Jackie McLaughlin, CPA Quality Control and Learning Manager at Chazin and Company, discusses the accounting and financial questions that nonprofit board members should be asking. Jackie elaborates on the importance of active board engagement and the need for board members to ask questions. She begins with a brief story about the Enron collapse to highlight the consequences of not asking important financial questions.

With questioning from Julia Patrick, Jackie discuss the concept of fiduciary responsibility, comparing it to being a parent and making decisions in the best interest of the organization. Jackie explains that board members should approach their role as stewards of the organization and ensure that their decisions are in the best interest of the nonprofit.

The conversation then shifts to budget-related questions. Jackie encourages board members to ask "who, what, when, where, why, and how" to gain a better understanding of the organization's financial activities and decision-making process. They also touch on the importance of budget assumptions and the need to question them to ensure realistic financial planning.

The topic of controls is addressed, with Jackie explaining that controls are in place to prevent and catch mistakes in financial processes. She highlights the importance of internal controls, such as bank reconciliations, and the role they play in detecting errors and deterring fraud. The external component of controls, such as bank statements and audits, is also discussed.

The conversation wraps up by mentioning the significance of policies, including conflict of interest and whistleblower policies, and the need for board members to be aware of these policies. Jackie emphasizes the importance of transparency and board involvement in matters related to executive directors' finances

Chazin and Company CPA, Jackie McLaughlin, provides insights into the importance of gift acceptance policies, the challenges of valuing non-cash donations, and the need for thoughtful decision-making in the nonprofit sector. 
The conversation begins with a look at whether nonprofits should accept all bequests and gifts. Jackie shares an example of a nonprofit that accepted all donations and what occurred over time.  She emphasizes that nonprofits should have a gift acceptance policy to determine what gifts they will accept and what they won't. This policy should consider the physical operating implications and the hard and soft costs associated with accepting certain types of gifts.

The challenges of valuing non-cash gifts, such as art collections or vintage cars also play a role in the gift acceptance decisions. Jackie highlights the importance of having policies in place and suggests that nonprofits should rely on appraisers to determine fair market value. She also mentions that non-cash donations need to be recorded and reported on the statement of activities. The conversation touches on the fluid nature of gift acceptance policies and the need for periodic reviews and policies should be adjusted based on the organization's experiences and lessons learned.

The emotional aspect of gifts and how nonprofits should handle situations where donors have emotional attachments or overvalue their donations is also important. Jackie suggests that nonprofits should rely on their gift acceptance policy to respectfully decline gifts that do not align with their guidelines, while emphasizing the sentimental value of the donation.

The segment concludes with a discussion on the potential pitfalls of non-cash donations, highlighting the costs involved in liquidating and managing these donations and the potential impact on staff time and resources.

In this episode of Counting On Chazin, Maria Injic, the US Director of Client Services at Chazin and Company, shares her expertise on basic accounting for nonprofits with Julia Patrick, from the American Nonprofit Academy.  The interview highlights the significance of financial management and accounting principles for nonprofits and emphasizes the role of board members in understanding and reviewing financial statements to make informed decisions and fulfill their fiduciary responsibilities.
They delve into the concept of GAAP (Generally Accepted Accounting Principles), which provides rules and regulations for accounting practices. While GAAP is not required for nonprofits, it is considered best practice to follow these principles for accurate and comparable financial statements. They also highlight the differences between nonprofit accounting and for-profit accounting, such as the presence of donor restrictions in nonprofits.

Maria explains various financial statements relevant to nonprofits, including the statement of financial position (balance sheet), statement of activities (income statement), and statement of functional expense. She emphasizes the importance of reviewing these statements regularly, with the balance sheet being reconciled monthly and reviewed by board members in financial packets. The statement of activities shows revenue and expenses, while the statement of functional expense breaks down expenses into programming, administrative, and fundraising categories.

They discuss the concept of restricted funds, including permanently restricted funds (such as endowments) and temporarily restricted funds. Maria mentions the recent shift towards trust philanthropy, where donors allow nonprofits more flexibility in how funds are used during crises like COVID-19. The statement of functional expense helps donors understand how nonprofits are allocating their funds.

