Choosing Your Nonprofit's Fiscal Year

The words "fiscal year" always seem to make an appearance when reading reports about nonprofit finance or accounting. Contrary to popular belief, a fiscal year doesn't just begin when the new year starts; it begins whenever the nonprofit wants it to.

Well, almost.

As explained by Thomas Wolf in "Managing a Nonprofit Organization," a nonprofit's fiscal year can begin at any point during the year as long as its end date is specified in the documents in which it is mentioned. These dates are usually not chosen at random. Whether it's to honor the organization's anniversary or the birthday of a high level executive, fiscal years can have a lot of meaning. As such, great care should be taken in choosing a date.

What makes a good beginning and end to a fiscal year? Wolf laid out three considerations to keep in mind:

• It should roughly parallel the organization’s program year. That is, one year’s program activities should not fall into two fiscal years.
• The fiscal year should end, whenever possible, just before a period of relative inactivity.
• The fiscal year-end may be chosen to coincide with a primary funder’s fiscal year-end and resulting reporting requirements. For example, if a major portion of an organization’s support is from the state government, the nonprofit may select the same fiscal year-end as the state to simplify reporting on state grants.

NJ City Asks Nonprofits For Revenue

The City Council of Lawrence, N.J. is asking nonprofits to "voluntarily" contribute 25 percent of what they would pay in property taxes, in an attempt to generate revenue for the town.

Nonprofits hold more than 90 plots of land in Lawrence Township and account for $287 million of its assessed property value, according to a report in The Times of Trenton. Two of the largest organizations in the town, Lawrenceville School and Rider University, are already making payments to the town, but those fall short of what is now requested.

If the two schools were to agree to a 25 percent contribution, Lawrenceville would have to pay more than $217,852, and Rider University would have to contribute around $141,470. They gave $35,000 and $65,000, respectively, during the last budget year.

"The time has come that we not only seek financial support from Rider University and The Lawrenceville School for voluntary contributions, but, as a matter of equity, we request a voluntary contribution from all tax-exempt organizations in Lawrence Township," said Councilman Greg Puliti in a statement announcing the plan.

While the Lawrence council's plan is voluntary, some experts believe that organizations will see the move as a threat. Linda Czipo, executive director of New Brunswick, N.J.-based Center for Nonprofits, wondered aloud to The Times what will happen when cash-strapped organizations decline to make the payments.

Lawrence is certainly not the first U.S. city to make such a request to local nonprofits. Brown University in Providence, R.I. recently agreed to double its payments to the city, and the Memphis, Tenn. City Council approved a new payments in lieu of taxes (PILOT) program in the beginning of July.

You can read the full story about Lawrence's payment request in The Times of Trenton.

Nonprofit Director Pleads Guilty In Embezzlement Case

The director of Rockingham County's Community Action Program (RCCAP) pleaded guilty yesterday to embezzling almost $1 million from a Sanford, ME nonprofit he headed.

According to a report in Foster's Daily Democrat, 56-year old Thomas Nelson admitted to stealing $900,000 from York County Community Action Corporation (YCCAC) before he left for his new position at RCCAP in New Hampshire two years ago. Thompson had worked for YCCAC for 21 years.

The money was stolen from 2004-2010 and, according to court documents, was used by Thompson for gambling and to pay off mortgage and credit card bills. He is also accused of failing to report almost $400,000 in stolen income to the Internal Revenue Service (IRS), and with creating false income returns for a defunct nonprofit, the New England Community Action Agency, to cover up his theft.

"Through his actions, YCCAC's former Executive Director betrayed the trust placed in him by the board, and compromised the organization's ability to invest in and support initiatives that would have helped our clients," YCCAC's board of directors said in a statement. "Certainly, the organization deeply regrets and shares with the community a sense of anger that those funds were not available for enhancing services to clients."

YCCAC receives its money from a mix of federal, state, and private funding. Nelson's attorney, Jeff Silverstein, and a lawyer representing the organization both confirmed that none of the cash came from the federal government. Nelson instead embezzled from "unrestricted" cash funds controlled by the nonprofit. YCCAC confirmed that it is insured against the losses.

As part of the plea deal, Nelson agreed to pay $1.2 million restitution to YCCAC and $150,000 to the IRS. He also faces the following sentences for each charge he pleaded guilty to:

• Five years in prison and a fine of up to $250,000 on the conspiracy count;
• Up to 10 years in prison and a fine of up to $250,000 on the embezzlement count;
• Up to five years in prison and a fine of up to $100,000 on six counts of tax evasion; and,
• Up to three years and a fine of up to $100,000 on two counts of filing a false tax return.

You can read the full story in the Foster's Daily Democrat.

The August 1 Issue Of The NonProfit Times

Coinciding with the release of this year's Power and Influence Top 50 is the August 1 edition of The NonProfit Times. The P&I 50 will get a lot of the attention in this issue, but there are a lot of other important stories in this month's edition. This includes a special report on the potential impact the 2012 presidential elections could have on the nonprofit sector.

Read on for more details:

Special Report:

• Platform For The Nonprofit Sector: A series of nonprofit leaders discuss the issues both presidential candidates need to focus on during this year's election. Each column focuses on an individual area of need for nonprofits.

Articles:

• Legacy Giving Programs Take Plenty Of Planning: A detailed look inside the work that goes behind donating via planned giving.
• Healthcare: What's Next?: Although the Supreme Court ruled in favor of the Affordable Care Act (ACA), when it comes to implementation it’s a cloudy picture of what exactly is next.
• Funders Focus On Metrics To Improve Outcomes: An in-depth look at foundations that use metrics to evaluate the impact of grantmaking.

Columns:

• Law Vs. Regulation: A recent trend has states targeting not just nonprofits with regulations, but also human services providers.

