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intro to nonprofit financial management notes

intro to nonprofit financial management notes - Non-Profit...

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Non-Profit Financial Management – Class Notes January 13, 2010 Mid term exam will be strictly on the text of the book Start collecting material for Term project . What type of information? Organization Mission o What’s its purpose? o Look at the 990 form; it has a brief description of the mission. Way in which donors are recruited. o When it was last updated. If it’s old then you should question if it is still relevance. Check to see if it does match the 990 Board of trustees Who are they? How is the board structured? How does it operate? o Sarbanes-Oxley Act , created after Enron scandal, makes board members more responsible for financial dealing of the non-profit organization. o Do they hold meetings? Do they publish minutes? o Is there a finance committee within the board? o Are board members financially contributing to the organization? Organizational Budget Take a look at when there fiscal year starts. o Is it 0 bases process? What’s their budget process like? o What’s the cost of fundraising? Do they budget for fundraising? o How is the budget prepared? Who prepares it? o Do they have a finance committee? o Are their overall organizational goals and objectives when developing the budget? Or is it annually where not much of attention to goals. o Were the goals achieved? Were they realistic to begin with…. You will decide this on your own; you do not want to ask. o Budget execution and monitoring system? Do they have regular meeting with finance committee? Smaller orgs executive director may report to the board… depends on the organization.
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What are good organization techniques… those that are financial. Good financial reporting system, Good governance… board of directors-ceo has to have clear oversight… greater board oversight. A clear mission. Basic cash flow principles. Financial controls. Good will. Are you achieving your goals? That is what financial management is. History of non-profits Not recognizable in colonial times and first 50 years of us government. It was communities that took control of needs of the public. They were not developed like today; they were volunteer church related organizations. People were giving money to the government not non profits. This goes along with taxes, people were not taxed, money was voluntary collected and given to the government to build roads and other things. This lasted up to the late 19 th century. Citizens had the responsibility to privately support the public good. By the 1870’s government recognized organizations and created the tax exempt system. Harvard president says that they should not be taxed because they are providing a public good. Non-profits start getting recognized in the tax code. Red Cross, United Way gets formed during this time.
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