Julia raises the question of board members' proficiency in accounting terms, and Maria encourages board members to ask questions and seek clarification from finance professionals within the organization. She emphasizes that board members play a vital role in reviewing financial statements and providing valuable insights from their unique perspectives.

The interview concludes with Julia expressing gratitude for the discussion and emphasizing the importance of financial knowledge for nonprofit board members. She encourages viewers to explore the free resources provided by Chazin and Company to further their understanding of nonprofit accounting.

In this episode of "Counting On Chazin," Chris Bavolack, the Director of Finance and Operations at Chazin and Company, discusses the high-level role of nonprofit boards and the challenges associated with understanding and fulfilling these roles.

Chris explains that while everyone involved in nonprofits is passionate about their mission, it's crucial to view the board, staff, and volunteers as a team with defined roles. Just as in sports, each player has a role to play, and if everyone fulfills their role effectively, the organization will succeed. The board's role is to oversee and guide the organization, ensuring compliance, financial health, and strategic direction. Chris acknowledges that many nonprofit CEOs, especially those new to the role, may struggle to understand and manage their relationship with the board. He emphasizes the importance of guidance for both board members and the CEO to ensure everyone understands their roles and responsibilities.

When assembling a board, Chris advises organizations to strategically consider the skill sets they need, such as having board members with finance and accounting expertise, along with individuals who are knowledgeable about the organization's specific area of focus, geographic location, age groups, and key partners. The board's composition should reflect the diverse needs and interests of the organization, including the issue of language diversity and communicating effectively with the communities served. 

The discussion also highlights the board's fiduciary responsibility for the organization's success, financial viability, and compliance. Chris explains that the board's high-level oversight role should focus on key financial indicators, financial health, and overall strategic guidance. The CEO, on the other hand, manages the day-to-day operations, budget, resource allocation, and staff. Chris emphasizes that the board should avoid interfering in staff management, as it can lead to confusion and disrupt the organization's functioning. To address the confusion surrounding roles, Chris suggests three key areas for improvement: the meeting agenda and information provided, the management and leadership of board meetings, and the board orientation process. He advises organizations to provide digestible information to board members, focusing on key financial indicators and important organizational updates. Chris recommends starting meetings with mission-centric topics to avoid excessive time spent on financial reports. He also emphasizes the importance of effective board orientation to introduce new board members to the organization, its mission, and the expectations of their role.

The discussion also covers the impact of an organization's growth on board roles. As nonprofits grow and hire more staff, the board's role should transition from being involved in day-to-day operations to providing strategic oversight, which can be challenging, especially when some board members are accustomed to being heavily involved. However, it's crucial to strike a balance and ensure the board focuses on its oversight responsibilities while keeping passionate individuals engaged through volunteer opportunities.

In this segment of Counting On Chazin,  Michelle Philo, CPA and Director of New Client Experiences and Technical Services focuses on aligning nonprofit strategic plans with budgets, a crucial aspect that is often overlooked, yet is needed to ensure the financial feasibility of initiatives and programs.

Michelle begins with explaining how fundraising is directly linked to the cost of implementing new initiatives or expanding existing ones. She highlights the need to determine the costs associated with these initiatives, such as staffing requirements and inflationary rates.

The discussion delves into the collaboration between the accounting and finance teams and the board or strategic group during the planning process. Michelle suggests that the board should develop the strategic plan, which is then translated into goals and a plan of action by the executive director and their leadership team. The accounting and finance team plays a crucial role in putting financial figures behind the plan of action.

Michelle recommends involving the CFO or financial leaders when working through initiatives to assess their feasibility and identify necessary resources. This helps avoid going off on tangents or proposing unrealistic goals that may not be feasible for the organization. She emphasizes the importance of considering key performance indicators such as donor retention rate, average gift per donor, and cost per client when planning for growth.

The interview also touches on the concept of a five-year rolling budget, where the current year's plan is in focus but is continually adjusted based on feasibility and changing circumstances and Michelle provides examples of how nonprofits can align their strategic plans with budgets, considering factors like grant funding availability, cash flow management, and the need for additional staff or infrastructure.

