Our philosophy at Blue Fox is that social impact organizations will thrive if they pay as much attention to financial management as they do fundraising, events, and marketing. There are so many resources (conferences, webinars, ebooks, and consultants) in the “fun areas” of nonprofit management but not as many focused on nonprofit organizational growth through financial stewardship. Insert Blue Fox! We are that resource and are here to support your organization’s back office.

We know nonprofits meet regularly, some even monthly, with boards or finance committees to review the financial state of the organization. We’ve been in those meetings and we understand that financial literacy does not always span the entire boardroom. In fact, many new executive directors struggle to pinpoint exactly what financial information to discuss with board members. Side note: Our team can help with that!

But for now, we want to share a helpful article from our friends at Intuit Quickbooks. Per their advice, here are three financial reporting items your organization should keep a keen eye on.

1. Restricted vs. unrestricted funds. Instead of looking at funds as one big pool of money, there needs to be a designation between restricted (money that comes from designated giving) and unrestricted cash. A simplified way to decipher between the two types of funds is to create a P&L statement and balance sheet in three columns. The first column lists out the net assets without donor restrictions; the second column lists net assets with donor restrictions, and the third column is the total. 

Pro tip: Use the location feature in QuickBooks to set this up and simplify reporting.

2. Revenue model structure. Reviewing your nonprofit’s revenue model monthly allows for adjustments to be made when funding is a little wonky. The next time you review your revenue model structure look for total income earned, total contributed income, then track what percentage of funds are coming from which area. Identify if there is too much funding from one revenue stream and then decide if income should be diversified. 

3. True program cost. Now, this might seem more like an annual process activity but for nonprofit organizations where cash flow is tight and decisions need to be made about cutting programs, a true program cost needs a monthly review. [Learn more about the importance of cash flow for nonprofits.]

If you have any questions about the financial status of your nonprofit or about any of these reporting items before your next board meeting, feel free to give us a call at (321) 233-3311 or email us at hello@yourbluefox.com. We’ll get you sorted! Then you can focus on what really matters: your mission and serving your community.
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The core of Blue Fox’s philosophy is the synergy between technology and humanity – that’s why our tagline is Agile Accounting for Impact. We serve our clients with the best solutions and virtual tools to run their nonprofit organization’s back office with efficiency and excellence.

We listen to the nonprofit buzz every day and understand that tax compliance is a major pain point for many organizations. Queue a new #foxtastic partnership with Avalara. 

The team at Avalara lives and breathes tax compliance so your nonprofit can sit back and relax without having to be a tax expert in every state [especially with donors living all over]. Even better, their platform automates the major steps of tax compliance — all in the cloud. 

There are so many misconceptions about tax compliance in the nonprofit space. Here are three major areas of confusion: 

• Which nonprofit organizations are exempt from paying sales tax?
• How do nonprofits prove they’re tax-exempt?
• Can nonprofits be audited for sales tax compliance?​

Avalara answers all of these questions in their Nonprofits and sales tax questions answered whitepaper. 

So, why did our team at Blue Fox partner with Avalara? That’s simple: their services take care of nonprofits by limiting tax risk and building efficiency through automation and integration with Quickbooks.
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If you’re interested in learning more, let us introduce you to the tax experts at Avalara. Send us an email at hello@yourbluefox.com email. 

Want to learn more about who benefits from sales tax automation and how it can save time and money? Check out the free guide below with answers to your most important sales tax automation questions.

If you’re like us, your daily inbox is jam-packed with newsletters and educational opportunities from like-minded social impact leaders. These spectacular humans work around the clock to foster positive change in their communities. Then, somehow, find time to share their story with fellow nonprofit enthusiasts. We tip our hat to them!
 
Here are just a handful of our favorite nonprofit resources this month:

(Online Class) Be an Effective Board Member (Required to Create Free Account)

(eBook) 10 Ways to Diversify Your Nonprofit’s Fundraising Efforts and Raise More

(Article) Trends in 2021 Corporate Partnerships and CSR

(Webinars) Bloomerang’s Upcoming Webinar Series

(Article) 32 Nonprofit Leaders Who Will Impact the World in 2021

Thanks for stopping by to read our picks for top nonprofit news this month! If you’re interested in hearing more from us, subscribe to our newsletter today!
 
About Blue Fox: Our team provides customized, boutique financial and back office services for social impact organizations. Services range from standard bookkeeping and payroll services, to coaching and consulting, to comprehensive virtual CFO services. Our mission is to disrupt the traditional accounting model through technology, innovation, and a radically client-focused approach that truly empowers nonprofits and social enterprises. For more information call (321) 233-3311, email hello@yourbluefox.com, and visit www.YourBlueFox.com. 

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Here’s a tax legislation win-win!
 
If you have student loans, your employer now has the opportunity to provide repayment assistance through 2025 tax-free. Let’s say that again: tax-free!
 
An article published by SHRM explains: “The Consolidated Appropriations Act, 2021 (CAA), signed into law by President Donald Trump on Dec. 27 extends for five years COVID-19 relief that allows employer-provided student loan repayment as a tax-free benefit to employees under Section 127 of the Internal Revenue Code. Through 2025, employers can continue to make contributions of up to $5,250 per employee annually toward eligible education expenses, like tuition or student loan assistance, without raising the employee's gross taxable income.”
 
SHRM calculates that only 8% of employers provide loan assistance. This legislation aims to improve that number to make a dent in our nation’s student loan debt crisis.
 
Chatrane Birbal, vice president for public policy at SHRM said, "This benefit will provide some relief to employees who are currently repaying student loan debt and also gives employers more flexibility in the design of benefit offerings for recruitment and retention purposes."
 
Let’s spread the word and keep our fingers crossed that more employers recognize the win-win benefits of offering tuition repayment assistance now, through 2025 and beyond.  

Your tax refund may come later this year.
#whatthefox is right!
 
If you frequent the IRS.gov virtual newsroom (like we do), you’ll discover these facts:
 
“The Internal Revenue Service announced that the nation's tax season will start on Friday, February 12, 2021, when the tax agency will begin accepting and processing 2020 tax year returns. The February 12 start date for individual tax return filers allows the IRS time to do additional programming and testing of IRS systems following the December 27 tax law changes that provided a second round of Economic Impact Payments and other benefits.”
 
Although shocking and unprecedented, the IRS has reason (outlined in this full article): to make sure people eligible for stimulus money, receive those funds before filing their taxes. That’s nice - we’ll let them slide this year.
 
We encourage you to read the IRS’s latest news release for simple steps to speed your refund and a full list of key filing season dates.
 
As we’ve said before, our team at Blue Fox is up to speed on the latest tax law changes, and there are a lot. As you can imagine, tax preparation has never been more complex or intricate as it will be in 2021.
 
If you could use tax support, let’s chat! We serve individuals, self-employed folks, nonprofit organizations, and small businesses.