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When Should You Pursue Nonprofit Leadership Development?

July 12, 2021 by Dennis Fischman Leave a Comment

A guest post by Susan Tomlinson Schmidt of the Nonprofit Leadership Alliance

If you’re asking yourself when you should pursue nonprofit leadership development, the short answer is yesterday.

All nonprofits can benefit from improving development opportunities for team members. Not only does it help your team evolve and become better professionals, but it also helps your organization increase efficiency.

Most growing nonprofits are constantly trying to do more with less. Usually, this means decreasing your overhead expenses and focusing on elements of your mission. While development of team members might increase your overhead expenses, over time, it can actually fast-track your organization for success.

Here at The Nonprofit Leadership Alliance, we understand the value of professional development for nonprofits. In fact, we specialize in it! We certify new professionals in the industry each and every year and provide ongoing training opportunities for organizations and individuals.

In this guide, we’ll dive into the benefits that your organization will see when you invest in your teammates. Then, we’ll cover some materials and resources you can use to start your own development program. Let’s get started!

Benefits of Leadership Development

Developing your staff members to become more effective leaders at your organization is the key to growth and success. They’ll not only grow their own skills at the organization, but they’ll also be able to help develop more efficient organizational processes.

This helps you build a reputation of efficiency, raise and allocate more funds, and ultimately create a greater impact on the community. Let’s explore a few other key benefits:

Employee Retention

When employees feel that they’re developing and honing their skills to become better versions of themselves, they’re more likely to stay engaged. This element of personal growth and development is key for staff members to maintain high levels of satisfaction in their careers.

When you invest in your employees, they’ll stick around and invest back in your organization. However, if you fail to provide an engaging workplace, you could cost your organization a lot of money in turnover costs.

In other words, it pays to retain employees! When you add up the expenses that accompany hiring, training, and getting new staff up to speed, it becomes very expensive to start seeing return on a new hire. If you’re curious about how much you might be actually spending on employee turnover, this calculator can help you identify the cost of not retaining your team members.

Of course, professional development isn’t the only way to retain employees, but it is one of the most effective. 93% of employees say they would stay longer at their jobs if their employer invested in their careers.

Fundraising Efficiency

Training your staff members to become better professionals leads to new ideas for efficiency at your organization and increased productivity overall.

For instance, if you focus on developing communication in your organization’s future leadership, and they’re currently in a fundraising position, they’ll likely transfer those skills to communicate effectively with your supporters. This results in higher fundraising revenue for your nonprofit.

Organizational Growth

Not only will individual staff members become more efficient in their position at your organization, but they’ll also teach their coworkers to do the same. Good habits and ideas will trickle down the ranks to help your nonprofit grow from within.

The last thing you want at your organization is for your leadership to leave. But what’s worse is when they leave without leaving their mark on your other team members. Help all team members grow and develop, then also encourage them to help one another create the most holistic growth strategy at your organization.

Resources to Implement Development Opportunities

Developing leaders at your organization helps in multiple ways for both the individual and your organization as a whole. But how can you pursue this development? We’ve pulled some of the top resources we discuss in The Nonprofit Leadership Alliance guide to professional development, including guided online resources, books, and journals.

Guided Online Resources

You can find plenty of guided online resources to help your team learn and develop. What constitutes these guided resources? Usually, they’re structured as online nonprofit courses that help walk learners through challenging material.

Generally, these online courses are designed with modules that guide individuals through content one bit at a time, with various elements and engaging opportunities to enhance the learning experience. For instance, you might read through definitions of keywords on one module, then watch a video to provide an example of what you just learned in the next.

Books

Lessons can be learned from just about any literature, from an instructional pamphlet to a children’s novel. In particular, there are books targeted to the nonprofit sector that you can lean on to gain general knowledge on a range of topics.

Look for books published by your favorite consultant or ask them for recommendations. Then, invite your team members to read these books and take notes on their insights. You might even start a lunch-time book club to cover some of these insights and to discuss how they can be applied to your organization.

Journals

There are publications everywhere that keep tabs on what’s happening in the nonprofit world. Keeping up with academic journals and other publications, like blogs from trusted sources, is a great way to keep up with the latest trends in the nonprofit industry.

Quickly advancing technology and legislation updates usually take a while (at minimum a month) to hit the nonprofit course scene, and even longer to make its way into books. That’s why it’s important to also encourage staff members to keep up with journals, blogs, and other online reading materials to understand the latest news. Everyone will learn how to effectively react to it and make decisions for your organization.

Wrapping Up

Professional development for nonprofit leaders is a key aspect of growth for the entire organization. According to Double the Donation, 85% of employees are not engaged in the workplace. But providing professional development opportunities can change that.

Ready to get started? Choose a development resource and dive in!

Susan Tomlinson Schmidt has dedicated her life to serving others through more than 25 years advancing the missions of social-impact organizations. Currently, Schmidt is the Nonprofit Leadership Alliance president, an organization that develops talent for the nonprofit workforce.

She received her master’s in public administration from the University of Memphis and is a Certified Nonprofit Professional. Schmidt and her husband, David, a professional chef, have two sons, Patrick and Walker. They live in Leawood, Kansas.

