How Non-Profits Improve their Chances to Receive Funding
Non-for-profit organizations (NFP) most important resource is its programs. It is also relevant to mention that the main value is its reputation. The employees and volunteers are the keys to fulfill the mission and objectives proposed each year.
There is a basic structure that NFPs can implement to make themselves more appealing for financing. This structure starts with a Board of Directors, goes thru Antifraud Programs and ends with monitoring and reporting systems.
Elements of Non-For-Profit Organization:
Strong Board of Directors
- Legal Counsel/or have access to one
- Accountant CPA
- Chief Operating Officer
- Leaders- The tone at the top
- Have a Clear Compass- Big Picture
- Practice Considerate Communication
- Know their Objectives
- Seek Advisers and Allies
Accounting Internal Controls
- Accurate and reliable financial reporting
- Compliance with applicable laws and regulations, contracts and grant agreements
- Management’s objectives regarding the effectiveness and efficiency of operations
Anti-Fraud Programs and Controls
- Fraudulent financial reporting
- Asset misappropriation- Theft of assets
- Conflict of interest- Use of employee’s position in a way that violates the employee-employer relationship.
- Eg – bribery, extortion, conflicts of interest
- Sets the tone from the top of the organization. This category of controls include integrity and ethical values, commitment to competence, attention, and direction provided by the board of directors or audit committee, management’s philosophy and operating style, organizational structure and the manner of assigning authority and responsibility, and human resources policies and procedures
- The process the organization goes through to identify the risk that would prevent it from meeting its objectives
- Lack of diversity of funding sources
- Turnover in key positions
- Implementation of anew IT system
- Entering into new programs with rapid growth with insufficient infrastructure to support it
- Deterioration of the economy affecting its funding sources
- Changes in accounting principles and reporting requirements
- Who are your competitors and what can you offer differently
- Who are your allies
- The technology and processes necessary to initiate, authorize, process, record, and report transactions and events in the financial statements and to communicate the results to management and employees who have a need for information.
- Involves the quality of communication between the board and management
- The Board and external Auditors and Internal Auditors
- Staff and Management
- Management and donors
- Funding sources
- Monitoring is a very important control function. It occurs when management follows up to determine whether the Non-profits’ staff members are performing their duties as expected.
- It also occurs when the Board follows up to determine that its objectives are being met.
- Monitoring controls needs to be performed at the overall Entity level and also at the transactional level
This is a summary presentation given by Marlon Kilgour, CPA from Kilgour and Associates, LLC.
Fulton Abraham Sanchez, CPA, founder of FAS CPA & Consultants of Miami, FL, is a Certified Public Accountant specializing in Tax Planning. You can email him to email@example.com or contact us on Facebook: FAS CPA & Consultants
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