Innovation: How Nonprofits Expand and Grow

By: Peggy JenningsPeggy Jennings

Nonprofits understand the need for money to fulfill their mission. With traditional donations dropping, nonprofits are forced to develop sustainable revenue generating initiatives. But how is that accomplished? One way is to ensure that you are doing the most you can with what you have. In our experience, there are several ways that nonprofits can be innovative in how they achieve their revenue generation goals:

Expand what you do – take knowledge you already have from your mission-driven operations and create new programs. Examples:

  • A nonprofit whose mission is to support disabled persons with employment opportunities created a new program to receive, repackage and sell local produce in a retail storefront
  • Animal rescue operations were expanded with a retail operation for dog and cat grooming
  • Job placement services for homeless adults were bolstered by initiating a culinary training program also offered to the wider community

Change the way you fundraise – refresh that annual gala or golf tournament with an event that will attract new donors to your cause. Examples:

  • Symphony created a triple-play win by hosting a music / food / wine event
  • Healthcare unit sponsored a series of dance marathons at local high schools
  • Art for students entity raised funds with a “300 plates” event – student artists created small art pieces that were then auctioned off to the public

Use your assets wisely – what do you already have that can be re-purposed? Examples:

  • Junior league chapter remodeled their office space to be more efficient and now rent their excess space to tenants
  • Animal shelter supports local nursing homes and care centers by providing pet companions to residents, generating donations from new donor base
  • Opera recycles stage sets to create new staging for first-run productions

Theses nonprofits along with many others have successfully implemented sustainable initiatives. By using the resources you have available you can achieve sustainability and further pursue your mission.

FASB Issues Long-Awaited Nonprofit Financial Reporting Standard

By: Tim McCutcheonTim McCutcheon

The Financial Accounting Standards Board (FASB) has issued its long-awaited and much debated Accounting Standards Update (ASU) 2016-14, Presentation of Financial Statements for Not-for-Profit Entities. The ASU is the first in a two-phase project, and will change the way all not-for-profits (NFPs) classify net assets, prepare financial statements, and disclose certain liquidity and other information. The ASU is effective for fiscal years beginning after December 15, 2017 (i.e., for years ending December 31, 2018 and beyond). Early application is permitted by FASB. The amendments should be applied on a retrospective basis in the year that the ASU is first applied, with some optional exceptions. Obtain the ASU from FASB by clicking here.

FASB believes the new standard will improve NFP financial reporting by:

  • Reducing the complexity in net asset classification by eliminating the concept of permanently restricted net assets; this better aligns with the provisions of the Uniform Prudent Management of Institutional Funds Act (UPMIFA)
  • Improving the transparency and utility of information regarding liquidity and availability of cash to meet general expenditures
  • Increasing information as to what is and is not included in an entity’s financial performance measure
  • Eliminating inconsistencies in the type of information provided in reporting of expenses by function and nature across NFPs
  • Eliminating the requirement to prepare the indirect method reconciliation if an NFP chooses to use the direct method of presenting operating cash flows

For more information, read the full article here.