ace march 2013 newsletter
DESCRIPTION
Managing Your MoneyTRANSCRIPT
Managing Your Money
March 2013
Helping Nonprofits Help Arkansas
Arkansas Coalition for Excellence | 200 River Market Avenue, Suite 100 | Little Rock, AR 72201 | 501.375.1223 | www.acenonprofit.org 2
We are proud to work with you to achieve
ACE’s mission and vision together:
Mission: Strengthen Arkansas Nonprofits
Vision: A strong, vibrant, united and effective
nonprofit sector that is well positioned to meet
the diverse needs of all Arkansans.
Our Core Values: Best Practices |Inclusive |
Unity in Diversity | Connecting & Equipping |
Statewide Vision | Regional Approach
IN THIS EDITION
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4-6
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12-13
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Greetings from ACE
Upcoming
Trainings and Events
Member Corner
Advocacy Updates
Consultant Corner
Nonprofit Salary
Survey
Benefit of the Month
Resources & Other
Links
Contact Us
Arkansas Coalition for Excellence:
Helping Nonprofits Help Arkansas
Arkansas Coalition for Excellence | 200 River Market Avenue, Suite 100 | Little Rock, AR 72201 | 501.375.1223 | www.acenonprofit.org 3
GREETINGS FROM ACE ACE Members and Friends,
There is nothing less sexy than financial management unless, of course, you are
a CPA. There is also nothing less threatening to the existence of your
organization than the mismanagement of your finances. Thus, for most
executive directors of nonprofit organizations, financial management is an ac-
quired taste, and often contrary to one’s natural strengths and talents.
However, like most things, a little education, planning and consistency can go a long way in making
sure your nonprofit is on the right track. Every article in this issue can help positively impact the
finances of your organization. In addition, as a social worker, my education in this area has been
long on learning by natural and logical consequences. I’d like to share with you lessons I’ve learned
in the field.
#1 When you need help with making sense of your agency’s finances, look to your bookkeeper,
auditor, board member or even a volunteer with expertise in this field. As the leader of your team,
you don’t have to know everything, but you do need to know where you can get what you don’t
know. This edition is full of experts we go to when we have questions or concerns.
#2 Work with a knowledgeable expert in setting up a system that meets your organization’s needs.
The cookie cutter approach doesn’t work with financial management because every organization is
different. (See Glen Nishimura’s article in this edition.)
#3 Make sure you have someone on your board that is knowledgeable about financial
management. The Board of Directors has a fiduciary responsibility whether you have the expertise or
not. It’s much better to have it.
#4 Financial Policies are a MUST! If you don’t know what the rules and procedures are, then you are
asking for trouble, particularly as your organization grows. Even for those large or longstanding
organizations, reviewing these policies on a regular basis can identify issues raised by changing laws,
technology and organizational structural issues such as changed staffing patterns.
#5 MAKE SURE YOU HAVE NOT ONLY HONEST PEOPLE WORKING WITH YOU, BUT ALSO THOSE THAT WILL
QUESTION AND SPEAK UP WHEN THEY SEE SOMETHING THAT DOESN’T LOOK RIGHT OR FEEL RIGHT!
When you have a visible ethical value about how you steward the public’s trust and money, you are
preventing problems before they start.
And before you know it, YOU’LL become the expert in your nonprofit’s financial management. Who
knows, you might even start to like it.
Sincerely,
Stephanie F. Meincke, MSW
President & CEO
P.S. Members – be looking out for a letter from me in a couple of weeks that announces some
exciting changes and upcoming events for ACE.
UPCOMING TRAININGS, EVENTS &
PROGRAMS
4 Arkansas Coalition for Excellence | 200 River Market Avenue, Suite 100 | Little Rock, AR 72201 | 501.375.1223 | www.acenonprofit.org 4
Beyond Funding: Building Capacity for Your Nonprofit Hosted by: ACE, Clinton School of Public Service, and the UAMS Translational Research
Institute
Tuesdays, April 2-30
8:30 a.m. to 12:00 p.m.
Clinton School of Public Service
Cost: $125 ACE Members | $175 Nonmembers
(Are you an ACE Member? Click Here)
Register Here
Nonprofit Audits in a Nutshell Presented by: Jenifer Holland, Senior Governance Consultant for BoardSource In partnership
with the National Council of Nonprofits
Thursday, March 28
2:30 p.m. to 3:30 p.m.
