Communicate!

Helping you win loyal friends through your communications

This blog will help you win loyal friends for your nonprofit organization. I'm Dennis Fischman, and I approved this message.

Free guide:

Which Social Media are Right for You?

Sign up here to find out!

Nonprofit Financial Literacy: Managing Funds Responsibly

by Leave a Comment

A guest post by Chris Troupe of UnionWare

As a nonprofit professional, one of your goals is to raise as much money for your cause as possible. However, if you’re like 47% of American adults who give their financial literacy knowledge a grade of “C” or worse, you might not have all the knowledge you need to achieve the best results possible for your beneficiaries.

By building a firm foundation in financial literacy and continuously expanding your skills, you can help sustain your nonprofit’s growth and guarantee its longevity. You’ll also be able to communicate more effectively with donors about your impact, fortifying trust and your relationships with them.

As we explore the fundamentals of nonprofit finances, remember that financial needs might change significantly over time, so treat these tips as the building blocks of your strategy.

Understanding Financial Basics

Financial needs vary greatly depending on a nonprofit’s size and niche, but the same general principles apply. Your team should be familiar with the following financial terms and concepts:

Budgeting

  • Cash flow is the total amount of money transferred into and out of a nonprofit in a given period of time.
  • Revenue streams are different sources of revenue that contribute to mission-critical efforts and overhead costs. For instance, nonprofits can rely on donations, grants, and e-store purchases to fund their mission, while member-based organizations like unions might rely on dues.
  • Assets are tangible (property) and intangible (fundraising revenue) items a nonprofit controls that add value.
  • Liabilities are debts or obligations nonprofits owe to other entities (like banks or the IRS).
  • Restricted funds come with specific rules for their use, usually from a grantmaker.
  • Unrestricted funds are awarded without specific conditions for how they can be used.

IRS Forms

  • Form 990 is an annual form reporting all nonprofit financial activities and is required to maintain tax-exempt status.
    • Form 8868 is for nonprofits to request an automatic 6-month extension to their Form 990 deadline.
  • Form W-9 requests taxpayer identification for grant recipients, vendors, and contractors receiving payments from a nonprofit.
    • Form 8283 is required for donors who contribute over $500 in non-cash gifts to a nonprofit to claim tax deductions.

Financial Roles

According to Jitasa, here are the prominent financial roles in the nonprofit world:

  • A bookkeeper is responsible for daily financial record-keeping activities, like tracking expenditures, managing payroll, and writing checks.
  • An accountant is responsible for financial analysis based on the information your bookkeeper maintains.
  • A treasurer is the leading financial expert on your board of directors, overseeing your financial policies and reporting on progress to the rest of the board.
  • A chief financial officer (CFO) is a staff member who strategizes for a nonprofit’s financial future based on cash flows, grant funds, and more.

Creating a Sustainable Funding Strategy

Inspiring donors to give is only the first step in securing reliable funding—here are other best practices to get you started:

  • Over-estimate your expenses. Mitigate the impacts of expenses as much as possible by creating a cushion in your budget. Doing so helps you prepare for worst-case scenarios and come out ahead.
  • Cultivate long-term partnerships. Building relationships with donors, sponsors, or grantmakers from the ground up is time- and resource-intensive. Staying connected with supporters you’ve already built a relationship with can help you earn funding more efficiently.
  • Diversify your revenue streams. Relying on just one funding source can jeopardize your nonprofit if anything happens to that stream. Instead, implement a diverse fundraising strategy that might comprise traditional donations, corporate sponsorships, peer-to-peer fundraising, and grants.
  • File tax forms on time. According to File 990, filing Form 990 late compromises your tax-exempt status and can result in additional fees for your nonprofit. Submit Form 990 well before the deadline and file an extension request if you can’t meet it.

Ensuring Compliance and Transparency

With special IRS distinctions and duties to donors come special compliance requirements. After all, your donors deserve absolute transparency into what you’re spending their money on. Ensure you understand the following compliance and transparency best practices:

  • Create an annual report explaining your past year’s activities, accomplishments, and financial performance.
  • Maintain accurate financial records with the help of your financial team so you can convey your impact accurately to supporters and the IRS.
  • Implement internal financial controls like separation of duties, dual approvals for expenses, and audits to prevent intentional and accidental fraud.
  • Implement a conflict of interest policy, so staff and board members disclose any conflicts that might influence decisions to their benefit.
  • Address supporter concerns openly and honestly so you don’t mislead anyone and breach their trust.
  • Brush up on IRS regulations each year, both at the national and state levels, to remain compliant throughout policy changes.

