A Facebook post by my fellow blogger Liz Vibber alerted me to Sparked.com, the world’s “first micro-volunteering network” In a fun, engaging way, this site finds out what you are interested in and offers you options (challenges) that use your talents to help nonprofits in meaningful ways--all online.
After reading this article-Would You Volunteer More If you Could Do So in Your Pajamas? by Jessica Roy, I had to check out the site for myself.
In less than 3 minutes, I had selected my interests and entered my talents and was choosing between 2 challenges (both in the research area) to either help a youth organization find potential grantors or to recommend education apps to a school. Both challenges were clearly written and already had three useful responses from micro-volunteers. I felt that I could invest 30 minutes to an hour researching information and be able to provide something of value to the nonprofits.
Across the challenge selection page are four examples of success stories and it is evident that the “group think” process is helping these nonprofits with research, brainstorming ideas, social media, technology, marketing, blogging, etc.
This friendly email is an example of the site's appeal:
We want to be the first to high-five you for becoming a microvolunteer. You may not be able to leap tall buildings in a single bound, but you're using the power of your unique skill-set to help nonprofits. And that's an awesome super-power.
If your organization is looking for ideas, wants to test out a tag line, or needs help in areas related to social media or technology it is worth checking out Sparked.com.
Monday, February 20, 2012
Monday, February 6, 2012
Instructors: Employees or Independent Contractors?
In the past year, we have heard that the IRS is more strictly enforcing employee status for instructors of art and recreational programs. In many cases, municipalities or arts organizations will offer classes and pay the instructors for the classes as independent contractors. However, if the organization sets the time of the class, pays the instructor an hourly rate, and provides the class materials, the IRS is likely to classify the the instructor as an employee. Even if the organization has a contract with the instructor and it seems like they have clearly defined their position, the IRS could still classify the worker as an employee.
The case of the City of Dana Point California is a good study of this situation. You can find more details about the case here. What is important to note is that city had the following items already in place, and the IRS still said the workers were employees:
1. There was a written contract.
2. The city had no control over the class curriculum or the way it was taught.
3. The instructor determined the number of classes offered each session; the length of the class; and the minimum/maximum number of students.
4. The city did not provide training to the instructors.
5. The instructors could provide training (and did) in other venues.
6. The instructor had to find and pay for their own substitutes or assistants.
7. The instructor had to provide their own materials & supplies.
8. The instructor received a percentage of the revenue-not an hourly rate or payment per class. (This demonstrates risk of loss.)
The City had to challenge the IRS in court and ultimately prevailed. However, the IRS has contiuned to take the same position with other organizations and classify the workers as employees.
It is also important to note that even though the City of Dana Point prevailed with the IRS, other organizations cannot point to that situation in their defense. If the IRS classified workers as employees and another organization disagreed, they would have to challenge the IRS on their own given their own situation and how they structure their relationship with their instructors.
Furthermoe, the 8 items noted above strengthened the City of Dana Point's position but many organizations do not have all 8 of those points existing in their current independent contractor situations, and actually have an even weaker case before the IRS.
So, what should you do?
1. Review the IRS site and the issues that the IRS considers.
2. If you decide that the worker is a contractor, document why and make sure you have a contract between the instructor and your organization. Make sure the contract and your agreement is at least as strong as noted with the City of Dana Point.
3. Recognize that even with the documentation and the contract, the IRS still might decide that your instructors are employees and if you will have to remedy the situation and pay related back taxes and possible fines or challenge the IRS in court and pay related attorney fees. Determine if your organization is willing to take this risk.
4. If you decide to classify the worker as an employee---as of the date of this post (2/6//12) the IRS has a Voluntary Classification Settlement Program. You can go to this link to see Form 8952 that needs to be filed as well as related instructions.
Caution: As with any tax or accounting advice on this blog (or any other blog) you should always contact your own tax or accounting advisor for their guidance on your specific situation before taking action.
The case of the City of Dana Point California is a good study of this situation. You can find more details about the case here. What is important to note is that city had the following items already in place, and the IRS still said the workers were employees:
1. There was a written contract.
2. The city had no control over the class curriculum or the way it was taught.
3. The instructor determined the number of classes offered each session; the length of the class; and the minimum/maximum number of students.
4. The city did not provide training to the instructors.
5. The instructors could provide training (and did) in other venues.
6. The instructor had to find and pay for their own substitutes or assistants.
7. The instructor had to provide their own materials & supplies.
8. The instructor received a percentage of the revenue-not an hourly rate or payment per class. (This demonstrates risk of loss.)
