in your favorite nonprofit journals or marketing magazines. However, there are times when too much of a good thing can be confusing, underwhelming, or just plain wrong for your nonprofit.

As you consider your next fundraising campaign, keep in mind these three lessons from the world of fundraising. Keep them in a file of “what not to do,” so you don’t repeat the mistakes of others. Learn, grow, explore, and yes, test new concepts, but beware of these three fundraising pitfalls.

The Big 3 “What Not to Do” in Fundraising Marketing

Pitfall #1: Being so clever you miss the point and confuse donors.

It’s easy to get lost in a clever campaign. Perhaps you’re tired of the same-old fundraising campaign your organization has used successfully for the past several years, or you feel the need to try something different. That’s fine, but make sure the cleverness doesn’t outweigh the point of the campaign.

A too-clever campaign may rely heavily on puns, graphic gimmicks, or similar ideas to deliver its purpose. What ends up happening is that donors glance at the advertisement, experience momentary confusion, and set it aside. Instead of motivating them to donate, the ads gets tossed in the bin or ignored.

Avoid the too-clever trap: To avoid this pitfall, you can test the “clever” campaign against the tried-and-true response piece. See if the smart piece outperforms the stalwart marketing piece. Mail or send the same number of pieces to a split of your audience. This is called an A/B test and pits A, the clever campaign, against B, the tried and true one. Since you already know the average results of your tried and true campaign, you can see easily if the new piece outperforms it.

Another and simpler method is to show the piece to five random people, perhaps friends, family, or those unaffiliated with your nonprofit. Ask them questions: would they donate? Do they understand the point?

These two steps can save you from wasting time, money, and resources on something that won’t get you the results you desire.

Pitfall #2: Going overboard with design or enclosures.

Yes, it’s a time-tested nonprofit marketing tactic to include a small gift item to entice people to send money back. Stickers, stamps, a notepad, a pen, these are all fine…to a point.

But if your charity is asking for money, consider the impression these gifts make. Are they useful items? Are they expensive items? If so, they might be perceived as frivolous expenses instead of a simple gift.

Another way in which nonprofits sometimes go overboard is by using paper or design that appears expensive. “What!” you may argue. “That paper was much less expensive than the other kind we used to use, and it looks so elegant!”

That may be true, but potential donors only see the surface. They understand what appears to be a very expensive mailer and may perceive that you are ‘wasting’ money on marketing. Err on the side of caution and ensure that your designs reflect the spirit of your nonprofit.

Pitfall #3: Amateurish design.

Design is more than adding photographs or using fonts to punctuate a mailer for effect. Too many colors, competing fonts, a smattering of graphics, and you could end up with a marketing piece that confuses rather than motivates people to act.

A professional graphic designer understands the impact that color, visuals, and type make on the page. Designers know where to put the call to action (the request for donations) and how to set up a mailing panel appropriately. Hiring a professional nonprofit marketing agency or graphic designer, skilled in designing for nonprofit fundraising is a worthwhile investment.

Nonprofit Fundraising the Right Way

Don’t let the mistakes of the past weigh you down. If, as you’re reading this, you see errors that your nonprofit has made in the past, note them and move on.

At Welter Consulting, we act as the bridge between your nonprofit and the software that you need to succeed. This includes fundraising software to track, manage, and measure the impact of donor contacts. We are here to help you with software selection, implementation, training, and audit preparation. Contact us at 206-605-3113 for a consultation today.

Oct 08
0

True Fund Accounting Serves the Needs of Nonprofits the Best

By | Accounting Software | No Comments

Charities worldwide struggle to gain donors’ trust. In the United States, while 73% of donors say that it is essential to trust a nonprofit to which they donate, only 19% would give their charities a trust-score of 9 or 10 on a scale of 1 to 10.

Nonprofits must work harder than ever to build trust between their organizations and the public. The news media is quick to run stories of charities that waste money but rarely if ever, showcases responsible charities and the good work that they do. You must be your own best advocate and show the public exactly how their donations are being used, so there is no question about your organization’s integrity.

True Fund Accounting: A Trust Builder for Nonprofits

Which program(s) do you use to track your nonprofit finances and accounting? Many nonprofits rely on spreadsheets and off-the-shelf commercial accounting software programs to track expenses, income, and payroll.