Conference Call
Cost: Free for ACE Members Only
(Are you an ACE Member? Click Here) Register Here
Health Care Reform: Where are we now? Where are we going? Presented by: Joshua Osborne and Alexandra Ifrah, Friday, Eldredge & Clark
New Date*: Thursday, May 2
9:00 a.m. to 11:00 a.m.
Arkansas Community Foundation
Cost: Free for ACE Members and Nonmembers
*Please watch for e-mails with registration information
Building Capacity with Pro Bono Presented by: Aaron Hurst, Taproot Foundation and Rachael Chong, CatchafireIn
partnership with the National Council of Nonprofits
Thursday, March 25
2:30 p.m. to 3:30 p.m.
Conference Call
Cost: Free for ACE Members Only
(Are you an ACE Member? Click Here) Register Here
Arkansas Coalition for Excellence | 200 River Market Avenue, Suite 100 | Little Rock, AR 72201 | 501.375.1223 | www.acenonprofit.org Arkansas Coalition for Excellence | 200 River Market Avenue, Suite 100 | Little Rock, AR 72201 | 501.375.1223 | www.acenonprofit.org 5
ACE WELCOMES BOARD EXPERT, SUSAN MEIER
Join us for a rare opportunity to hear and engage with a national expert on
the critical issue of board engagement and effective governance. Susan
Meier, Principal of Meier and Associates, brings over 23 years of experience in
nonprofit boardrooms. As the former Vice President of Consulting and Training
at BoardSource, the premier national organization dedicated to nonprofit
governance, Susan has worked with over one hundred boards and thou-
sands of nonprofit leaders.
Thursday, May 9
9:30 a.m. to 3:30 p.m.
UCA, Brewer-Hegeman Conference Center
Cost: ACE Member $65, Non-Member $95
Register Here
Sponsored by: Delta Trust Investments, Inc. | Hudson Cisne & Co. LLP
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OTHER EVENTS The Summit: Where Volunteer, Philanthropy & Nonprofit Leaders Meet Hosted by: Arkansas DHS Division of Community Service & Nonprofit Support
April 18-19
Embassy Suites, Little Rock
Cost: $110
Click here for more information
Creating Sustainable Funding For Your Nonprofit Hosted by: Arkansas Single Parent Scholarship Fund
Presented by: Terry Axelrod, Benevon
Friday, April 19
9:30 a.m.- 11:30 a.m.
Cost: Free for ACE Members and Nonmembers
Click here to register
Cash Flow from Your 990? By: Reid Smith, Scruggs, Ridge & Company, CPAs
Does your organization provide at least 50% of your employees’
health insurance benefits? If so, your organization may qualify for
the Small Business Health Care Tax Credit for Small Employers,
which is a refundable tax credit based on your health insurance expenses. This tax
credit can provide a refund up to 25% of health insurance expenses providing an
extra boost to your organization’s cash flow and helping offset the ever-increasing
cost of health insurance benefits. A tax-exempt employer with $50,000 in health
insurance benefits could qualify for a refund up to $12,500. On January 1, 2014, the
maximum amount of the credit is expected to increase to 35% for tax-exempt
employers making the credit even more valuable.
The amount of the tax credit is determined on a sliding scale based on the number
of full-time equivalent employees (FTEs) and the average wages. To qualify for the
credit you must have fewer than 25 FTEs with average wages less than $50,000. The
tax credit is reduced if an organization’s FTEs are greater than 10 or if average
wages are in excess of $25,000.
The credit is refundable so your organization can qualify without any taxable
Income. However, the amount of the credit is not allowed to exceed your income
tax withholding and Medicare tax liability.
Tax-exempt employers must file Form 990-T to claim the credit. If your organization
missed the tax credit, you can still amend your 990 for previous tax years and claim
the credit. For more information regarding your organization’s ability to qualify for
the credit or assistance with preparation your 990 please contact Reid Smith, CPA at
[email protected] or call 501-315-3503.