4 Best Practices For Staying Tax-Exempt as a Nonprofit

June 28, 2021 by Dennis Fischman Leave a Comment

A guest post by Mathew Tooker of File990

Receiving tax-exempt status is an essential part of getting your 501(c)(3) nonprofit organization off the ground. However, retaining that status requires an annual filing process to ensure your organization continues to spend its funding responsibly.

At File 990, we’re passionate about nonprofit taxes and equipping organizations with the tools they need to streamline basic accounting and tax processes. We also know that small to mid-sized nonprofits and community organizations often don’t always have dedicated tax professionals on staff. Yet your mission shouldn’t suffer for it!

In this guide, we’ll share the most critical information you need to know, including the foundations of IRS Form 990 and our tried-and-true tips for staying tax-exempt year over year. Let’s get started!

What is IRS Form 990?

IRS Form 990 is an annual tax form that is required of most nonprofit organizations. What’s the purpose of this form? To keep your organization tax-exempt and retaining your 501(c)(3) status.

When you file your 990, you provide key information about your nonprofit finances, including a summary of your activities and programming throughout the year, an overview of your governance structure, and a basic look at your expenses and revenue. This way, the IRS can look into your organization and ensure that your funds (including grants and charitable donations) are properly handled. Without it, your nonprofit risks substantial fines and, eventually, may lose your tax exemption.

However, completing your yearly 990 can do even more for your organization than keep your team up to IRS standards—it can function as a marketing tool for attracting and retaining generous donors. Upon completion, your Form 990 is publicly available, meaning supporters and prospects can have a look at your finances as well. When they see the good work your organization is doing as it is funded by generous gifts, they’ll be more inclined to give.

Tips for Retaining Tax-Exempt Status

Now that you understand the purpose of Form 990 and why the IRS requires you to file every year, let’s jump into our favorite tips for staying tax-exempt as a 501(c)(3) nonprofit.

1. Choose the correct form.

As a 501(c)(3) organization, you know you’ll need to file IRS Form 990. However, did you know that there are multiple versions to choose from?

Here’s a basic comparison between the four most common versions of Form 990 to help you determine the right one for your team:

990: This is the complete version of the form and must be filed by organizations with gross receipts of more than $200,000 per year.
990EZ: The next step down from the full version, the 990EZ is filed nonprofits with gross receipts between $50,000 and $200,000 per year.
990N: This is the most simplified version of the form and is only available to organizations with gross receipts of less than $50,000 per year.
990PF: The “PF” in this form stands for private foundation. As such, this form is filed by all 501(c)(3) private foundations regardless of financial status.

If you run a small to mid-sized nonprofit, you’re probably looking at 990N vs. 990EZ. These abridged versions are shorter and simpler to complete, which is a nice bonus!

Just because you’ve been eligible to complete the e-postcard (or 990N) in the past doesn’t mean you will be forever. If your organization has had a boost in revenue over the last year, it might be time to look into moving up to one of the more comprehensive forms to ensure you’re complying with IRS standards.

2. Submit your form before the deadline.

Once you’ve selected the tax form that is required of your organization, it’s time to determine the date by which you’ll need to submit your documentation. Take a look at our File 990 guide to the Form 990 deadlines that explains how to determine your organization’s deadline as well as consequences for failing to file and how to request an extension. Here are a few key notions to be aware of:

Your deadline for submitting your form is the 15th day of the 5th month after your fiscal year ends. For organizations following the calendar year, the deadline is May 15th.
You will be fined up to $100 per day that your return is late, with a maximum penalty of $50,000 or 5% of your gross receipts (whichever is less).
After three consecutive years of failing to file your 990, your organization will lose its tax-exempt status.

Luckily, you can avoid all of these potential challenges by simply filing your 990 before your deadline. Just figure out your due date, get started well in advance, and be sure you have a reminder set every year!

3. Make sure your document is complete.

Another thing you’ll want to check before sending your tax form (whether physically or digitally) is that you’ve completed everything you need to on the document. If you’re missing vital information on your first submission, you can be penalized as if you hadn’t completed the form in the first place.

To ensure your organization remains tax-exempt, be sure to double-check your submission before sending it in the IRS. According to the IRS website, “The date we receive a complete and accurate return is the date we consider your return filed.”

4. Leverage low-cost filing software.

One significant trend we’re seeing more of in the nonprofit space is organizations using online filing software rather than investing in a dedicated accountant. Especially for smaller organizations (with gross receipts under $200,000 per year and are eligible for the 990N or 990EZ), filing your annual tax return with the help of a dedicated e-filer is completely attainable.

Plus, the right software provider can help make sure you follow the first three tips as well. By ensuring you fill out your form completely before submitting it, offering guidance on selecting the form your organization needs, and sending automated reminders as your deadline approaches each year, a nonprofit tax filing software can help save your organization time and money that can be reinvested in your cause. Not to mention, your e-filer can even save relevant information year over year, making the re-filing process simpler than ever.