While such methods may be acceptable during your startup and early growth phases, if you’re serious about shoring up trust between your organization and the public, it’s time to switch to true fund accounting.

What Is True Fund Accounting?

There are two main types of accounting software on the market: commercial and fund.

Commercial accounting packages assume that the business sells goods or provides services. It doesn’t have the flexibility needed to manage accounting by specific funds. Fund accounting software enables a nonprofit to track how funds are used. For example, if a donation of $10,000 is received with the specification that it is used only for a specific program, fund accounting enables you to track how those particular dollars are spent.

10 Reasons Why Your Nonprofit Needs True Fund Accounting

Many nonprofits begin their work using spreadsheets or commercial accounting packages. But as your organization grows, true fund accounting is the best way to manage the complex accounting needs of your nonprofit.

If you’re still deciding whether to switch from your current accounting software to true fund software, consider the following 10 reasons why your nonprofit may benefit from true fund accounting:

  1. You receive funds with restrictions: Large donations, grants, and other funds given to your organization with restrictions require sophisticated tracking and reporting. Only true fund accounting software offers the level of sophisticated tracking nonprofits need.
  2. Measuring the performance of a program or an activity is essential to you: Nonprofits who value measuring the performance of specific programs find that true fund accounting offers the detail-level tracking needed to understand the financial benefits of a specific program.
  3. You need to report for different periods or fiscal years: While your nonprofit may run on a specific fiscal year, that timeframe may not align with those of your grantors and foundations. They may require reports based on different time periods. True fund accounting provides a flexible approach to reporting that enables you to run reports on varying time periods rather than a set fiscal year.
  4. Does your organization need to record encumbered funds? If you must record receipt of gifts as encumbered, true fund accounting supports recording encumbered funds. Commercial accounting software does not.
  5. We need to record allocations of indirect costs by grantors. The allocation of elaborate indirect costs can be a headache in a commercial program, but true fund accounting enables you to enter it with ease.
  6. Reports must be generated and submitted to each funding source: Foundations, grantors, and private donors often require detailed reports to be submitted at agreed-upon milestones. True fund accounting makes it easier to run such reports based on milestones, time periods, or events.
  7. Nonprofit-specific accounting rules must be applied to your financials: Not only are you required to utilize nonprofit accounting rules for your organization, but when these rules are changed or updated, your software must update too. Cloud-based true fund accounting updates when changes are made so you continually use the latest software version.
  8. Your organization must manage and report multiple budgets: A typical business using commercial accounting software uses budgets for planning purposes. Nonprofits utilize budgets for compliance and monitoring.
  9. Transparency in how funds are used is vital to your organization: Processing multiple balance sheets within a nonprofit isn’t uncommon. Funds are often treated as separate entities with their own general ledger. Commercial software can be cumbersome to set up for this, but true fund accounting accommodates such setup easily.
  10. Your accounting software must work across multiple platforms: Nonprofits often set up private gateways or access points into their accounting for auditors and others to review their information. It’s essential that such software functions smoothly across multiple platforms and integrates other business applications.

Trust takes time to build and is earned with each interaction between an organization and the public. When you demonstrate thorough, clear, concise reports, applying nonprofit accounting rules and best practices to your financials, and share these clearly with donors, granting organizations, auditors, and others, you build trust. It’s time to embrace true fund accounting for the future of your organization.

Welter Consulting, Inc.

Welter Consulting, Inc is your bridge to technology solutions for nonprofit organizations. Welter Consulting offers software support, implementation, training, and audit preparation assistance for nonprofit organizations. We can help you select a true fund accounting program such as Abila MIP Cloud, our recommended package for many nonprofit organizations. Let’s talk about your needs – contact us at 206-605-3113.

Sep 17
0

Cryptocurrency Donations: Unraveling the Mystery

By | Cryptocurrency | No Comments

Cryptocurrency made headlines over the past several years as bitcoin jumped in price then plummeted. Now on the rebound, the ubiquitous altcoin (short for “alternative coin”) is just one of hundreds of cryptocurrencies listed on exchanges such as Bitifinex, Binance, and Kraken.

Are cryptocurrencies “money”? Do they have intrinsic value? Can you accept them as gifts to your nonprofit? Here’s our guide to accepting the new money as gifts to your organization.

What Is Cryptocurrency?

