07/07/2021 | by Karis Call
Audit support, tax and compliance, and accounting are all critical for not-for-profit organizations (NFP) to operate. However, before any financial management or maneuvering can take place, NFPs need funding. Over the course of the last year, fundraising efforts by many NFPs have failed to meet necessary targets.
In fact, The Charities Aid Foundation of America has found that 67.93% of NFPs have experienced a decrease in their funding, while 33.97% are experiencing greater costs. In addition, majorities around the world have had to contend with travel restrictions and damage to their client relationships and nearly half face staffing disruptions.
The bottom line is that NFPs must rethink how to approach fundraising in a dramatically changing environment. It’s unlikely that the world will go right back to normal after the pandemic has ended.
Sure, it’d be wonderful if giving funds were full and money was flowing to effective NFPs like never before. Unfortunately, that isn’t the situation we are all in, and it’s time to realize that organizations have a choice: cease operations or gear them toward efficiency and stay afloat while providing as many critical services as possible.
Let’s foster the right mindset. No NFP is alone in this situation, and those that make it through a fundraising drought will be the ones that take this opportunity to rethink how they are using their resources.
Staying afloat means devoting serious time and effort to securing any and all possible government incentives. There are grants available from local governments and large programs, like the Paycheck Protection Program (PPP) that was initiated by the federal government in the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
The PPP was designed to help employers keep their staff on payroll and alleviate expenses, such as rent and utilities. The program allowed for the first draw of funds before August 8, 2020, but a second draw was approved by Congress in December. The best part of the program is that loans can qualify for 100% forgiveness, effectively turning them into grants.
Beyond direct assistance, the CARES act also allowed for individuals to deduct up to $300 in charitable giving when they file their 2020 taxes, even if they’re not itemizing and even if they are taking the standard deduction. In other words, NFPs have a wider pool of people to encourage to give than they did previously.
Other programs also exist, like Economic Injury Disaster Loans (EIDL), that provide long-term loans with low interest rates designed to help organizations pull through the crisis. Whichever programs you decide to utilize to make it through these troubled times, it is critical not to abandon compliance and good organizational governance.
NFPs are still subject to strict rules and possible audits, but the experts at Rubino are here to help you navigate it all.