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Financial Statement Changes: 5 Steps for Nonprofit Boards

Posted By Delferine Spooner, Friday, January 19, 2018
Updated: Thursday, January 25, 2018

Nonprofit accounting and finance professionals have been talking about the upcoming changes to financial statements for some time, but many others haven’t heard about the changes, including board members. Board members are responsible for oversight of the financial reporting process, and as such, they’ll want to take an active role during implementation of the new guidance This article from AICPA highlights five proactive steps you can take to help make sure your board understands the implications of the new financial reporting standard.

The Financial Accounting Standards Board's (FASB) Accounting Standards Update (ASU) No. 2016-14, Not-for-Profit Entities: Presentation of Financial Statements of Not-for-Profit Entities, was issued in August 2016. The standard applies to all not-for-profits and is effective for years beginning after December 15, 2017. Early adoption is permitted.

Here are five proactive steps to help make sure your board understands the implications of the new financial reporting standard:

1. Identify areas that will be affected: The key financial statement areas that will be impacted by the new standard are:

  • net asset classifications
  • required liquidity disclosures
  • investment return reporting
  • statement of cash flows presentation
  • functional expense reporting

It’s important for the board to understand how the changes will affect the financial statements prior to seeing the audited version. Consider having the organization’s finance staff, independent auditor or financial consultant provide the board with a high-level overview of the changes and discuss the specific impacts.

2Discuss the implementation plan: Board members are ultimately responsible for fiduciary stewardship of the organization. However, the board will often delegate certain duties, such as oversight of financial reporting, to the audit and/or finance committee. Management will want to ensure that the board or responsible committee understands the plan to implement the new not-for-profit financial reporting standard, including the timeline and resources needed.

3. Consider the cost: There could be cost implications of implementing the new standard, including additional staff time, accounting system needs and increased audit costs. The not-for-profit’s finance staff and independent auditors can provide input on the budget implications in the first year of adoption, allowing management and the board to plan accordingly.

4. Update and approve policies: Understand that organizational policies might change because of the standard. A good practice is to have at least one board meeting annually to review, discuss and approve policies. Take this time to consider adding “Policy Review and Discussion” to the agenda of one of the established board meetings for the coming year.

5. Review board designations: The financial statements will require disclosure of all board designations and similar self-imposed limits on net assets without donor restrictions. As such, this is a good time for the board to review any existing board-designated net assets. Many organizations have not reviewed or discussed these in years. New board members may not even know they exist. When reviewing interim financial statements at an upcoming board meeting, consider discussing whether the designations are still relevant. The organization may also wantto have the board reaffirm the designations at the meeting. While there is no requirement to have board-designations on net assets, if there are none, be sure to document that fact in the board minutes.

The current not-for-profit financial statement format and terminology are more than 20 years old. The new standard aims to improve financial reporting by providing more useful information to stakeholders and addressing inconsistencies in the areas of expenses and liquidity. While the changes may initially feel overwhelming, they give organizations a great opportunity to better understand their own financial health, tell their stories externally and compare themselves to other organizations.

Original post can be found here.

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Daszkal Bolton Promotes Henry Martin to Director and Announces Additional Promotions

Posted By Jessica Cecere, Tuesday, January 16, 2018
Updated: Thursday, January 25, 2018

Congratulations to Henry Martin for being promoted to Director of the Audit and Assurance Practice at Daszkal Bolton. Henry has been with Daszkal Bolton for more than twelve years and provides assurance services to privately owned businesses and nonprofit organizations including Government Auditing Standards, Uniform Guidance (formerly OMB Circular A-133) and the Florida Single Audit Act.

Henry proudly serves as a member of the Board of Directors for Nonprofits First. 

About Daszkal Bolton LLP

Daszkal Bolton LLP provides accounting, tax and business finance advisory services to small and middle market companies ranging in revenue from $10M to $300M. The firm provides financial statement assurance, tax advisory and compliance, M&A and transaction advisory, private client services for high net worth individuals, state and local tax, International tax, forensic accounting, business valuation, estate planning and asset protection services. The firm also advises on wealth management, life and disability insurance and fee based financial planning through affiliate Benchmark Financial Group. With over 140 professionals Daszkal Bolton covers the South Florida markets, with offices in Fort Lauderdale, Boca Raton and Jupiter.

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Healthy Mothers, Healthy Babies of Palm Beach County Earns Accreditation for Mentoring Program

Posted By Josh Hirsch, Thursday, January 11, 2018
Updated: Thursday, January 25, 2018
Michelle Gonzalez, chief executive officer of Healthy Mothers, Health Babies Coalition of Palm Beach County, recently announced that the organization’s Caps and Cribs Teen Mom Mentor program has been awarded the National Quality Mentoring System (NQMS) badge by MENTOR, the national mentoring partnership. The badge is an evidence-based acknowledgment of the safety and efficacy of the Caps and Cribs program and assures mentees, funders, and policymakers that the program meets national quality standards and procedures for the operation of a mentoring program. Caps and Cribs is one of only six nonprofit programs in Florida to earn the accreditation.