Cryptocurrency is a term for digital money. This money isn’t backed by a government. Instead, the coinage occurs on a digital transaction called the blockchain. Each coin has its own blockchain, which is a permanent, public, and immutable ledger of transactions.

Any company, individual, or entity can launch a cryptocurrency. The field is currently unregulated, with no global standard, so it is ‘buyer beware’ when purchasing cryptocurrencies. Typically, each coin launches with a lengthy white paper which details the purpose of the coin, the blockchain it is based on, and the plans the company has for its future. Most companies launching cryptocurrency also produce a website which links to the exchanges the coin is listed on and where you can buy or sell it. The exchange also contains the current trading volume and value for any coin.

When a new coin arrives on the trading scene, its value is set by the number of coins minted on the blockchain. As trading demand rises and falls, value increases and decreases similar to stocks or traded commodities like gold or silver.

Can Nonprofit Accept Cryptocurrency as Gifts?

Yes, but it is essential to research any coins offered as gifts and designate the gift appropriately in your accounting system. The U.S. Treasury classifies altcoins as intangible property or a commodity. Don’t let the term “coin” or “cryptocurrency” confuse you – these are not legal tender like dollars, euros, or pounds, but intangible property, more akin to patents, trademarks or similar intangible assets.

To accept cryptocurrencies as gifts, you will need to update your nonprofit’s policies to state your position on digital money. Then, the nonprofit will need a digital wallet. Because cryptocurrency is a digital asset, it must be transmitted electronically into a virtual ‘wallet’ which stores the coins securely. Then, after the transfer is confirmed on the blockchain (which may take up to several days), you can exchange the coin for the currency of your choice or hold it in the digital wallet to see if it increases in value.

Security

Each wallet includes a private “key” and a public key which unlocks the wallet for transfers. Setting up two-factor authentication is a smart move for any online transaction requiring high security, but especially crucial for cryptocurrency. There is nothing backing your altcoins; if they are stolen, and they can be, then you have no recourse as you would if a bank failed. There is no such thing as FDIC insurance on cryptocurrency.

Like any digital asset, cryptocurrencies and related secure information, such as keys to unlock the wallet, can be compromised, especially if the computer where the data is kept is linked to the web. You may wish to upgrade security or store everything in a cold computer (one not connected to the internet) to prevent hackers from breaking in to steal the information.

Banking Concerns

Banks sometimes freeze accounts that accept cryptocurrency. To prevent your accounts from being temporarily frozen, you may wish to establish separate bank accounts for cryptocurrency gifts and another for your organization’s general needs.

It’s a cliché to say that young people are more open to using cryptocurrency than other demographics, but it is true. If your organization serves the 20-something crowd, consider adding crypto to the list of assets you can accept as gifts. Although it may seem strange to accept alt currencies, it’s no stranger than people donating funds with credit cards. It’s just a new way of thinking about money and donations.

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.

Sep 11
0

MIP Fund Accounting 2019.3 Releases on September 19, 2019

By | MIP Fund Accounting | No Comments

Here’s what you need to know about the MIP Fund Accounting update, v2019.3.

This release contains high-quality updates, expanded reporting capabilities, more flexibility and usability and a number of improvements within the Payroll module.
Improvements in the release:
  • Reports:
    • Financial Statements – Statement of Cash Flows – added the default format for the indirect method
    • Financial Statements – Statement of Activities – added option ‘Include Unposted Transactions’ in the report
    • Accounts Payable – Vendor Activity – added filter ‘Zero Activity’ to get vendors with no activity
  • Payroll:
    • Added additional columns for more flexibility in reporting within payroll module
  • Organization:
    • Data Integrity Checks – Removed exclusive access requirement and replaced with a system lock search (disallowed when posting or close-year is in progress)
  • Improved Help experience:
    • Changed Help to be accessible via the web, enabling us to provide documentation updates between releases
  • Enhanced audit trail:
    • Activities – Reconcile Cash Accounts - added logging to the Summary Organization Audit when an existing Reconciliation ID is deleted
  • Quality improvements across MIP
Microsoft Support Changes

Please note the MIP v19.3 workstation installation will take additional time due to Microsoft .Net 4.8 framework being required. If your machine already has .Net 4.8 installed or your IT professional installs .Net 4.8 prior to the MIP workstation installation, please disregard this message.

Windows Versions of MIP released after January 31, 2020 will no longer be supported on Windows 7 SP1.

Support trending topics:

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