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Nonprofit Management

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In my last post, I questioned the validity of using ‘percent of income spent on mission’ as a valuable measurement of an organization’s effectiveness. This is an easily manipulated number. If the organization is based in dishonesty (we all know they exist), they’ll have no hesitation with shifting numbers around to come in at a threshold to avoid scrutiny. 
 

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You may have read that Oregon passed a law in June (House Bill 2060) imposing restrictions on nonprofits spending less than 30% of their annual gross income on their charitable mission. This law would remove the tax exemption on disqualified donations and would eliminate any property tax exemptions the organization receives in Oregon, in addition to eliminating other subsidies. Doesn’t that sound great? Let’s punish those darn low percentage performers!



Not so fast…things are not always as they seem.

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The end of 2012 is very significant for many small non-profit organizations. Why? Because once December 31st rolls around, their chance to get their non-profit status back at a reduced price will be gone.

 

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There is a letter writing function within the QuickBooks program.  It is a pretty handy application, and one that I have to admit has frustrated me in the past.  If you use QuickBooks as your accounting software and track your donors with it (which you can), this letter application becomes a really great way to send letters to them.

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I got a frantic phone call from my friend April last week.  Her animal welfare organization had been lucky enough to get office space donated.  She followed all the best practices, including sending him a thank you letter confirming his donation.  The donor called to tell her the in-kind donation he claimed on his tax return had been rejected by the IRS.

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