Winter is in full swing. The Super Bowl is fast approaching. Holiday décor is down and for organizations of all sizes, we’re in the thick of year end / new year crunch time.
In the nonprofit sector, Q4/Q1 can look a little different—especially for organizations whose fiscal year aligns with the calendar year. That’s why I recently enlisted Jerry Frick, All In One Accounting’s nonprofit expert, to share things that should be on your radar as the calendar flips to 2023. From budgeting to tax receipts, Jerry offers tips that can help you and your organization feel more confident heading into the new year.
Budget with Your Organization’s Goals in Mind
Budgeting is certainly not the most glamorous work you do, but it’s critical to the success of your organization each year. Instead of approaching it like a chore, view the budgeting process as an opportunity to translate the vision and goals of your organization into actionable items, getting your internal stakeholders involved along the way. Operations, development, and marketing folks possess a wealth of information; don’t hesitate to tap into their experience and insight!
And as you work cross functionally to create the budget, remember that a budget (what you want to happen) and a forecast (what you think will happen) are not the same thing. “Don’t think of the budget as a fluid document,” Jerry advises. “Your budget is a tool to measure against throughout the year, and if it keeps changing then it doesn’t mean much.”
Research Pandemic Relief
Has your nonprofit relied upon pandemic relief money to stay afloat during these uncertain times? With most pandemic relief over (or ending soon), be sure to factor this into your new year planning.
A noteworthy exception to this, however, is the Employee Retention Credit, which businesses can apply for until April 2025. If you need help determining whether your nonprofit qualifies, the All In One Accounting team can help.
Review (and Adjust) Internal Controls
It’s no secret that an effective system of internal controls can help your organization operate more smoothly. Our recommendation? Be intentional about reviewing your nonprofit’s controls—including procedures around paying bills and documenting donations—and adjust them as needed.
“A well-designed system of internal controls will have segregation of duties,” Jerry says of the checks-and-balances approach nonprofits should apply to their processes. “With so much happening electronically, every organization should be reviewing controls to ensure the proper procedures are in place, especially when it comes to receiving and documenting money.”
We review internal controls with clients each year, helping them identify what’s working, what’s falling through the cracks, and what can be more efficient. Take it from us: This is time well spent!
Send Tax Receipts by January 31
If your organization has received donations this year, then sending tax receipts should be on your to-do list. Whether you’ve done this throughout the year or are planning to send receipts at year-end, check the latest IRS requirements for providing written acknowledgment for charitable contributions.
“Monetary donations, in-kind gifts, and even prizes won at fundraising events like silent auctions all have tax receipt implications,” notes Jerry.
Don’t delay: Tax receipts for 2022 donations must be sent by January 31, 2023!
Plan and Adapt
While there’s no one-size-fits-all approach for nonprofits, being intentional about planning ahead and proactively reviewing your systems is sure to give you—and your stakeholders—greater peace of mind.
And just like your for-profit counterparts, adaptability is key to a successful year. With transparency, authenticity, and clear communication as your guide, you’ll be able to weather any storm.
Here's to a wonderful and successful Q1 and new year!