Mar 26
0

Human and AI Collaboration: Working Better Together

By | Accounting, Accounting Software, Nonprofit | No Comments
people shaking hands with AI screen overlay - Human and AI Collaboration Working Better Together

As time has passed, more organizations are testing the potential of AI to augment job functions. AI tools may be readily available. For example, AI and machine learning may be built into newer versions of nonprofit accounting software, speeding approvals, automating reminders, and helping complete many tedious jobs faster.

Where once we feared that AI might take over the work of humans, we now see that people, working in tandem with AI-based platforms, can achieve much more together than singly. Here’s why human and AI collaboration can mean more efficient work for nonprofits.

AI Enhances Productivity and Efficiency

One of the best ways that people can partner with AI is to use this new technology to enhance productivity and efficiency. AI cannot (and should not) be expected to take over tasks entirely. But it can provide exceptional efficiency gains. Here are five ways in which your team can use AI to enhance their productivity.

Automation

AI can handle repetitive tasks, freeing up time for you to focus on more complex activities. For example, email filtering, scheduling, and data entry can be automated to reduce the workload. Within nonprofit accounting software, AI can automate the routing of approvals, running reports, and sending reminders, saving your team minutes that add up to hours of productivity gains per week.

Data Analysis

Another benefit of using AI is to leverage its power to analyze large amounts of data. It can find patterns and make suggestions based on these patterns. Your team then needs to review the suggestions and act on them according to their judgement. AI produces the reports, but people need to sift through its findings, confirm them, and then choose which ones to act on.

Predictive Capabilities

AI can predict outcomes based on historical data, helping you anticipate trends and make proactive decisions. This comes in handy with marketing and donor outreach, for example. AI can examine response patterns based on previous outreach campaigns and make suggestions to maximize your efforts for the best response.

Research Assistant

When you need to find facts and data, AI can scour the web more quickly than a person can search and examine the results. The AI-produced results can be refined and enhanced to find the research you need to support a presentation, pitch, or other activity. Be sure to check the citation link and confirm the accuracy of the data or statistics produced by AI searches. It sometimes makes mistakes analyzing the source material and matching it to the search query. A quick scan of the source document can help you confirm if the stats are accurate or not.

The AI – Human Partnership

AI isn’t a stand-alone tool, but rather a potential efficiency booster for the workplace. Humans, according to a Harvard Business Review article, must determine the value of the insights generated by AI and weigh their merits. As you can see from the list of suggested ways in which teams can use AI to improve productivity, it can enhance speed and efficiency, but people should always review its results and findings and confirm them.

Moving Forward: Understanding, Training, Governance

It is vitally important, however, that before you encourage staff to use AI-based platforms, you understand how they use, store, and serve data.

Public AI, for example, ingests everything from the web, and if you feed it new material, which becomes part of its massive data repository. This is why you should never enter anything proprietary into “free” tools like ChatGPT or Copilot.

Developing a set of guidelines for your team on how they may (or may not) use AI platforms, especially free or public-access AI, is essential, as well as training sessions to help them understand responsible AI use.

While the headlines may hype AI as a replacement for people, it’s really the partnership between AI and people that gets the best result. AI is a tool like any other. It’s how the tool is used that counts.

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.

Mar 19
0

Understanding Nonprofit Leadership Structures

By | Nonprofit | No Comments
Understanding Nonprofit Leadership Structures

When people join a nonprofit, they are often surprised at the difference in the organizational structure from that of a for-profit company. They may hear about decisions being presented to a committee or a board. Who is this mysterious board? Who makes up the committee, and why does a committee have the authority to approve a project?

Unlike many institutions—for-profit companies, schools, and the military—nonprofits rarely follow a top-down leadership style. Instead, depending on whether we’re talking about an accountability hierarchy or a voluntary association, the chain of command differs significantly among nonprofits.

Nonprofit vs. For Profit Reporting Structures

Nonprofits can vary considerably in their ultimate reporting structure. They typically have directors, managers, and other leaders who guide the daily activities of their departments. Like a for-profit company, people report to those managers, and their managers handle daily activities like signing off on marketing campaigns, creating work schedules, and more.

While a for-profit corporation may have a board of directors or shareholders, most have a typical hierarchical structure. Workers report to managers, managers to directors, directors to vice presidents or c-suite leaders, and all roads leading up to the CEO, who answers to the board or shareholders.

Types of Organizations and Their Leadership Hierarchies

There are many types of nonprofits, and every kind of organization is accountable to different members or groups.