Take the time to help donors understand your nonprofit’s financial decision-making and the state of your financial health. Doing so demonstrates to donors that you value their input regarding your financial strategy and boosts their engagement in the long run.

Using Financial Management Tools

Some nonprofits don’t have the resources to hire a full in-house financial management team, but there are low-cost and easy-to-use solutions you can leverage to stay effective. For instance, you could hire a fractional CFO or nonprofit accountant for a lower investment than a full-time team.

For a more independent approach, your nonprofit can use financial management software to reconcile your data and strategize for future growth. Some well-known solutions include QuickBooks for accounting and Bloomerang for donation reporting and processing.

Every nonprofit’s ideal tech stack looks different. The only must-have is a solution that meets your needs and niche. For instance, union management software likely has different functionalities than association management software, so choose the solution most aligned with your needs.

Remember, this guide is only the beginning of your financial literacy journey. Take courses from reputable sources, attend conferences, ask trusted colleagues questions, and stay on top of financial trends to ensure your knowledge evolves over time. It takes practice and patience, but soon, these financial best practices will become second nature and empower your nonprofit to grow sustainably.

Chris Troupe

Chris Troupe is the Marketing Manager at UnionWare, a membership database and organization platform for Trade Unions. Chris supports organizations in streamlining operations, automating communications, and building strong communities.

Promoting Nonprofit Events on Instagram

by Leave a Comment

A guest post by Jeff Porter of Handbid

Planning a successful event for your nonprofit can be a challenging and resource-intensive task. In addition to all the work you’re putting into planning the event, you’ve also got to make sure that people attend! While promoting your event to ensure you meet attendance goals can feel overwhelming, especially if you’re facing tight budgets, you don’t need to worry. Social media sites like Instagram can help you effectively promote your event on the cheap.

With the right strategy and implementation, Instagram can be a powerful and cost-effective tool for nonprofits to promote their events, reach new supporters, and drive attendance. Let’s explore some best practices that you can use to promote your event on Instagram.

1. Post Interactive Content

When it comes to promoting events on Instagram, engagement is key. By creating content that invites followers to engage, share, and participate in the conversation, you can expand your reach organically and inspire excitement among your supporters.

Instagram has several intuitive features you can use to easily add interactive elements to your content and enhance your event marketing strategy. Here are a few places to start:

  • Polls and Quizzes: These simple, fun tools encourage followers to interact with the content you post on your Story. You can use polls to ask your audience what they’re most excited about at the event or what silent auction items they’re planning to bid on. Quizzes can also be a playful way to get people thinking about your cause or event.
  • Q&A Buttons: The Q&A sticker on Instagram Stories allows followers to ask you questions, which you can answer in real time. For an extra personal touch, a staff member could do a “takeover” of your account, posting short videos to answer each question submitted.
  • “Add Yours” Button: This sticker invites followers to post their own content related to your event, which you can then share on your nonprofit’s page. For example, you could prompt followers to share photos of themselves preparing for the event or a message about why they’re excited to participate. It’s a great way to inspire user-generated content and create a sense of community among your supporters.
  • Instagram Live: Going live on Instagram is an excellent way to give a real-time, interactive experience to your followers. Host a live preview of your event, conduct interviews with sponsors or speakers, or even give a tour of the venue. Not only does this foster engagement, but it also offers a behind-the-scenes look that makes your followers feel more involved in the event before it even starts.

As you experiment with these features, check out other nonprofits’ profiles to see what’s working for them. Each feature offers unique ways to engage your audience, so don’t be afraid to try different combinations to see what resonates most with your followers.

2. Create a Hashtag for Your Event

Hashtags are a fundamental tool for nonprofit marketing on Instagram. When you create a unique hashtag for your event, it not only helps followers easily find and follow event updates, but it also makes it easier for you to track and engage with conversations surrounding your event.

Once you create a fun hashtag for your event (like #HoustonPawsGala), remember to use it in all communications so it sticks in supporters’ minds. This includes:

  • Event invitations
  • Event reminders
  • Posts leading up to the event
  • Posts during the event

This way, it will become a recognizable symbol of your event, making it easier for new followers to discover and get involved.

