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You’re in the midst of the fundraising and accounting world tour, and as we get closer to the end of the year, it’s critical to ensure compliance is front and center.
Are you just getting started with your world tour? This blog covers the basics of preparing for the money raised during the fall fundraising season, this blog highlights important financial considerations for fundraising, and this on-demand video helps nonprofits level up their fundraisers.
Year-end giving is critical for nonprofits, especially CFOs and finance teams, who must navigate compliance requirements and ensure financial accuracy during this high-volume donation period. With increased scrutiny from auditors and regulatory bodies, managing donations efficiently and in compliance is paramount.
Finance Team Rockstar Responsibilities
As donations come in, the finance team takes the mic and keeps the organization’s finances on point. Essential aspects to consider include:
- Donation Tracking: Track all donations and ensure each contribution is recorded accurately in financial systems, verify donor information, donation amounts, and the allocation of funds to specific projects or funds.
- Revenue Recognition: Ensure revenue is recognized in the correct period, adhering to GAAP. Distinguish between pledged donations and actual received funds.
- Expense Management: Manage and record all fundraising-related expenses, such as event costs, marketing expenses, and administrative costs, and accurately reflect these costs in financial statements.
- Reconciliation: Perform regular reconciliation of bank accounts and other financial records to capture all transactions and address discrepancies accurately.
- Financial Statement Preparation: Prepare financial statements that accurately reflect the organization’s financial position, performance, and cash flows.
These responsibilities can add up during the year-end giving season. Still, for a rockstar like you, the right tools can streamline these reporting obligations and keep the year-end donation tour on track to exceed expectations.
Complete Compliance Considerations
Just as you’re tracking campaign success, ensuring your organization remains compliant is critical. While compliance standards vary on a state level, these guidelines cover general areas finance teams must handle to stay in compliance:
- Audit Preparation: Show that your organization is a good steward of donated funds. Prepare for internal and external audits by organizing financial records, supporting documentation, and ensuring all accounting practices meet auditing standards.
Tip: Consider if your technology prepares your organization for an audit. Integrated nonprofit software streamlines audit preparation by ensuring donor and financial information are available in one system.
- Grant Reporting: For organizations that receive grants, ensure compliance with grant requirements, including adequately reporting how funds are used and meeting stipulated conditions.
- Internal Controls: Internal controls prevent fraud and ensure the integrity of financial data by segregating duties, requiring transaction authorization, and accommodating a regular review of financial processes.
- Tax Compliance: Ensuring accurate and timely filing of tax returns, including any specific forms related to charitable contributions (e.g., Form 990 for nonprofits in the U.S.), and adhering to tax-exempt status requirements.
- Gift Acknowledgement and Receipting: Teams must properly outline what is required to acknowledge donations for tax purposes.
- Tracking Restricted vs. Unrestricted Funds: Restricted funds have strict parameters governing what your organization can spend funds on. Finance teams must follow those guidelines to remain in compliance.
Like a good tour manager keeps a band in check, finance teams can rely on technology vendors to handle state-level requirements. MIP Fund Accounting and GiveSmart feature a nonprofit software suite with fundraising and fund accounting technology. MIP is regularly updated yearly to keep organizations compliant with federal and state standards.
Meet Your Technological Tour Manager
MIP and GiveSmart ensure your finance team is providing strategic financial oversight and operational efficiency. Integrated solutions reduce compliance risks and improve audit readiness, giving your finance team more bandwidth for strategic planning.
Keep your world tour on track; the benefits of nonprofit software go beyond just that to include:
- Streamline workflow efficiencies. Replace manual data input and file imports/exports processes with an automated approach that streamlines workflows between departments and teams. This eliminates error-prone, time-consuming efforts associated with manual processes and frees up staff to focus on more strategic areas of the organization.
- Access to data and insights. Fast access to data offers real-time financial insights into return on efforts and investment from fundraising, events, and donor engagement.
- Real-time reporting. Robust, accurate real-time reporting to get a holistic view of the fundraising lifecycle, which supports fundraiser planning agility and fuels personalized donor relationships.
- Single solution advantage. The integration is available as a Nonprofit Solution Suite that is not offered by other single vendors in the industry. Nonprofits can benefit from economies of scale by reducing the use of multiple single-point solution tools and multi-vendor solutions. This benefit is scalable and can support long term nonprofit sustainability.
As we approach the end of Fall Fundaplaooza, and your year-end campaigns roll towards the finish line, discover how integrated nonprofit software can transform your organization’s campaigns from one-hit wonders to a streak of multi-platinum records.
Explore the nonprofit suite today.
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