Interviewer Julia Patrick, acknowledges the disconnect between the narrative nature of strategic plans and the concrete financial aspects required for implementation. She expresses concern over the lack of integration between the two and the potential limitations this may pose.

Michelle explains and amplifies on the significance of cash flow in nonprofits, emphasizing that inflows and outflows may not align. Proper cash flow management is necessary to ensure the organization can meet its financial obligations, such as payroll and supply purchases. She suggests considering reserves and planning for timing differences between grant funds and program implementation.

From GAAP to Form 990, this episode will help you understand the key compliance issues for stakeholders, donors, and board actions.

www.ChazinAndCompany.com

At Chazin & Company accounting is our business, but nonprofits are our passion.  This passion, coupled with years of practical experience, has made Chazin & Company a premier provider of virtual accounting and finance solutions for nonprofit organizations across the country.

What is “mission-driven accounting?”  It’s simple—your mission drives our accounting approach.  Chazin & Company combines a nonprofit’s mission with our highly qualified nonprofit accounting professionals and superior technology.  This combination results in expert advisory services and accurate and reliable financial data.

Watch on video: https://vimeo.com/726564968

We explore the who, what, and why of nonprofit budgeting in this fast paced episode from CPA Martha Huelsbeck.

www.ChazinAndCompany.com

At Chazin & Company accounting is our business, but nonprofits are our passion.  This passion, coupled with years of practical experience, has made Chazin & Company a premier provider of virtual accounting and finance solutions for nonprofit organizations across the country.

What is “mission-driven accounting?”  It’s simple—your mission drives our accounting approach.  Chazin & Company combines a nonprofit’s mission with our highly qualified nonprofit accounting professionals and superior technology.  This combination results in expert advisory services and accurate and reliable financial data.

Watch on video: https://vimeo.com/726566283

Grant reporting can be a complicated process required by your funders.  With the help of our Accounting Implementation Manager, Michelle Jilek, we share how to understand and simplify a reporting system.

www.ChazinAndCompany.com

At Chazin & Company accounting is our business, but nonprofits are our passion.  This passion, coupled with years of practical experience, has made Chazin & Company a premier provider of virtual accounting and finance solutions for nonprofit organizations across the country.

What is “mission-driven accounting?”  It’s simple—your mission drives our accounting approach.  Chazin & Company combines a nonprofit’s mission with our highly qualified nonprofit accounting professionals and superior technology.  This combination results in expert advisory services and accurate and reliable financial data.

Watch on video: https://vimeo.com/726567767

NICRA stands for Negotiated Indirect Cost Rate Agreement and may be a valuable financial tool for any nonprofit organization that receives grant funding. Our own Martha Huelsbeck, CPA gives insight as to how it all works.

www.ChazinAndCompany.com

At Chazin & Company accounting is our business, but nonprofits are our passion.  This passion, coupled with years of practical experience, has made Chazin & Company a premier provider of virtual accounting and finance solutions for nonprofit organizations across the country.

What is “mission-driven accounting?”  It’s simple—your mission drives our accounting approach.  Chazin & Company combines a nonprofit’s mission with our highly qualified nonprofit accounting professionals and superior technology.  This combination results in expert advisory services and accurate and reliable financial data.

Watch on video: https://vimeo.com/726569023

The strings often attached to funding from donors and grantors can be arduous to deal with. Martha Huelsbeck, CPA shares the in's and out's of preparing for and managing pledges and grants that have constraints of use.
www.ChazinAndCompany.com

At Chazin & Company accounting is our business, but nonprofits are our passion.  This passion, coupled with years of practical experience, has made Chazin & Company a premier provider of virtual accounting and finance solutions for nonprofit organizations across the country.

What is “mission-driven accounting?”  It’s simple—your mission drives our accounting approach.  Chazin & Company combines a nonprofit’s mission with our highly qualified nonprofit accounting professionals and superior technology.  This combination results in expert advisory services and accurate and reliable financial data.

Watch on video: https://vimeo.com/726569776