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Adding Pre-Month-End Closing Meetings Can Enhance Financial Communications [SUBSCRIBERS-ONLY]
I am always looking for efficient, creative, and low risk opportunities to improve financial communications. This usually involves both art and science, a mix of creative and structured tactics. Adding pre-month-end closing meetings is a value-added practice that takes advantage of both tactics with high upside potential for positive results.
Q&A #103 – What does an “entire agreement” clause mean in a contract?
The purpose of “entire agreement” language in a contract (sometimes called an “integration” or “merger” clause), like the example you mentioned, is to avoid misunderstandings and disputes about terms that may have been discussed during negotiations but were never included in the final agreement. When drafted properly such a provision should generally prevent one party from seeking enforcement of promises outside of the written terms of the contract.
![Time to Take a Fresh Look at Old Board-Designated Funds [SUBSCRIBERS-ONLY]](https://images.squarespace-cdn.com/content/v1/5e6ccadfb4659c1d51df14d5/1709987619004-PP72M5ZUDFOO03FFTIBG/oskars-sylwan-TaDYbj5q1Gc-unsplash.jpg)
Time to Take a Fresh Look at Old Board-Designated Funds [SUBSCRIBERS-ONLY]
In my professional life I view many financial statements from a wide variety of nonprofit organizations, and I am always amazed, but not shocked, by how many of these nonprofits have Board-designated funds sitting on their balance sheets. Two questions immediately come to mind. Why where they originally established? Is the purpose still relevant today? Often the answers lie in understanding the circumstances occurring at the time the Board originally designated the funds.
Q&A #102 – Do in-kind contributions of property count toward the $50,000 per year limit for Form 1023-EZ eligibility?
Yes, in-kind contributions of property (such as donated supplies) should be counted when determining whether your organization is within the $50,000 per year threshold for Form 1023-EZ eligibility. While the Form 1023-EZ instructions do not say this explicitly, the instructions use language that is very similar to the Form 990, and in that context “gross receipts” clearly include contributions of supplies and other property.
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Can a Sketch Work Better Than a Financial Forecast? [SUBSCRIBERS-ONLY]
Business, financial, and operational professionals love concepts related to financial forecasts. It is our way to view an abstract complicated plan in terms of dollars and the impact on resources both positive (surpluses – add to resources) and negative (deficits – use of resources). But outside our inner circle, forecasts are often viewed with misunderstanding, trepidation, and sometimes even fear. Taking a “sketch” approach can help people to embrace financial forecasts, enhance engagement, and be more confident with planning for new projects and efforts.
Q&A #101 – What does it mean to sign a contract in counterparts?
Executing a contract in counterparts is a very common practice that simply means that each party signs their own separate duplicate copy of the agreement rather than signing together on the same page of the same document.
VIDEO: Keeping Board Meeting Minutes | 5-Minute Lessons 4 Nonprofits
SE4N's Benjamin Takis provides a short lesson on how to properly draft and maintain nonprofit Board and committee meeting minutes.
Q&A #100 – Must Board meeting minutes be formally approved by the Board?
State nonprofit corporation law usually does not explicitly state that Board meeting minutes must be formally approved by the Board, however this is highly recommended and is widely considered a best practice. The minutes of all meetings of the Board and any committee with Board-delegated powers should be formally approved no later than the next meeting of that governing body. Failure to do so can cause numerous compliance and governance problems and reflect poorly on the organization.
Part VI, Section A of the Form 990 Shines a Light on Your Board and Governance Practices
Part VI, Section A of the Form 990 asks many probing questions related to a nonprofit organization’s “Governing Body and Management.” How an organization chooses to respond to these questions will directly impact perceptions of the quality of its management systems and the integrity of its governance practices, so be thoughtful and complete with your responses.
![GUIDE SHEET: Form 990, Page 6, Part VI, Section A - Governing Body and Management [SUBSCRIBERS-ONLY]](https://images.squarespace-cdn.com/content/v1/5e6ccadfb4659c1d51df14d5/1645627770981-4NE2PCKQLX5DJB6YBZXK/990+Resource+1.png)
GUIDE SHEET: Form 990, Page 6, Part VI, Section A - Governing Body and Management [SUBSCRIBERS-ONLY]
R. Michael Sorrells (CPA) and A. Michael Gellman (CPA, CGMA) jointly authored this guide sheet to provide insights and tips on this highly visible portion of the Form 990, which directly impacts perceptions of the quality of your nonprofit organization’s management and the integrity of its governance practices.
Q&A #99 – Do non-spouse romantic relationships raise conflict of interest issues?
While a non-spouse romantic relationship would ordinarily fall outside of the scope of the conflict of interest rules in the federal tax code, and may or may not be addressed by your organization’s conflict of interest policy and applicable state nonprofit corporation statute, it would be prudent to treat this situation like any other conflict of interest. Regardless of the legal formalities, these types of relationships can certainly lead to the perception that there is a conflict and should be treated as such to avoid the risk of damaging your organization’s reputation.
Past Presidents Can Be a Powerful Resource or a Missed Opportunity
I have looked at many lists of Past Presidents for nonprofit organizations and been amazed by the roster of names, but I am often disappointed at how many Past Presidents have become lost connections. High performing nonprofits keep their Past Presidents engaged and connected with meaningful active roles that are thoughtful and strategic.
Q&A #98 – When should nonprofits hold their annual Board meeting?
Nonprofit Boards are generally required to meet at least once per year. However, if the Bylaws do not specify when the annual Board meeting must take place, then the organization and its Board is free to decide the timing. In my experience, the question of when to hold the annual meeting should be based on three key considerations: consistency, alignment with your organization’s governance and operational cycles, and efficiency. Applying these three factors will help to enhance the effectiveness and timing of the annual Board meeting.
![A Lesson for Nonprofits about Public Perception from the Crisis Text Line Controversy [SUBSCRIBERS-ONLY]](https://images.squarespace-cdn.com/content/v1/5e6ccadfb4659c1d51df14d5/1709903325020-J1C3HBLFN06X624YSYZ4/adem-ay-ik_AuIWeBBM-unsplash.jpg)
A Lesson for Nonprofits about Public Perception from the Crisis Text Line Controversy [SUBSCRIBERS-ONLY]
A controversy involving the nonprofit organization Crisis Text Line’s sharing of anonymized data with a related for-profit entity has been a major topic of conversation recently following a lengthy report by Politico. While the specifics of this situation may be unique, this story is a lesson to all nonprofits that public perception should always be considered as one of the main factors in any decision, and this public perception can be just as important as legal formalities.
Q&A #97 – What to do when the Bylaws are ambiguous?
It is nearly impossible to eliminate all ambiguity from the Bylaws of a nonprofit organization, so sometimes interpretive questions will arise that truly do not have a clear answer. Fortunately, courts will often defer to the Board’s interpretation of ambiguous Bylaws if the Board can show that the interpretation was reasonable and made in good faith. While the level of deference will vary depending on the applicable jurisdiction, this is a good standard to aim for regardless.