Despite how wonderful your organization is, many funders expect you to prove that your programs work. So, this begs the question of how to measure success, a challenge with people knowing that they made a difference, but not being able to show it with factual data. As a CPA, my take on this is for people to quantify with numbers the ‘before” and “after” scenario as much as possible. 

Before and After

The key here is to quantify the “before” as much as possible and make it a baseline.  For example, how many people attended an event before or now? How many calls were made to a center before or now? Set a baseline so that it can be compared and analyzed later on.

The other side is to show results over time and how the program still important, "the after." For example, you could show that a certain drug rehab program started with 15 people and has grown over time with 25 people the following year and today has 100 clients.  However, be sure that you're measuring significant items.  For example, maybe a better way to measure success in rehab would be how many people finish the program, not just number of clients at a certain point in time.  A nonprofit may have more clients, but if fewer are finishing the program, this may indicate a problem.

Objectives

To determine proper measurements, start with your program objectives. If your objective is to provide literacy services to adults, the number of students may provide a good measure. Or, maybe the number of students that pass a literary test could make more sense.

A nonprofit that provides temporary housing for the homeless could consider success when the person moves on to permanent housing or when he/she gets treatment for addiction and gets a job.  It all depends on the program final objective. The yardstick to gauge impact could be number of people in the temporary housing, or number of people leaving such housing for something more permanent, or maybe how many new rooms have been added to accommodate this population. It all depends on the nature of the program.

Education and awareness

To implement a measurement system, staff and managers must be aware of the situation, so that proper data can be identified and tabulated. Since this may be new to many, be sure to explain the reasons for this “extra work “so that the staff not only understands its purpose, but also can give good ideas about how to measure impact meaningfully. 

Set up a structure for people to work within so that information is not forgotten or lost. Nonprofits could use checklists, specify questions to ask, evaluation processes – all to document “before and after” on a systematic basis, not just at random. The idea is to institutionalize ways to evaluate programs. Knowing that there is a system in place is sure to please any new donor.

Keep it in writing

Keep all docs in writing with logs, notes, pictures and any pertinent information handy  to show funders that your organization is indeed making a difference. Document major processes. For instance, if you provide a child care hotline, every call should be written up in a log with information about who took the call, time, etc. Keep close contact with providers that can give you backup and numbers about how many placements were made because of the hotline, for instance. 

Keep the documentation in paper or digital format. Keep it safe and organized, so that it can be found and compiled quickly. It should be available to both program and fundraising-development departments.  You don't want people looking around for hours or days, trying to find a specific data that can help the organization increase or keep its funding.

Measuring program success can be a daunting task, but it’s usually doable, once the nonprofit defines what needs to be evaluated. Besides numbers, you can also use pictures to document baseline - "before and after". This can be very effective when dealing with construction projects, for instance. Make sure to double check on the ways your programs are being evaluated.  Sometimes, a program or focus changes, but the evaluation methods stay the same. Be nimble here.

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I don’t know about you, but I’m sick and tired of hearing about nonprofit fraud, especially when done by a high-level management person such as CFO or CEO. It’s heart breaking to see people in positions of trust and power stealing from organizations. In many cases, the theft lasts for a while, until someone stumbles upon it by chance to the shock and dismay of many people. Unfortunately, this is not that rare. So, how can a nonprofit stop such unpleasant incidents and at the same not be overtly suspicious of people who are, in most cases, innocent?

Below are a couple of activities that can be used to find errors that may be very innocent, while at the same time identify signs of fraud. These tasks, known as controls within financial circles, can do double-duty in keeping an organization safe and error-free. They are by no means the only controls to prevent or identify fraud, but they are fairly easy to perform and worth a close look.

1- Look at bank accounts online ---Someone from the board could review bank activities online, looking for unusual vendors or checks. This task should be specified in the organization’s policies and procedures, and should be known by everyone. The idea here is to let people know that there’s a process established that is part of day-to-day business of the organization and not a big deal. Having a board member ask questions about checks and deposits should be expected. This is not micro-management, but a way to double check on bank transactions, like unusual vendors or amounts paid out or deposited.

A second pair of eyes looking at online bank data at least once a week can also help to find errors. For example, if the board member knows that someone donated $20,000 recently, but only sees $2,000 in the bank, then this person could contact the bank and inquire if this was an error from the part of the bank, which can happen. This discrepancy could also be an error from accounting that can be fixed right away. However, if errors don’t explain the discrepancies, then the situation needs to be further investigated. There’s a chance that someone misappropriated the funds, even if you don’t want to think about it.

