Presentation on Non Profits - Responsibility
C-One Center for Non Profit Effectiveness (United Way , Miami)
Seminar Feb 26th, 2004
and Florida Department of Revenue
(Introduction by: Rene Velez)
Seminar Feb 26th, 2004
and Florida Department of Revenue
(Introduction by: Rene Velez)
Non Profits and Quality of Life
For many years Non Profit organizations have contributed to the quality of human life both here in the United States and throughout the world. Their causes range from the arts, healthcare, homelessness and world hunger to offering comfort and support to AIDS victims, single mothers, the elderly and caring for our young through education and early childhood development, just to name a few causes. It would truly be difficult to think of a major metropolitan city like Miami not having the services available through non profits. It’s something to think about as it affects all of our lives.
Comparison of For Profit vs. Non Profits
Financial and Management Responsibility
However, running a non profit is a sizeable undertaking. You have to be business oriented, work within budgets, hire personnel, establish a marketing strategy deal with human resource issues, keep track of your accounting, develop a business plan and secure funding and deliver your product, just to name a few of the major functional areas. In fact there is a great deal of comparison between running a small non profit and starting a small business. In reality the pressure could well be greater for those who decide to undertake this role because often they have a great deal of passion invested in their cause. Managing a non profit requires a great deal of management resourcefulness. Above and beyond that, you should be aware that if you mismanage a non profit it may not be as simple as going out of business. Even though you are tax exempt you could owe taxes, you may have filing penalties and you could be in violation of the special tax exemption you have been given. Your organization could be penalized and those officers and directors could also face fines and penalties personally. In some cases grants may be recalled for lack of proper accounting or for incorrect use of funds. Just as for profits have a responsibility to shareholders and to the investing public at large, non profits have a financial and management responsibility to their donors and to the public. Think your plan through carefully not only because you are liable but also because when a non profit fails, it affects how the public will give and support the next non profit start-up. (EXAMPLES OF PENALTIES)
Non Profit Image, Marketing, Awareness, Professionalism, Balance
In raising donor funds as well as in attracting volunteers and professionals it is important to develop the right image, understand the value of developing marketing tools. A very important function of your organization is to create awareness for your cause. People have to understand what you do. The service you offer. Why it’s important. You have to develop a level of professionalism to gain people’s trust. To get them to donate time and money and to support your cause along with you. You have to set standards for answering the phone, providing the right donor receipts, thanking donors and recognizing them in your literature. Of course you have to create a balance when trying to address image, marketing, awareness and professionalism. You have to strike a critical balance between doing a great job but not looking like you spent all your donations on a fancy business card and brochures.
Your money is better spent creating a statistical sheet of your accomplishments. How many patients did you serve? How many man hours of volunteers did you have? How many meals did you serve? What is your average cost of service per beneficiary?
What percentage of the target market did you reach? Yes. You have to be a statistician also!
Start out on the right foot
The biggest piece of advice I can offer to anyone starting a non profit is, do your homework and prepare for a major commitment. Then “write down” (at minimum) a simple business plan in draft. You have to address these simple questions just to start:
(1) Who or what will you serve?
(2) What service or product will you provide? Is there anyone else doing this?
(3) How much will it cost to provide that product or service per month for 1 year? (budget)
(4) What am I good at and what will I need help to do?
(5) What/who do I need to start out?
Be very realistic! Don’t lie to yourself! If anything can go wrong it will! There are many resources out on the internet you can look into. You have to be willing to do a lot of homework. Also there is C-One (United Way , Miami) which has an extensive library and also UM (University of Miami) Center for Non Profit Management. Seek out guidance from other non profit founders and managers. Don’t overlook for profit owners and managers that can guide you in your business plan.
Non Profits are a Regulated Industry
I have not heard this phrase often since becoming involved in non profits however, I am starting to use it more and more. “Non Profits are a Regulated Business”. My hopes is to keep non profits from committing errors that can get them into serious trouble. In addition there seems to be a trend that has been going on for some time now both by taxing authorities and homeland security to take a closer look at Tax Exempt organizations. My suspicion is this scrutiny will continue over time.
In the past year we have all heard of the scandals in the business sector. Fraud, mismanagement, corruption. These scandals have created a new era in accounting, financial reporting and business administration. As such there is an emphasis on holding managements feet to the fire when they are entrusted by the public with money. It is already being felt in the non profit sector and it’s only a matter of time before we see more rules and legislation to make sure charitable organizations are measured with more accuracy than ever before.