Make sure to check out the full issue on our website. Happy reading!

NPT Power and Influence Top 50 -- 2012

It has been 15 years since The NonProfit Times revealed its first Power and Influence Top 50 list. Since then, past honorees such as Peter Goldberg and Florence Green have passed away, but their ideas are still foundational in leadership, board management, and entrepreneurship.

The individuals represented in this year 's Power and Influence Top 50 represent all of those qualities and more.

As has always been the case with this prestigious list, the honorees will be celebrated next month at a gala at the National Press Club in Washington, D.C. For some of these individuals, it's their first time on the list, while others are back for an encore. Let's take a look at some of the powerful figures in the nonprofit sector who will be represented this year:

• Robert F. Ashcraft, Ph.D.-Founding Executive Director at Lodestar Center for Philanthropy and Nonprofit Innovation: Ashcraft is turning the academic setting at Arizona State University into a community hub for all things infrastructure and has reached across the border into Mexico to address regional issues regarding philanthropy and capacity building. He is a leader and incubator among his nonprofit academic center peers.
• Diana Aviv President and CEO at Independent Sector: It isn’t easy balancing opposing views in a broad sector, but somehow Aviv pulls it off. The organization is again an important convener of the sector’s power brokers, even if that muscle isn’t used as often as it should be. 
• Dan Busby President at Evangelical Council for Financial Accountability: In one form or another, the nation’s religious community still pulls in the majority of American giving. While there have been some high-profile bankruptcies, the policies Busby has put in place and enforces have staved off the financial scandals that used to come on a regular basis.

We invite you take a look at the full list and see the other nonprofit leaders who were chosen this year. 

Do People Really "Like" Your Facebook Page?

Here's a sobering reminder for you: Just because your nonprofit's Facebook page has a lot of "Likes" doesn't mean people actually like it.

Carie Lewis, director of emerging media at the Humane Society of the United States (HSUS), said at a a session at the recent Nonprofit Technology Conference (NTC) in San Francisco, Calif., that success on Facebook is no longer about how many friends you have. "It's what happens after the 'Like' that matters," she explained.

Lewis went on to present research that revealed an average 90 percent of people who click "Like" never visit the page again, so it's imperative for your organization to come up with reasons for users to want to read your content. As easy as it is to click the "Like" button, it's even easier to click "unlike" or "hide content."

How do you make content more interesting for users? Lewis suggested the following tips:

• Answer everyone.
• Connect with your über-fans.
• Maintain a consistent voice.
• Provide exclusivity.
• Create your own memes.
• Plan it out; but be flexible.
• Don’t be so serious all the time.
• Make real-world events social.
• Use photos and video.
• Show people how their time, money and efforts make a difference.
• Pay attention to feedback.
• Make friends, cross promote.

Reasons To Restructure Your Nonprofit

Change can be tough, but it is often unavoidable. This is especially true when it comes to restructuring parts of a nonprofit.

During the Association of Fundraising Professionals (AFP) 49th International Conference on Fundraising, Robin L. Cabral, director of development for the Sisters of Mercy Northeast Community, talked about a time when her organization needed to restructure its fund development office. This needed to be done due to a large decline in the number of women pursuing religious jobs.

It is tempting to make wholesale changes to your organization when things aren't going well, but there needs to be valid reasons to make it worth the effort. Cabral listed the following as compelling needs to restructure departments:

• When current development function has reached capacity in terms of effectiveness.
• To move toward a different model of fund development.
• To increase the sophistication of the department.
• To surmount a plateau in efforts and be successful.
• To employ a more productive and engaged staff and increase morale.
• To utilize existing resources more efficiently to raise revenue.
• To increase development revenues through a diversified and integrated fund development program.
• To decrease the use of time-consuming, ineffective and costly methods. 

Feds Investigate N.Y. Rep Over Funds To Nonprofit

Federal investigators are looking into millions in taxpayer dollars steered to a nonprofit in Queens, N.Y. by Rep. Gregory Meeks (D-Queens).

The U.S. Attorney's Office issued a subpoena to the Greater Jamaica Development Corp. (GJDC) to find out more about the funds, according to a report in The New York Post. The nonprofit has long been a favorite of Meeks. His mentor, Rev. Floyd Flake, sits on its board and GJDC president Carlisle Towery gave $1,000 to Meeks' re-election campaign in June.

Among the projects funded by the grant money arranged by the Queens representative was $9.2 million from the Federal Transit Administration to repair an underpass below Long Island Rail Road (LIRR) tracks and to create a shopping arcade in the area. Meeks appeared at a lighting ceremony for the long-delayed project in the spring, but the newly built row of storefronts remained empty.

Meeks also helped GJDC get $21 million in tax credits to create housing complexes, retail shops, and a hotel near the Jamaica LIRR station and the JFK Airport AirTrain stop. The deal with the hotel recently fell through and the city's Economic Development Corp. has recently requested development proposals for the land.

This is not the first time Meeks has been a target of federal investigators. He first ran into trouble when The Post reported on his relationship with a Queens nonprofit that he helped found, the New Direction Local Development Corp. The organization collected thousands of dollars for Hurricane Katrina victims, but almost none of that money made it to those individuals.

The House Ethics Committee also has an ongoing probe of Meeks over a $40,000 payment he received in 2007 from a Queens businessman named Edul Ahmad. Meeks failed to reveal this money on his yearly financial disclosure form.

According to its website, GJDC is one of New York City's oldest nonprofits. It was founded in 1962, stressing "economic development as it pursues its community-building mission." The organization states that it is supported by corporate and foundation grants, government contracts, and income from its project operations. Ahmad was arrested in 2011 for his connection with a $50 million mortgage fraud scheme.

You can read the full story in The New York Post.