Member-Governed Organizations

Many unions and small organizations follow the leadership hierarchy of member-governed organizations, which may also be called “member-driven” organizations because the members guide them. The membership has the final authority over the organization. Members may elect the board of directors, who govern between meetings of the members, but the board may not overrule member decisions.

Board-Governed Member Organizations

This hierarchy finds the board governing the organization. Members elect the board, and then the board leads. Some decisions, such as budget decisions, may be reserved for the members. The board must follow strict bylaws governing its decisions, and often, it can only act after a majority vote is taken at a properly called meeting. Many homeowner associations follow this leadership pattern.

Non-Member Organizations with Self Perpetuating Board

In this structure, the board governs the organization. The board chooses its successors, hence the term “self-perpetuating board.” Members contribute financially but have no say in the daily decisions of the organization. Museums are a good example of this type of hierarchy, with members contributing donations, entrance fees, and the like, but the museum’s governing board handles all the major decisions impacting the organization.

Committee Structures: Executive Committee

Lastly, some organizations follow a committee structure. Large organizations may have a board of directors and an executive committee. Often, the executive committee is comprised of the organization’s leaders and selected board members. The committee is supposed to be guided by the board, but often, the roles reverse, with the executive committee taking the lead.

Review the Bylaws

This is why it is vital to refer to a nonprofit’s bylaws to understand its leadership hierarchy. It’s not as simple as a daily org chart. There may be someone making daily decisions over accounting, finance, operations, marketing, and the like, but big decisions, like pivoting to new programs, making major infrastructure investments, and the like, may require the board’s vote in order to proceed. The bylaws are the ultimate guide to those who have the final say at a nonprofit.

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.

Mar 12
0

Tips to Choose the Right Auditor for Your Organization

By | Accounting, Audit, CPA, Nonprofit | No Comments
auditor working at desk with spreadsheets, computers, and calculator

The right auditor is much more than a CPA. Auditors provide valuable guidance and ensure donors, members, and constituents trust that your organization is a good steward of their finances. These tips will help you find the right auditor for your needs who is both well-versed in nonprofits and a good cultural fit for your organization.

Find Potential CPA Firms

The first step is to find potential CPA firms who provide auditing services. You can look online for local firms or ask other nonprofits who they use and like. Your employees may also suggest companies or individuals with whom they have worked in the past.

It is vitally important to find an auditor who specializes in nonprofits. Nonprofit accounting has unique requirements and regulations, such as fund accounting and compliance with IRS Form 990. A CPA familiar with these aspects can ensure accurate financial reporting and adherence to relevant laws.

CPAs with nonprofit experience can also provide valuable insights and recommendations tailored to the organization’s unique financial situation. This can include guidance on improving internal controls, financial management, and strategic planning.

Lastly, because nonprofits are subject to various regulations and compliance requirements. A knowledgeable CPA can help navigate these complexities, reduce non-compliance risk, and identify potential issues before they become significant problems.

Develop Questions

To ensure that you have an apples-to-apples comparison of CPA firms after you’ve completed your research, develop a set of questions to ask each firm. This approach is similar to a request for proposal (RFP) process. Consider your organization’s needs. Some potential questions may include:

  • Can you provide references? May I contact them?
  • Who will I be working with?
  • Do you work on site, or do you need remote access to materials?
  • What is the typical audit process your firm uses?
  • What can I expect during the audit?
  • What do you provide me with afterwards? How long will it take?
  • How much does it cost?

Depending on your needs, you may also have other questions to add to this list.

Consider a Formal Request for Proposal

A request for proposal (RFP) is a formal document issued to multiple possible vendors. It outlines your organization’s background, the project you have available, and the scope of work. It also includes a due date for the project and response requirements, such as references or case studies demonstrating experience with previous projects.

Responses are written following the outline given to vendors in the scope of work. The resulting documents help compare the relevant credentials of all potential CPA firms. Because the RFP requires all responses to be written in the same format, following identical guidelines, the results provide an apples-to-apples comparison among respondents, allowing you to sift through what makes one stand out above the others.

Gather all the responses, whether through a formal RFP process or a sit-down meeting with questions. Then, meet with your team and consider the answers. Your final selection should weigh all factors, including the firm’s relevant experience, assessing its approach, and comparing prices.

Consider Cultural Fit

Lastly, consider the cultural fit of the CPA with your organization. The best credentialed expert will not be effective if you feel intimidated or rushed when you work with them. Look for someone with whom you feel good rapport, a CPA who communicates clearly, who listens patiently, and who isn’t afraid to answer questions.

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 20
0

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.