Ending the Year Strong: In the Weeds with You on End-of-Year Finances for Nonprofits
As a nonprofit organization, you have a lot on your plate. But one thing that's important to remember is that your finances are essential to your mission. By taking the time to get your finances in order at the end of the year, you can set yourself up for success in the new year.
In this article, you will find a detailed checklist for key end-of-year mailings, government filings, and other financial tasks for nonprofits.
End-of-Year Mailings
Donor thank-you letters: Your donors are the lifeblood of your organization, so it's important to send them a personalized thank-you letter at the end of the year. This is a great way to show your appreciation for their support and to keep them engaged with your mission.
Appeals for end-of-year donations: The end of the year is a popular time for people to donate to charity, so take advantage of this opportunity by sending out an appeal for end-of-year donations. Be sure to highlight the impact that your donors' contributions make and to make it easy for them to donate.
Year-end impact report: Share a year-end impact report with your donors and supporters. This is a great way to show them how their donations have made a difference and to inspire them to continue supporting your organization in the new year.
Government Filings
Form 990: Most nonprofits are required to file Form 990 with the IRS each year. This form provides information about your organization's finances and activities. The deadline for filing Form 990 is typically May 15th of the following year, but there are some exceptions.
State and local filings: In addition to Form 990, you may also be required to file additional reports with your state and local government agencies. In California, review when your next filing is due for your Statement of Information (SOI). Be sure to check with your state's attorney general's office or charity regulator to learn about the specific requirements in your state.
Employee/contractor filings: Most payroll companies will handle filing Forms W-2 and W-3 for you and your employees. Review payments to contractors in the year and prepare Form 1099. Be sure to collect Form W-9 from your contractors to make this process easier!
Other Financial Tasks
Review your budget: Take some time to review your budget and make any necessary adjustments for the new year. Consider your organization's goals for the new year and how much money you'll need to achieve them.
Update your financial statements: Make sure your financial statements are up-to-date and accurate. This will help you to track your progress and make informed financial decisions.
Reconcile your accounts: Reconcile your bank accounts and credit card accounts to make sure that your records match the bank's and credit card company's records. This will help you to identify and correct any errors.
Back up your financial data: Back up your financial data regularly to protect it from loss or damage.
Secure your financial data: Take steps to secure your financial data from unauthorized access. This includes using strong passwords, encrypting your data, and keeping your software up to date.
Additional Tips for Nonprofits
Involve your board: Keep your board of directors informed of your financial situation and involve them in your financial planning process.
Get professional help: If you need help with your end-of-year finances, consider hiring a financial advisor or accountant. They can help you to make sure that everything is done correctly and that you're taking advantage of all of the available tax breaks and deductions.
By following this checklist, you can make sure that your end-of-year finances are in order and that you're on track for a successful new year.
Your finances are essential to your mission as a nonprofit organization. By taking the time to get your finances in order at the end of the year, you can set yourself up for success in the new year.
Missionwell’s team of nonprofit experts can help guide you through a successful end-of-year and get you started on the right foot in the coming year. Schedule a time to talk to our team today!