You can also encourage attendees to use the hashtag before and during the event. This will help create a sense of excitement and community while increasing visibility.

For instance, say your organization is using an online auction platform to host an exciting hybrid event all your supporters can attend. You could create a hashtag like #AuctionForACause2024. Use this hashtag in all of your Instagram posts and Stories promoting the event, and your guests can also use it when sharing their experiences online.

3. Collaborate with Event Sponsors

When you’re working with a tight event budget, leveraging partnerships and sponsorships can be a game-changer. Instagram offers a powerful platform for cross-promotion, where both your nonprofit and your sponsors can benefit from increased exposure. Collaborating allows you to tap into their audience and broaden your event’s reach without spending a dime on advertising.

Once you’ve secured a sponsorship, here’s what cross-promotion might look like:

  • Corporate Sponsors Sharing Event Flyers: Ask your sponsors to share your event flyer or promotional posts on their Instagram Stories or feeds to get the word out and generate excitement among their followers.
  • Behind-the-Scenes Content from Sponsors: If your event has a venue sponsor, ask them to create a behind-the-scenes video or tour of the venue. Not only will this give your audience a sneak peek, but it will also showcase your sponsor’s involvement in the event.
  • Teasers for Auction Items: If a sponsor has donated items for your auction, ask them to post teasers about their contributions. For example, a local business might share photos or videos of their donated item, enticing their followers to attend the event and bid.
  • Influencer Collaborations: If you have sponsors who are influencers or well-known figures in your community, ask them to promote the event on their Instagram pages. Even a simple shout-out can go a long way in raising awareness and encouraging attendance.

By building these partnerships, you not only reduce your marketing costs but also create a mutually beneficial promotional strategy that helps both parties reach new audiences. Be sure to discuss these opportunities with your sponsors early in your event planning process to ensure seamless collaboration.

Jeff Porter Jeff Porter, CEO

Jeff is no stranger to fundraising events, having participated in them for over 25 years. He ran his first fundraiser in 2005 and has managed over 50 auction events and fundraisers for his own charities, not to mention hundreds more with Handbid.

Jeff has been involved in technical product and software development since 1996 and has built and managed mobile app solutions since 2008. When it became clear that he and his wife, Kari Porter, needed a better solution for their fundraisers, developing a mobile bidding app was a no-brainer. The result? Jeff and his wife Kari developed and launched Handbid in 2011. The rest is what they call “history.”

Telling donors’ stories: a short guide

by Leave a Comment

When someone gives your organization a gift and then agrees to talk about why, their story is an additional gift to you.

Donors do not have to talk with you: in fact, some prefer never to hear from the organization in person. They certainly don’t have to let you use their story in your newsletter, online in your website or social media, or in your fundraising. If they do agree, they are expressing generosity in a priceless way. No one else has the exact same story. It’s unique, and they are giving it to you.

So, approach each donor with love, treat them with respect while you are gathering their story, and then show your gratitude ever after. Share on X

Here are some ways to do that.

  1. A donor may spontaneously comment on why they are giving their gift. If it’s a “quotable quote,” ask permission to use it (and tell them how). Always ask, and never use it without their consent.
  2. Most of the time, you have to take the initiative. Get in touch with the donor and ask if you can have fifteen minutes to interview them about the path that led them to support your organization.
  3. When you talk, here are some questions that may get their conversational juices flowing:
    1. How did you first get involved with this community/organization?
    2. What drew you closer to it?
    3. What made you decide to donate? Was it a specific need you wanted to fill, or…?
    4. What do you hope the organization will be more able to do because you gave?
    5. What would you tell someone else who was considering making a gift to this organization?
  4. Thank the donor for the additional gift of their story ASAP after having the conversation. Reiterate how you hope to use it and let them know you’ll be in touch before anything about what they said goes out to an audience.
  5. Draft the telling of their story in brief, from your notes. Run the draft by them before publishing it in any form.
  6. Create a story bank where you keep notes, quotes, photos, and consent forms when that’s appropriate (especially when the story involves children).

Yes, I’d like weekly email from Communicate!

Get more advice

Yes! Please send me tips from Communicate! Consulting.

Subscribe to Blog via Email

Enter your email address to subscribe to this blog and receive notifications of new posts by email.