Taxation:
Internal Revenue Service (http://www.irs.gov/)
Florida Department of Revenue ( http://www.state.fl.us/dor/)
Florida Department of Agriculture and Consumer Affairs ( http://www.800helpfla.com/ )
Finance and Accounting:
Financial Accounting Standards Board ( www.fasb.org/ )
American Institute of Certified Public Accountants (http://www.aicpa.org/index.htm )
Office of Management and Budget ( http://www.whitehouse.gov/omb/ )
For many years Non Profit organizations have contributed to the quality of human life both here in the United States and throughout the world. Their causes range from the arts, healthcare, homelessness and world hunger to offering comfort and support to AIDS victims, single mothers, the elderly and caring for our young through education and early childhood development, just to name a few causes. It would truly be difficult to think of a major metropolitan city like Miami not having the services available through non profits. It’s something to think about as it affects all of our lives.
Comparison of For Profit vs. Non Profits
Financial and Management Responsibility
However, running a non profit is a sizeable undertaking. You have to be business oriented, work within budgets, hire personnel, establish a marketing strategy deal with human resource issues, keep track of your accounting, develop a business plan and secure funding and deliver your product, just to name a few of the major functional areas. In fact there is a great deal of comparison between running a small non profit and starting a small business. In reality the pressure could well be greater for those who decide to undertake this role because often they have a great deal of passion invested in their cause. Managing a non profit requires a great deal of management resourcefulness. Above and beyond that, you should be aware that if you mismanage a non profit it may not be as simple as going out of business. Even though you are tax exempt you could owe taxes, you may have filing penalties and you could be in violation of the special tax exemption you have been given. Your organization could be penalized and those officers and directors could also face fines and penalties personally. In some cases grants may be recalled for lack of proper accounting or for incorrect use of funds. Just as for profits have a responsibility to shareholders and to the investing public at large, non profits have a financial and management responsibility to their donors and to the public. Think your plan through carefully not only because you are liable but also because when a non profit fails, it affects how the public will give and support the next non profit start-up. (EXAMPLES OF PENALTIES)
Non Profit Image, Marketing, Awareness, Professionalism, Balance
In raising donor funds as well as in attracting volunteers and professionals it is important to develop the right image, understand the value of developing marketing tools. A very important function of your organization is to create awareness for your cause. People have to understand what you do. The service you offer. Why it’s important. You have to develop a level of professionalism to gain people’s trust. To get them to donate time and money and to support your cause along with you. You have to set standards for answering the phone, providing the right donor receipts, thanking donors and recognizing them in your literature. Of course you have to create a balance when trying to address image, marketing, awareness and professionalism. You have to strike a critical balance between doing a great job but not looking like you spent all your donations on a fancy business card and brochures.
Your money is better spent creating a statistical sheet of your accomplishments. How many patients did you serve? How many man hours of volunteers did you have? How many meals did you serve? What is your average cost of service per beneficiary?
What percentage of the target market did you reach? Yes. You have to be a statistician also!
Start out on the right foot
The biggest piece of advice I can offer to anyone starting a non profit is, do your homework and prepare for a major commitment. Then “write down” (at minimum) a simple business plan in draft. You have to address these simple questions just to start:
(1) Who or what will you serve?
(2) What service or product will you provide? Is there anyone else doing this?
(3) How much will it cost to provide that product or service per month for 1 year? (budget)
(4) What am I good at and what will I need help to do?
(5) What/who do I need to start out?
Be very realistic! Don’t lie to yourself! If anything can go wrong it will! There are many resources out on the internet you can look into. You have to be willing to do a lot of homework. Also there is C-One (United Way , Miami) which has an extensive library and also UM (University of Miami) Center for Non Profit Management. Seek out guidance from other non profit founders and managers. Don’t overlook for profit owners and managers that can guide you in your business plan.
Non Profits are a Regulated Industry
I have not heard this phrase often since becoming involved in non profits however, I am starting to use it more and more. “Non Profits are a Regulated Business”. My hopes is to keep non profits from committing errors that can get them into serious trouble. In addition there seems to be a trend that has been going on for some time now both by taxing authorities and homeland security to take a closer look at Tax Exempt organizations. My suspicion is this scrutiny will continue over time.
In the past year we have all heard of the scandals in the business sector. Fraud, mismanagement, corruption. These scandals have created a new era in accounting, financial reporting and business administration. As such there is an emphasis on holding managements feet to the fire when they are entrusted by the public with money. It is already being felt in the non profit sector and it’s only a matter of time before we see more rules and legislation to make sure charitable organizations are measured with more accuracy than ever before.
Taxation:
Internal Revenue Service (http://www.irs.gov/)
Florida Department of Revenue ( http://www.state.fl.us/dor/)
Florida Department of Agriculture and Consumer Affairs ( http://www.800helpfla.com/ )
Finance and Accounting:
Financial Accounting Standards Board ( www.fasb.org/ )
American Institute of Certified Public Accountants (http://www.aicpa.org/index.htm )
Office of Management and Budget ( http://www.whitehouse.gov/omb/ )
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