2020 is slowly coming to a close, but it will be gone before you know it. Funny how we have this conversation every year. Although, I think many of us will be glad to see this year go in hopes that next year will be less…eventful.
Just as December 31 rolls around every year, so does the need to plan for your nonprofit’s year end. With only a few weeks left in the year, don’t put off some of the most important things you need to be doing right now until later. Let’s take a look at some key year-end forget-me-nots that absolutely require your attention.
The economic uncertainty of the past year has forced many nonprofits to shift gears and even change course. For some, it has caused an existential crisis! What has the economic downturn and coronavirus meant to your organization? The end of the year is a natural time to (re)evaluate what you are doing. Focus on maximizing impact for a minimum expense. Easier said than done, no doubt. But now more than ever, it is imperative to be intentional with everything you are doing. “Winging it” is ineffective even in the good of times. It could be fatal in the bad.
What is the current state of your financial recordkeeping? Good, bad…or ugly? Hopefully it’s more good than bad. If it’s ugly…well, you’ve really got some work to do. The fact is, you have a legal requirement to maintain proper financial records. Furthermore, you owe it to your donors and beneficiaries to know where the money is going. If your bookkeeping status lies anywhere south of good, get it fixed. If necessary, hire someone who knows how to do this. The truth is, the legalities are not even the most important reason to get this right. You cannot effectively manage your organization without consistently good financial recordkeeping. With a world still full of uncertainty, thoughtful budgeting and recordkeeping will be the difference between failure and survival for many nonprofits.
Don’t victimize your own organization. It is hard enough to run your programs. You certainly don’t need to be battling government agencies. If you know there are things you should be doing but you are not or if there are things you are not doing that you should be, purpose to get it straight before the new year starts. I know it seems like we harp on this all the time. And, you’re right…we do! It’s our job to bug you about this. Think about it this way: you see your organization every day; we see yours and many other organizations every day. If you saw the carnage caused by noncompliance that we see, you would better understand why we are so adamant that you get your house in order…before Uncle Sam forces your hand.
Maybe your organization is not on the brink of financial collapse. Maybe you have been staying within your budgets. You may even be in pretty good compliance with everything you know to do. But how is your effectiveness, your overall organizational health and fitness? Are you accomplishing your mission, or just going through the motions? Are your supporters sacrificing to give to your organization? Even in the difficult times, people give to “vision.” If things have grown stagnant, it is time to ask, “Why?” Brutal honesty is required, or you should not waste your time asking the question. Just be prepared for the answers. Some will be technical in nature and relatively easy to fix. Others will be organic and systemically rooted. Those are far more important and difficult to change. Your bylaws and state corporate laws likely require at least one annual meeting of the board. If you have not yet had this meeting, schedule it now. Then, ask these questions of each board member and enter 2021 empowered.
There is nothing particularly magical about the end of the year. But, humans are creatures of habit and custom. We tend to see the end of the year as the closing of a chapter. As you prepare to close Chapter 2020, decide to be intentional about it. After you have answered all of these questions for your organization, determine where you may need help. Whether that’s with bookkeeping or government filings like the IRS Form 990 or state charitable solicitation registration, you don’t have to do it all alone. We can take on 2021 together.