Arkansas Coalition for Excellence | 200 River Market Avenue, Suite 100 | Little Rock, AR 72201 | 501.375.1223 | www.acenonprofit.org
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Arkansas Coalition for Excellence | 200 River Market Avenue, Suite 100 | Little Rock, AR 72201 | 501.375.1223 | www.acenonprofit.org
MEMBERSHIP New and Renewing
Members
The Arkansas Trauma
Education and Research
Foundation, Little Rock NEW
| Arkansas Local Food Club,
Little Rock |
Harbor House, Fort Smith|
Friends of Josephine
Pankey, Little Rock|
St. Joseph Center of AR,
North Little Rock |
One Community, Rogers|
Quality of Life Outreach,
Mena |
Webster University - Little
Rock Campus, NEW |
Friends of Dreamland
Ballroom | Christian Health
Centers of Batesville, NEW |
Dianne Williams, Little Rock
| Argenta Arts
Foundation, North Little
Rock
Want to join our
coalition of over 300
members dedicated to
strengthening the nonprofit
sector ? Contact Rebecca
at 501.375.1223 or email
rzimmer-
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Member of the Month: Economics Arkansas Economics Arkansas wins Nonprofit of the Year Award
Congratulations to Economics Arkansas for
winning the Arkansas Business of the Year
Award in the Non-profit category. The an-
nouncement was made during the 25th Annu-
al Arkansas Business of the Year Awards at the
Statehouse Convention Center in Little Rock
on February 26.
“Increasing the economic and financial
literacy of our population will not only impact
students as they each seek their own American Dream, but it will also impact the
state’s economic development opportunities. Thank you for recognizing our life-
changing and empowering mission of economic and financial literacy,” said Eco-
nomics Arkansas Executive Director Sue Owens as she accepted the award, along
with a check for $2,500 presented by AT&T.
Founded in 1962, Economics Arkansas trains educators to teach economics without
the “eeek” to Arkansas students K-12. Economics Arkansas (previously known as the
Arkansas Council on Economic Education) has conservatively impacted 75,000
teachers over the past 50 years, which translates into 3.7 million students. Simply stat-
ed, they help Arkansas teachers prepare young people to enter our complex eco-
nomic system as adults with “real life skills.” Today’s children are tomorrow’s workforce,
and they cannot afford to leave school without a firm understanding of our economic
system. Economics Arkansas teaches the importance of developing human capital
along with decision-making skills and financial know-how so they will understand how
to manage their resources. In addition, Arkansas students need to understand the
global market, its interdependence and our own free market economy. Arkansas stu-
dents will soon be consumers, producers, savers, investors and voting citizens, so they
should be prepared for this role.
Economists have said that economics is really the science of decision-making. Why do
we make the choices we make every day? As early as Kindergarten, we start making
choices that affect our future. Some are mundane: Vanilla or chocolate? Others are
more complex: Do I study for a test or watch a movie? Others change lives: Do I stay
in school or have a baby? The economic way of thinking helps everybody make bet-
ter choices.
Click here to read more.
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ADVOCACY UPDATES
Arkansas Coalition for Excellence | 200 River Market Avenue, Suite 100 | Little Rock, AR 72201 | 501.375.1223 | www.acenonprofit.org 8
Congress Acts on Current Spending, Future Budgets The House and Senate enacted a $982 billion spending bill that funds federal government
operations and programs through the end of the current fiscal year (September 30), and each
chamber has approved its own budget blueprint for the next ten years. The appropriations
legislation kept in place the $85 billion in cuts to domestic and defense spending that
automatically went into effect under sequestration, but policymakers did make some
adjustments to the across-the-board cuts to prevent a few hardships and anomalies that had
received media attention.
The 2014 Budget Resolutions approved separately by the House and Senate reflect the fiscal
priorities of the two political parties. The House version of the non-binding resolution would
achieve balance by retaining the $1.2 trillion in sequestration cuts, adding more spending cuts,
repealing the Affordable Care Act, converting Medicaid and food stamp programs to block
grants to the states, and revising Medicare. It calls for comprehensive tax reform that removes
undefined tax loopholes, but that does not raise new tax revenues. The Senate resolution calls
for replacing the sequestration cuts with other spending cuts and tax revenues, including
raising $975 billion over 10 years by closing “loopholes” and cutting “wasteful breaks that
primarily benefit the rich.” House and Senate budget leaders must now sit down and try to
fashion a compromise budget from the radically different texts.
Charitable Giving Incentive: Not a Loophole The debate on the Senate Budget Resolution reiterated a point that most charitable nonprofits
have been stressing for years: the charitable giving incentive is not a loophole but an important
policy decision that is vital to communities. Senator Ron Wyden (D-OR) explained at a Budget
Committee hearing that the charitable deduction should not be considered a “loophole” in
the tax code, but a “lifeline” that encourages individuals “to give more than they would
otherwise give.” Senator John Thune (R-SD) stressed during the Senate floor debate that the
charitable deduction is essential to enabling the private sector to fill the needs in communities
that “otherwise would have to be met by government spending.” Likewise, economist Martin
Feldstein explained in aWashington Post article, “The full deduction for charitable contributions
should be retained, because the money that taxpayers give to charity benefits those
organizations rather than the individual taxpayer.”