All in all, filing Form 990 is one of the most important things you can do as a nonprofit each year—both for IRS requirements and for ensuring complete transparency with your donors.

Mathew’s expertise is in sales forecasting, goal setting, client growth initiatives and business development and analytics. When he is not laser focused on moving organizations forward, you can find him spending time with his wife, Lauren, and two dogs, Reagan and Teddy, running marathons and watching the Atlanta Braves and Auburn sports.

Fundraising Tuesday: How Silent Auctions Get The Word Out for Your Nonprofit

June 22, 2021 by Dennis Fischman Leave a Comment

A guest post by Jeff Porter of Handbid

Nonprofit trends have changed dramatically in recent years. A few event types consistently prove to be successful for earning donations and long-term support. Silent auctions are particularly effective for getting the word out about your cause to your audience. This includes your current supporters, new donors, and potential business partners.

Silent auctions have several moving parts, making them more complicated than other fundraisers. With the right auction software, auctions can reach supporters in ways other fundraisers often struggle to do. After all, few other fundraisers offer donors something in exchange for their contributions.

To show how effective auctions are, this article will cover three ways they can help your nonprofit:

Engage donors in a memorable event.
Attract new audiences.
Create connections with local businesses.

Engage donors in a memorable event.

Browsing auction items, bidding, and winning a prize is outright fun for your donors. At the end of the night, many of your guests will go home with a physical reminder of your event. Supporters who talk about their prizes with their friends and family will likely mention where they won them.

Handbid’s silent auction guide recommends procuring prizes that are experiences. This could include classes, vacations, or small day-out prizes like a massage or spa trip. While these prizes aren’t physical reminders, supporters will need to redeem them later. This means the auction they won them from will stay on their minds.

The only catch for creating a memorable experience is intertwining your nonprofit with your auction event. Some supporters may share with friends and family that they had a good time. Unfortunately, they might not remember what cause their bids supported. You can get ahead of this problem by educating supporters on your mission through your outreach and the event itself. This applies to announcements, printed handouts, and thank you emails.

Attract new audiences.

Silent auctions give supporters a new reason to donate. Unique auction items might attract supporters who hadn’t considered giving to your cause. Silent auctions are also super flexible in how they can be run. Their format allows for in-person, online, and hybrid events, which all can attract new supporters:

In-person auctions appeal to local community members who live close enough to attend. At in-person auctions, you can solidify your connections with long-term local supporters. Don’t forget to also welcome new supporters who have recently moved to your community.

Online auctions allow your nonprofit to connect with supporters all across the country. Virtual events have risen in popularity because of their global reach and lack of venue and catering costs. Online auctions can last for several days, so more supporters can discover your auction and cast a bid.

Hybrid auctions engage your local supporters, your remote supporters, and anyone who prefers to attend from home. These events allow supporters to decide how they engage, letting them choose how and when they interact with your nonprofit.

Auctions can help your nonprofit excite both new and current donors by marketing high-value and unique items. The chance of winning something can be as much of a reason to attend as the opportunity to support your cause.

Create connections with local businesses.

Your nonprofit will need to get auction items from somewhere. This makes auctions a great opportunity to reach out to local businesses. Bear in mind that not every connection will lead to a corporate sponsorship. 360MatchPro’s guide to corporate philanthropy points out that many businesses support charitable causes to improve their image and attract new customers. In other words, they have good reason to support your nonprofit—you’ll just need to do a little work to point it out to them.

Contacting businesses is a multi-step process. Not to mention, acquiring a full item catalogue can take months. Here is a breakdown of how your procurement team can start reaching out to businesses:

Create a list of potential business sponsors. Your team will need to research local businesses that cater to your audience. Then, create a list of potential partners. Likely candidates are businesses that have supported similar events, are doing well financially, or offer a product or service related to your nonprofit or event. Ideal partners will fit all three of these criteria.

Reach out to middle and low-priority businesses. With practice, your team will get better at appealing to businesses. Start with lower priority business partners. Your team can refine their approach without the stress of talking to one of your dream partners.

Follow up and thank businesses. After your event, follow up with a sincere thank you. Mailing thank you cards shows your nonprofit’s dedication to your professional relationships. Calling them on the phone after your event to thank them can open the door for future collaborations.

Remember that some businesses will prefer to support your event in different ways. Some might donate items or offer them at reduced prices, while others prefer to make a cash donation. No matter how they give, be sure to tell them thank you.

Jeff Porter, Founder & CEO of Handbid, has spent 18 years in the non-profit industry. In 2004 he founded the Prader-Willi Syndrome Association of Colorado where he still resides as board chair.

Jeff learned early on that non-profits desperately needed better and more affordable fundraising solutions. Leveraging his software background, he built most of the tools his charities used, and in 2011 he launched Handbid at his own fundraising event. The goal was to improve the guest experience, reduce administration and increase revenue. Handbid accomplished all of those goals, effectively doubling revenue in its debut. Nine years later, Handbid’s suite of tools has delighted over a half-million guests, generated millions of bids, and helped thousands of charities raise well over $100 million.

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When Should You Pursue Nonprofit Leadership Development?