Parenting Affects Graduation Rates

Reflecting on the award, Gonzalez observed, “Because we know that being a parent is one of the leading causes of school dropout for teen girls, Caps and Cribs helps pregnant or parenting young women graduate. In an effort to support local teen mothers, our mentors work one-on-one with young women at their high school; they offer advice, share their life experiences, and help teens navigate the challenges of school and parenting. We are extremely grateful to MENTOR for acknowledging the program’s professionalism and success.”

Mentors and Mentees Achieve Success

When asked about the success of the program, Program Coordinator Jennifer Silliman replied, “During the 2016-17 academic year, nine seniors graduated from the program. The accomplishments of these amazing women—mentors as well as mentees—are a direct result of the hard work and dedication that is so evident among our clients and volunteers.”

Caps and Cribs is funded by the Town of Palm Beach United Way, United Way of Palm Beach County, and Children’s Services Council of Palm Beach County. It is just one of several programs offered by Healthy Mothers, Healthy Babies.

About Healthy Mothers, Healthy Babies Coalition of Palm Beach County

Healthy Mothers, Healthy Babies is committed to improving birth outcomes and promoting healthy families by providing access to care, education, and support to those facing the physical, emotional, economic, and social challenges of pregnancy and infant care. The group supports nearly 67 percent of women delivering babies in Palm Beach County. In addition to Caps and Cribs, HMHB services include: prenatal care coordination; prenatal screening; CenteringPregnancy®; maternal wellness programs for pregnant and new parents; Basics4Babies Emergency Pantry for Infants; educational workshops and childbirth classes; as well as community outreach events.

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Palm Beach Philanthropy Tank Community Voting Closes Today

Posted By Josh Hirsch, Monday, January 8, 2018

Voting closes today for 
Palm Beach Philanthropy Tank finals. One finalist student or team will be selected to pitch at the Philanthropy Tank Finals on March 11, 2018 at the Dreyfoos School of the arts. Finalists compete for the chance to win up to $15,000 in funding and mentoring from top philanthropists for a year. 

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Big Changes for Google’s Ad Grants Program in 2018: What This Means for Your Nonprofit

Posted By Josh Hirsch, Thursday, January 4, 2018
Updated: Monday, January 8, 2018

As we welcome the new year, 2018 also will mark some big changes in Google’s AdWords program for nonprofits. Starting January 1st, Google is making significant adjustments to their policies around ad grants. Although some of these changes may appear daunting to organizations that have taken their $10,000, no-strings-attached monthly budget for granted, they should actually encourage organizations to do the extra work to discover quality keywords that in return bring higher quality users to your website and online resources.

The greatest news coming from these changes is that the $2.00 cap on costs-per-click (CPCs) in AdWords will be eliminated for organizations that build their campaigns using an automated bidding strategy called “Maximize Conversions.” Maximize conversions bidding is an AdWords smart bidding strategy that automatically determines the optimal CPC bid to help get the most conversions for AdWords campaigns while also ensuring your organization adequately spends its budget. The $2.00 CPC cap has been a hindrance to nonprofits in the Google AdWords Grant program for years, as prices for keywords have skyrocketed given the need for companies to focus on improving paid search traffic and SEO.

Another big change that could alarm some nonprofits is that Google will now require click-through rates (CTR) to stay above 5 percent in order to keep AdWords grants. If an organization falls below an average CTR of 5 percent for two consecutive months, their account will be cancelled. This modification will likely cause many AdWords accounts to be cancelled in the coming months.

Here are three ways to increase your campaign click-through rates in AdWords:

The Google Ad Grants team is heavily pushing quality with a majority of these adjustments. Here are some other significant policy changes to AdWords of which nonprofits should be aware:

  • Keywords must have quality scores of 3 or higher. This change will eliminate generic terms like “free books” or single keyword terms like “foundations.”
  • Each AdWords campaign must include at least two ad groups with at least two ads running.
  • AdWords accounts also must have at least two sitelink extensions
  • You must have geotargeting active within your account.
  • Nonprofits cannot buy branded keywords they do not own. For example, your organization cannot bid for terms like “Google” or “Facebook” or variations such as “Macys” anymore.

More than 35,000 nonprofits participate in the Google Grants program, and many of these organizations could be in danger of losing their grant all together if they are not responsibly managing their AdWords grant campaign and adhering to these stricter guidelines.

If your organization does not have the capacity to spend time strategizing higher quality AdWords campaigns, you could use AdWords Express. However, doing so will completely automate the process, leaving Google with a lesser or incomplete understanding of your organization’s mission or goals. As such, we generally advise against it.

These changes should mostly be good news for nonprofits and inspire you to ensure your AdWords campaign budget is effectively spent.

Original post can be found here.

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