Volunteer Mileage Rate Legislation Introduced A bill in the House would raise to the business rate of 56.5 cents/mile the rate that volunteers
would be able to deduct from their taxes. Under current law, volunteers who drive their vehicles
when they perform work on behalf of a nonprofit are restricted in tax law to deducting only 14
cents per mile, a rate that is set in statute and has not been changed in decades.
OMB Extends Comment Deadline The White House Office of Management and Budget is extending the comment period for the
Proposed Guidance on Federal Grantmaking until June 2, 2013. The new deadline gives
interested parties additional time to analyze the issues and prepare their comments. The
proposal is available at www.regulations.gov under docket OMB-2013-0001. See earlier article
in Nonprofit Advocacy Matters.
9 Arkansas Coalition for Excellence | 200 River Market Avenue, Suite 100 | Little Rock, AR 72201 | 501.375.1223 | www.acenonprofit.org 9
Seven Basics of Nonprofits Money Management (and some advice) By: Glenn Nishimura, Arkansas Nonprofit Services
We’ve all read the headlines:
“Arkansas nonprofit closed by the IRS for failure to pay
withholding taxes.” “Trusted employee embezzles $50,000.”
“State suspends grant to nonprofit due to questionable
financial reports.”
The better you understand and manage your finances, the better your chances of avoiding
negative headlines.
Money management is about understanding your income and expenses, knowing your net
worth and producing useful financial reports. The most important thing about a financial report
is that it is accurate, understandable, and generates information that helps you make
reasonable decisions based on your capacity and resources
The Basics
Any financial system has the same basic components, whether it is for a family, a business, or
nonprofit:
- Develop and maintain a recordkeeping system
- Track income and expenses
- Create a budget
- Produce regular financial reports comparing budget to actuals
- Get help if you need it
- Understand cash flow
- Build a reserve
Stay in Compliance
As a 501(c)(3)nonprofit, you are required to follow certain state and federal rules. These may
feel bureaucratic and unnecessary but you are going to have to do it so just get it done, and
do them on time. Set up a compliance calendar to remind you when reports are due.
- The IRS requires you to file a 990 every year. The timing depends on your fiscal year.
- The Arkansas Secretary of State requires nonprofits to file an annual report with them
by August 1.
- The Arkansas Attorney General’s office requires nonprofits to register with them, file an
annual report on the anniversary date of their registration, and file annual information
about their fundraising activities by May 15 or 6 months after the end of your
organization’s fiscal year. These requirements are subject to certain exemptions.
If you have a paid staff, payroll reports are especially challenging and can be a constant
headache. Unless you have someone on staff that is comfortable with all the requirements of
payroll reporting, you need to outsource these tasks or look for volunteer help. Read more...
CONSULTANT CORNER
Arkansas Coalition for Excellence | 200 River Market Avenue, Suite 100 | Little Rock, AR 72201 | 501.375.1223 | www.acenonprofit.org
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Columbia Books and Arkansas Coalition for Excellence have joined together to produce the
2013 Arkansas Compensation Report. Thanks to our state participants, members and
nonmembers, the State Salary Survey conducted in the Spring of 2013 will be a collection of
invaluable data on nonprofit compensation specifically in Arkansas. 100 organizations in
Arkansas must participate in order for a state-specific report to be created.
What does the full report include?
- Specific market salary information for over 100 positions including median salaries,
average salaries and more within your state
- Compensation analysis by title, nonprofit type, budget and staff size
- Easy-to-use charts and graphs
How can the report help you?
- Determine the most competitive salary level for each position to support recruitment and
retention
- Understand how your organization’s pay levels compare with others in your state
- Track changes in nonprofit pay levels and trends from one year to the next
- Provide hard data to support your salary structure recommendations
The report has been prepared by experts with over 30 years of experience in conducting
regional nonprofit compensation studies. With 123 job titles and detailed job descriptions, you
will be able to match job titles and actual job content. As a member or non member
participant you will also receive a unique organization code that will allow you to find your
data in the report and compare it to others across Arkansas
When will the report be available and how much will it cost?