The City had to challenge the IRS in court and ultimately prevailed. However, the IRS has contiuned to take the same position with other organizations and classify the workers as employees.
It is also important to note that even though the City of Dana Point prevailed with the IRS, other organizations cannot point to that situation in their defense. If the IRS classified workers as employees and another organization disagreed, they would have to challenge the IRS on their own given their own situation and how they structure their relationship with their instructors.
Furthermoe, the 8 items noted above strengthened the City of Dana Point's position but many organizations do not have all 8 of those points existing in their current independent contractor situations, and actually have an even weaker case before the IRS.
So, what should you do?
1. Review the IRS site and the issues that the IRS considers.
2. If you decide that the worker is a contractor, document why and make sure you have a contract between the instructor and your organization. Make sure the contract and your agreement is at least as strong as noted with the City of Dana Point.
3. Recognize that even with the documentation and the contract, the IRS still might decide that your instructors are employees and if you will have to remedy the situation and pay related back taxes and possible fines or challenge the IRS in court and pay related attorney fees. Determine if your organization is willing to take this risk.
4. If you decide to classify the worker as an employee---as of the date of this post (2/6//12) the IRS has a Voluntary Classification Settlement Program. You can go to this link to see Form 8952 that needs to be filed as well as related instructions.
Caution: As with any tax or accounting advice on this blog (or any other blog) you should always contact your own tax or accounting advisor for their guidance on your specific situation before taking action.
Thursday, January 26, 2012
Behind the Scenes of the Upcoming Super Bowl
Right now T-Shirts are being printed celebrating the victory for both Super Bowl teams. The T-Shirts for the losing team will go to a foreign country. This always sounded good to me until I came across this (older) article here. The article raises some good points. There are no easy answers.
And speaking of donated items, this post at the blog Nonprofit Update by Ulvog CPA notes the need to be careful when valuing gifts in kind on your financial statements. He does a great job outlining the considerations.
And speaking of donated items, this post at the blog Nonprofit Update by Ulvog CPA notes the need to be careful when valuing gifts in kind on your financial statements. He does a great job outlining the considerations.
Friday, December 2, 2011
10 Questions Your Audit Committee Can Ask External Auditors
We have been visiting with many nonprofit boards this past month presenting the 2011 audit. What questions should a Board or Audit Committe ask their external auditors? Here are some to get the conversation started adopted from an article by Boris Feldman:
1. What is your degree of comfort with the company's accounting decisions? How would you characterize the company's aggressiveness/conservativeness relative to other non profits?
2. Did you make any recommendations or suggestions that management did not accept?
3. Are there any employees of the company that you felt were not entirely candid and responsive to you?
4. How would you assess the internal controls at the Organization? What improvements would you make? In what priority?
5. How would you compare the quality of our accounting to other organizations with whom you work?
6. What was your materiality threshold?
7. Are we up-to-date on all of our filings and remittances?
8. Do our investments conform to our investment policy?
9. Are you getting the appropriate cooperation from management? Reluctance to cooperate can signal that there's something to hide.
10. Are there any areas of the financial statements including the notes, in which you believe we could be more explicit or transparent, or provide more clarity to help a user better understand our financial statements?
1. What is your degree of comfort with the company's accounting decisions? How would you characterize the company's aggressiveness/conservativeness relative to other non profits?
2. Did you make any recommendations or suggestions that management did not accept?
3. Are there any employees of the company that you felt were not entirely candid and responsive to you?
4. How would you assess the internal controls at the Organization? What improvements would you make? In what priority?
5. How would you compare the quality of our accounting to other organizations with whom you work?
6. What was your materiality threshold?
7. Are we up-to-date on all of our filings and remittances?
8. Do our investments conform to our investment policy?
9. Are you getting the appropriate cooperation from management? Reluctance to cooperate can signal that there's something to hide.
10. Are there any areas of the financial statements including the notes, in which you believe we could be more explicit or transparent, or provide more clarity to help a user better understand our financial statements?
Thursday, November 3, 2011
Find Capacity, Find Funders
Last month I spoke to the Grant Professionals Association at their annual conference in Las Vegas about attracting more funders by illustrating to them the power of an investment with your organization. I have spoken and blogged (here) about this topic before. It is one of my favorite discussions. Just as my last post discussed ways to tell a compelling story, the numbers can also tell a compelling story.
The story is not just for your donors. It is also for you. We have illustrated for several organizations where they have unused capacity by analyzing the data and the financial information. This has led to the expansion of services and reaching new groups with services. How does this work?
