Finance & Strategy

Combined Federal Campaign (CFC) guru Bill Huddleston tells how nonprofits can raise money from federal employees in just eight great points:

1. Why should I bother to read this article about the Combined Federal Campaign?

• Because it's easy to register the first time, and after that it's really easy to renew your registration
• Because if it were a foundation it would be the 10th largest foundation in the United States
• Because your small local nonprofit can raise reliable unrestricted money . . . CFC doesn't work only for large or well-known organizations
• Because in terms of time to dollars it's one of the most leveraged fundraising vehicles.

2. Okay, you've got my attention. What is the Combined Federal Campaign?

CFC is the workplace giving (payroll deduction) program for employees of the U.S. federal government. If you are enrolled with CFC, any of the four million federal employees and military personnel can easily pledge to your organization. CFC is the only vehicle open to these employees.

3. How much can our nonprofit expect to generate from federal employees?

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Not all board members need to be familiar with financial terms and concepts, but each organization needs to develop a clear and explicit agreement for how financial accountability will be ensured. The following is a starting point for an agreement that the board and staff can make to ensure a partnership for accountability.

Starting with this template, a discussion on the finance committee with the executive director and the finance staff will go a long way towards clarifying roles.

Sample Board-Staff Agreement for Financial Accountability

Read more for sections on accounting, budget, personnel, more . . .

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For many executive directors, hiring an accountant is fraught with anxiety. How will we find the right person? How can I tell if someone really knows accounting? Will an accountant fit in with the rest of us? As difficult as it is to hire a good accountant, hiring an incompetent or incompatible person is even worse. Here are some FAQs on hiring accountants for nonprofits, and what to do if you're having an impossible time of it:

Where do we recruit applicants?

You may spend more time recruiting good applicants for your finance team than you may spend for program staff; after all, accounting skills are often more marketable across sectors than program skills. Competition for strong candidates can be challenging.

• Ask your auditor: Your auditor not only is connected with the accounting world but also understands your needs. Auditors may know of good candidates who may be looking for work; for instance one of their other nonprofit clients may have just downsized. Be sure to ask where else to recruit in your community.
• Advertise differently: For the accountant position, look beyond . . .

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Sometimes you need to raise funds in a hurry. It's easy to think, "We should have established a fundraising plan earlier!" That may be true, but it doesn't help now. Here are some ways to raise modest funds in a pinch. Because institutions like foundations, government, and service clubs typically take more than a month to make funding decisions, your best bet to raise money in 30 days usually involves asking individuals for donations.

Each of these techniques can raise a lot or a little depending on who is doing the organizing. For example, a house party in one organization can raise $500 in one evening, while in another it can raise $100,000. In either case, the amount raised is . . . Read more

Although every nonprofit has a mission statement that defines the organization's core purpose and work, many are unaware of its useful companion, the business model statement: a brief summary that spells out the organization's economic drivers. Like a mission statement, a business model statement acts as a touchstone: a reminder and a guide for the organization's focus and strategies.

Nonprofit executives and board members usually have a good sense of the various types of funding that support the organization, but they may have a harder time explaining the organization's business model. Let's imagine a childcare center with the following mission statement: "We provide high quality child care in a cross-cultural setting." A first draft of their business model statement . . . Read more

More than half of the nonprofits in the United States are estimated to be all-volunteer organizations. Here is a wonderful, succinct guide for the 600,000 + treasurers of such organizations:

My time as treasurer of a faith-based nonprofit was a labor of love. Starting out as an all-volunteer organization with a $20,000 budget, we developed financial systems, workable budgets, and demonstrated accountability. We served families affected by incarceration and there's no greater personal reward than seeing people realize they have real hope for a better life. In just three years the budget grew to over $330,000.

However, there was stress as well. As a CPA I found myself the recipient of unnerving deference at times. I frequently fell short in communicating financial information to board and staff. But the outcomes made it all worthwhile.

This experience helps me appreciate one of the many unsung heroes of our time: the treasurer of the all-volunteer organization (AVO). AVOs are among the most important and most invisible building blocks of our communities. Members of all-volunteer organizations read to children, care for the dying, get clean water legislation passed, serve as . . .

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There are two things to worry about with copyrights: protecting original material that your organization has created, and making sure that your organization isn't improperly using material that someone else owns. Blue Avocado asked copyright attorney Kate Spelman to help us with these issues, and she generously gave all of us her expertise and time.

Q: Should we be copyrighting things we publish in print, on our web site, in our music CD, and elsewhere? Is it enough to put a (c) (copyright symbol) on things?

Kate: It's a good idea to put the (c) symbol (a 'c' in a circle) on original materials, along with the year and the copyright owner. But a copyright can't be enforced unless the work has been registered. See the U.S. Copyright Office at www.copyright.gov for the official site.

Is it hard to register a work?

Not really. Works can be registered at the United States Copyright Office for $45 each, and the benefits include . . . Read more

Segregation of duties, checks & balances . . . difficult to implement in the organization that has perhaps three or fewer staff, or only a few active board members in an all-volunteer organization. We asked CPA Carl Ho, who works with dozens of small nonprofits, what would be the five most important, most do-able controls for small groups:

1. The first and most important consideration is to set the control environment, that is, to let everyone know, from the top down, that there are policies in place and everyone has to follow the policies. In so many organizations the top person makes exceptions for himself or herself about policies, which sets a sloppy or even unethical tone. Then other people don't think they have to follow procedures, either, and they start cutting corners. The top person can't ask for reimbursement for anything for . . . Read more

When one nonprofit considered moving away from having an annual audit to having a review, the board wanted a legal opinion before making a decision. They sought out nationally-recognized nonprofit attorney Tom Silk, who has generously shared his letter with

Blue Avocado readers:

Dear _____ [CEO]:

You have asked me to advise you and the board of _______ whether it should obtain an audit or review of its financial records for FYE June 30, 2009.

Background

There is currently no federal requirement mandating financial audits of charitable organizations, with one exception: OMB Circular A-133 requires . . . Read more

An Agreed-Upon-Procedures Engagement is one where an auditor performs tests on only a portion of the organization's finances, and can therefore be done at much lower cost. CPA Dennis Walsh discusses how this little-used process could be utilized more for nonprofit benefit:

In Southeast Alaska, the United Way coordinates the federal government's Combined Federal Campaign (CFC). In 1998, the CFC required an audit when program revenues exceeded $100,000. Southeast Alaska had many nonprofits with revenues over $100,000 but less than the federal single audit theshold (currently $500,000), above which a financial statement audit is mandatory for entities receiving federal funds.

"Given that many of these organizations were only receiving a few thousand dollars or so from the United Way/CFC, it hardly made sense for them to . . . Read more