State Report:
Members who participated – free
Members who did not participate – $75
Nonmembers who participated – $75
Nonmembers who did not participate – $150
2013 Nonprofit Salary Survey
National Report:
Members who participated – $129
Members who did not participate – $242.90
Nonmembers who participated – $129
Nonmembers who did not participate – $347
Arkansas Coalition for Excellence | 200 River Market Avenue, Suite 100 | Little Rock, AR 72201 | 501.375.1223 | www.acenonprofit.org
BENEFIT OF THE MONTH
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Arkansas Coalition for Excellence | 200 River Market Avenue, Suite 100 | Little Rock, AR 72201 | 501.375.1223 | www.acenonprofit.org
RESOURCES AND OTHER LINKS
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From a Funder’s Lens: Red Flags for Poor Financial Management By: Ann Carrithers, Hot Springs Area Community Foundation
A non-profit receives a large gift because of planning giving. The board and
director immediately think of ways to spend it as soon as possible. No plans are made
for future or unexpected expenses.
An agency has a very successful fund raiser for the purpose of
adding services. However, the budget is tight, and some of the money is used to meet
operational expenses.
A grant is written to purchase needed office equipment. The grant is awarded. The
agency fails to report to the funder at the completion of the proposal.
A grant is written for one purpose, but when awarded, the agency uses the money for
an emergency that arises.
When, and if, extra money is available, endowment building can attract contributors.
Although many foundations will not award grants to agency endowment funds, they
recognize that the agency that has an endowment fund is stable and is preparing for
future financial needs.
Funders have guidelines they must meet to award grants, and their resources are
usually limited, as well. So what do they look for?
Accountability.
Sustainability
Community support
Wise use of gifts and grants
Agencies that meet these standards have an excellent chance of building their
resources with private and public funders.
Nonprofit Finance Fund
For more information on nonprofit financial management check out the
Nonprofit Finance Fund’s blog and read the 2013 State of the Sector Survey results.
Arkansas Coalition for Excellence | 200 River Market Avenue, Suite 100 | Little Rock, AR 72201 | 501.375.1223 | www.acenonprofit.org
JOBS CENTER
Development Director-Arkansas Advocates for Children and Families
Director of Development– Mid America Science Museum
Development Director– Argenta Arts Foundation
Administrative Assistant- Arkansas Advocates for Children and Families
ACE Members can post jobs to the ACE Jobs Board for free as part of their membership.
Click here to create your employer account.
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LEADERSHIP TIP OF THE MONTH
IN THE KNOW
Every Organization Needs a “Lefty”
By: Mike Harbour, Harbour Resources
It is not glamorous. It is not exciting. But it is absolutely essential to the success of any organization. What is
it? Managing your money.
Realistically, there are only two sides to the equation – income and expenses. Managing finances is the
bridge that creates the balance between the two. This is tied to the solid principle of building and battling.
Every organization needs key players at these two ends of the spectrum – the big picture expanders who
are actively growing and building the organization, and the detailed planners who are watching carefully
to be sure the growth is done at a controlled pace. No organization will be strong unless it has these two
components. Too much growth, and the organization will acquire insurmountable debt. Not enough
spending, and it stagnates. Read more...
2013 Nonprofit Salary Survey
ACE will participate in a 2013 Nonprofit Salary Survey through a partnership with the National Council of
Nonprofits and Columbia Books. ACE members who complete the survey will receive a free copy of the
final report. Register today!
The State of Grantseeking – by GrantStation The State of Grantseeking Spring 2013 is the sixth semi-annual informal survey of nonprofit organizations
highlighting the current state of grantseeking in the U.S. The survey results will provide up-to-date
information to help nonprofits as they continue to adjust to current economic conditions and plan their
grantseeking strategies, in addition to giving organizations a benchmark to compare to their own
grantseeking experience. Click here to take the survey.
Thank you for reading this month’s edition of our
newsletter. Questions or Comments? Contact us.
Stephanie F. Meincke, MSW
President and CEO
Emily C. Ingram,
Vice President
Rebecca Zimmermann,
Program Coordinator
Ivan Martinez,
Membership Services, AmeriCorps*VISTA
Located within the Charles A. Frueauff Foundation Offices
200 River Market Avenue, Suite 100
Little Rock, AR 72201
(501) 375-1223
www.acenonprofit.org
Helping Nonprofits Help Arkansas