As applicable, we look at the facility usage, staff and volunteer usage, and resource usage to determine maximum capacity. We determine the percentage of this capacity that is currently used. The organization is then able to focus on areas where there is room to grow because there is already existing capacity in this area. They identify the resources needed to use this capacity and can adopt a strategic plan of action. This plan can be communicated to funders and donors and show them clearly how their investment will fuel the expansion of services.
The story is not just for your donors. It is also for you. We have illustrated for several organizations where they have unused capacity by analyzing the data and the financial information. This has led to the expansion of services and reaching new groups with services. How does this work?
As applicable, we look at the facility usage, staff and volunteer usage, and resource usage to determine maximum capacity. We determine the percentage of this capacity that is currently used. The organization is then able to focus on areas where there is room to grow because there is already existing capacity in this area. They identify the resources needed to use this capacity and can adopt a strategic plan of action. This plan can be communicated to funders and donors and show them clearly how their investment will fuel the expansion of services.
Saturday, October 22, 2011
Writing with Passion
Dalya F. Massachi in her presentation, Writing With Passion and Power discussed a number of great writing practices from her book Writing to Make a Difference: 25 Powerful Techniques to Boost Your Community Impact. One that resonated with me was the idea of two levels of “so what” Her illustration: your organization states that a donation of $100 will buy a new clinic massage table. You ask yourself “so what?” The answer—So our volunteer therapists can provide 50 additional revitalizing, healing massages per week to cancer patients in our community. Then you ask again--”so what?” The second level answer—So they will enjoy happier, healthier, more productive, and longer lives and YOU will be part of making that happen.
The answer to the second level “so what” results in getting to the heart of the impact your organization is making. We saw this illustrated at a recent seminar. Our opening question was “what would happen to your community if your organization did not exist?”
All of the organizations answered the question by describing the programs that the community would no longer have. While true, asking a second level of "so what" questions may reveal that graduation rates would decrease harming the future economy of the area; the quality and length of life for area seniors would be decreased; umemployment would increase harming the future economy of the area; and the culture and vibrancy that made the community an attractive place to live would be diminished.
Second level questioning can assist in directing boards and organizations to think with impact.
The answer to the second level “so what” results in getting to the heart of the impact your organization is making. We saw this illustrated at a recent seminar. Our opening question was “what would happen to your community if your organization did not exist?”
All of the organizations answered the question by describing the programs that the community would no longer have. While true, asking a second level of "so what" questions may reveal that graduation rates would decrease harming the future economy of the area; the quality and length of life for area seniors would be decreased; umemployment would increase harming the future economy of the area; and the culture and vibrancy that made the community an attractive place to live would be diminished.
Second level questioning can assist in directing boards and organizations to think with impact.
Friday, October 14, 2011
Economic Outlook--5 Strategies
We have been to several conferences recently that featured an economic update. The consistent message was that the economy is not likely to improve in the near future and even indicated that it could be another five years. Nonprofits have been hit hard—reduced government funding coupled with increased demand for services.
A few things to do, if you aren't already:
1. Prepare a cash flow projection for 6 months, 18 months, and 3 years. Continually roll it forward. Determine now what changes you will make if you don't hit certain revenue targets.
2. Strengthen your volunteer program. Today's volunteers want to contribute in more meaningful ways and you can expand or maintain your capacity with volunteers. Volunteers are also more likely to give to your organization and to give in larger amounts.
3. Individual donors make up 73% of giving (81% if you count bequests and 87% if you include family foundations). I am still convinced that there are individuals who have not yet learned the joy of giving. Make sure you have a robust donor cultivation program and many opportunities to connect people to your organization.
4. Review nonprofit best practices. Talk with others in your field. Make sure your organization is operating efficiently and employing the best strategies.
5. Look for opportunities to collaborate with other nonprofits or even for profits.
A few things to do, if you aren't already:
1. Prepare a cash flow projection for 6 months, 18 months, and 3 years. Continually roll it forward. Determine now what changes you will make if you don't hit certain revenue targets.
2. Strengthen your volunteer program. Today's volunteers want to contribute in more meaningful ways and you can expand or maintain your capacity with volunteers. Volunteers are also more likely to give to your organization and to give in larger amounts.
3. Individual donors make up 73% of giving (81% if you count bequests and 87% if you include family foundations). I am still convinced that there are individuals who have not yet learned the joy of giving. Make sure you have a robust donor cultivation program and many opportunities to connect people to your organization.
4. Review nonprofit best practices. Talk with others in your field. Make sure your organization is operating efficiently and employing the best strategies.
5. Look for opportunities to collaborate with other nonprofits or even for profits.
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