2- Contact donors often --- Someone outside development dept. or the CEO’s office could contact donors, especially if they haven’t donated as before or as expected. The point is to have someone who usually doesn’t talk to donors to follow up on an informal basis, verifying if any donation or payment was made. Why is this important?

Many fraudsters call donors and instead of depositing the money in the organization’s bank account, they deposit it elsewhere. Sometimes the payment goes to a bank account with similar name or initials, while other times the check is endorsed and deposited elsewhere. Accounting doesn’t know about the donation, and nobody, except for the thief, knows about the payment. This issue may be found when someone different talks to the donors.

Note that issues found are likely to be very innocent as well. Maybe the donor forgot about making the donation. However, if the donor made a payment, but it didn’t make it to the organization’s bank account, it could be because it was lost or the bank deposited it in the wrong account by mistake. These situations usually don’t point to internal fraud, just errors that can be corrected.

These are only a few activities a nonprofit can do to protect itself against theft by high-level employees.   It’s sad that we have to be a bit paranoid running a nonprofit, but it’s a must in today’s environment. Auditors may come in once a year to double check on financial issues, but they usually don’t find fraud committed by high-level swindlers, who can clean up their tracks well. By following just these two processes, nonprofits can make fraud harder to happen and that’s always a good thing.

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Scams are everywhere these days, including those targeting smaller nonprofits. Why? Maybe the criminals assume organizations are staffed by volunteers or employees who are naïve and good-hearted, and will do anything if pressed enough. Don’t become a victim of these scams!  ***Don’t be in a hurry to pay any bill, especially if there is an odd urgency to it. Get an approval first – ALWAYS. 

Below are a few of scams to be aware of:

1- Computer cartridges and supplies – I actually witnessed this one personally and told the swindler to take a hike. The scam works by first the scammer sending in boxes of cartridges or supplies, usually old and defective. Then the organization receives a bill from a business requiring payment for the items. If you don’t pay, the person calls you pressuring you into paying, “or else.” 

In reality, nobody asked for the items and the scammer uses a name of someone he knows works there.  In my case, the ruse was obvious because the guy used a name of a person who was no longer with the organization. He tried another name, and I immediately called that person up and she confirmed never to have requested anything. The best thing to do in this case is to tell the scammer to come and get his stuff, and simply ignore the frantic efforts to collect.

2- Credit card refund – Someone makes a payment or a large donation using a stolen card.  Then he or she calls saying that the amount was wrong and the organization needs to give the scammer an urgent refund check. If the nonprofit falls for this, it is out not only of the first “payment,” but also of the refund. 

A variation of this scam, the “check writing scam,” involves a foreign check for a large amount. The same urgent request for a refund is made. The idea is that the foreign check will take longer to process through the bank, and by the time the nonprofit is advised that the check is fraudulent, it’s too late. In this case, the organization may be on the hook for bank fees for depositing a bad check besides losing the “refund” money. This is what happened to 18 organizations in the Richmond, Va area, as reported by The Nonprofit Times online in February 2016.

3- Web address about to expire – The organization receives a letter saying that the domain and the address are about to expire and that renewal fees are required right away. The problem is that the domain and web address are not about to expire, and the company sending the letter is not the one the nonprofit deals with  The dead giveaway is the price to renew this domain and address is too high, but many will pay now and ask questions to the IT person later. Bad idea.

This scam also has a variation related to registrations or trademarks expiring. The fraudsters keep sending in the letters marked urgent or some other ominous sign. Oftentimes the letterhead and other details seem to be authentic, implying that the scammer is somehow related to the government. Don’t fall for it. Talk to the person in charge of the website or trademarks before paying up.

4-Directory listing scam – This fraud is the first one listed on the Federal Trade Commission website, underscoring how “popular” this scam is. The game starts with a phone call to verify details of the business. Since this is only a verification call, often the person answers the questions without much concern. The call is often taped, which is the first sign that something is wrong. (Why does one need to tape a call that is only for verification purposes?) Next, the nonprofit receives an urgent bill for directory listing. If you balk, the fraudsters threaten legal action and say they have proof of the listing and the name of the employee who authorized it.

The person’s name came from the first call, of course. If the organization still doesn’t pay up, then they give you phony discounts to smooth things out. These scammers are very persistent and some people may pay up just to stop the calls, which is not a good strategy.

In the event that your organization is victim of fraud or someone is trying to scam you, report it to the Better Business Bureau and Federal Trade Commission. If people are threatening you or if you paid someone because of a scam, contact also your police department. When unsure about a company, check it out online, specifically on the Better Business Bureau website (www.bbb.org) and again, NEVER pay a bill just because you received it and it may be late --- train your staff to be vigilant and skeptical on the phone and on sending out “urgent” payments.

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