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27 Nov 2019

Finishing the Fiscal Year Right In The US: 3 Steps For Nonprofits

As we wrap up 2019, it’s easy to get swept away in the hustle and bustle of the season. It’s the best time of year to collect donations from your supporters and make a world of difference for your constituents. 

However, organizations generally stop their year-end calendar plans on December 31st. This doesn’t have to be the case! You can overcome this forecasted fundraising deadline. Extending your year-end plans can help you create a smoother transition into 2020.

Specifically, if your nonprofit is one of the many using the calendar fiscal year, you should focus on the transition to your new fiscal year after December ends. 

Transitioning to the new fiscal year requires you to go over the documents from 2019 to create better strategies and more informed decisions. File 990’s list of tax resources provides a good overview of the official documentation to both help you create and analyze data as you enter the new year. 

As you’re strategizing for your nonprofit’s year-end plan, you’ll need to think about each step in the process. These steps include: 

  1. Take advantage of year-end fundraising appeals 

  2. Create your plan for the next steps in the new year 

  3. Consider the opportunities that arise with the new fiscal year 

Ready to get started planning for your nonprofit’s 2020 fiscal year? Let’s dive in!

Take advantage of year-end fundraising appeals 

The end of the year is when the majority of nonprofits raise a large chunk of their annual revenue. There are a number of motivations specific to the season that drive people to contribute at the year’s end.

As a fundraising organization, the best thing your nonprofit can do is to use these motivations to drive your strategy. When you emphasize the things that are already motivating your supporters in your marketing strategy, you can better appeal to donors to contribute to your cause. 

Some of the factors that bring in more donations at the end of the year than at any other time include holidays, tax incentives, and corporate philanthropy contributions. 

Holidays

There are a lot of holidays for you to get excited about at the end of the year! One of the biggest ones for nonprofits is Giving Tuesday. 

Giving Tuesday, the Tuesday after Thanksgiving, is the national day of giving that’s all the rage in the nonprofit world. It’s strategically timed to occur during a time of gratefulness so that people will feel motivated to give to others. 

Later in December, the holiday season also sparks the giving spirit in your supporters. It encourages them to contribute to causes that help other people enjoy the luxuries of life. Therefore, getting them excited about the season and incorporating some top tips to take advantage of it are key to driving seasonal gifts. 

Tax Incentives

There are some incredible tax incentives that supporters can take advantage of if they give to nonprofit organizations before the year ends.

Remind your donors that their contributions don’t only help others, but also help them when it comes to paying 2019’s taxes. 

Make sure you send out the tax receipts in a timely manner so that your supporters feel appreciated and have the information they need to receive tax benefits. 

Corporate Philanthropy Contributions

Many corporate philanthropy programs will match the gifts that their employees make to eligible nonprofit organizations. However, there is a deadline that the employee has to meet in order to request the matched gift. 

For some of these programs, this deadline is the end of the year. Therefore, ensuring your donors are aware of the opportunity to get their gift matched is essential to take full advantage of corporate philanthropy contributions. 

Make sure to amp up your matching gift marketing and install a database on your website where supporters can check to see if their employer offers a matching gift program. 

Create your plan for the next steps in the new year 

Now that you know how to finish up 2019 right, let’s consider what your nonprofit should do to keep the motivation going in 2020. 

The first thing you should do in the new year is to compile the information you need to communicate 2019’s success. You’ll need to communicate this data for both the government and your supporters. This is done with annual reporting. 

One required part of your annual report is filing your Form 990. 

Your Form 990 explains to the government why your organization deserves to remain tax-exempt. There are three different 990s that your nonprofit might file depending on your annual gross revenue:

  • 990-N (or 990 postcard). Nonprofits file this form if they make less than $50,000 in gross annual income. If you think your nonprofit is eligible for this form, check out this comprehensive article about it. 

  • 990EZ. This is a step up from the postcard. Nonprofits file the 990EZ when they make between $50,000 and $200,000 in annual gross revenue.

  • Standard 990. According to File 990’s article, the standard 990 is like the Original Pepsi while the 990EZ is like Pepsi Zero. This form is slightly longer and takes a bit longer to file. It’s required for nonprofits that make over $200,000 is annual gross revenue.

This form is also where organizations like Guidestar pull data to inform donors about your overhead expenses and other financial data. However, these services don’t provide the level of financial detail as your nonprofit can. That’s why, in addition to filing your 990, your nonprofit should send a comprehensive report to supporters with additional financial data. 

Make sure to use this as an opportunity to also highlight key donors or volunteers and explain the impact supporters have had on your mission. This way, the document will act as a source of motivation to continue giving to your nonprofit.

A good annual report will help donors see what their money is going towards (whether indirectly or directly). For instance, you might discuss the new programs your organization initiated or the new communities you’ve reached with your services. This type of information isn’t on your Form 990, but it provides a level of transparency with your organization that helps supporters trust you with their contributions. 

Consider the opportunities that arise with the new fiscal year 

As your nonprofit rummages through important financial data from the last year, you have a unique opportunity to strategize for organizational improvements. 

By analyzing and sorting through all of the documentation your nonprofits needs to file your 990 and create an attractive report, you can also come to important conclusions about your organization’s needs. 

For instance, you may decide: 

  • Your nonprofit needs to focus on donor retention. This may be the case if your nonprofit seems to be stagnating in your fundraising. Generally, nonprofits try to remedy this by acquiring more and more donors. However, the first step to boost donation amounts is to keep the donors you currently have. 

  • Your nonprofit needs to cultivate donors. If your donors don’t seem to be moving up the chain in their donation amounts, you may need to emphasize the cultivation aspect of your donation strategy. This will help you increase your average donation size and develop relationships with supporters. 

  • Your nonprofit is plateauing for unknown reasons. You may identify a trend in your fundraising, but not be able to identify the issues at your organization. In this case, it might be beneficial to hire a fundraising consultant to help you revamp your organization’s fundraising strategy in the coming year. 

The end of the fiscal year is a perfect opportunity to start considering new opportunities to enhance your current nonprofit strategies. By analyzing the data on your 990 and your other budgetary documents, you can identify organizational trends from year-to-year and month-to-month. 

The end of the fiscal year is a fascinating one for nonprofit organizations. You have an incredible opportunity to raise a lot of money, but you also need to transition into a lot of administrative work to file the necessary reports and communicate required information to the government and to your supporters. 

Taking full advantage of this fiscal year-end season will help your nonprofit not only raise more money but also file all of the necessary documents. Plus, you can use this as a valuable opportunity to improve your organization as a whole. All of this starts with your fundraising and your Form 990. re:Charity offers a comprehensive Form 990 guide that can point your nonprofit in the right direction when it comes to filing your tax forms this year. This will help get your organization started. From there, it’s up to you to make 2020 the best it can be!

Guest blog by Ashton Green, File990


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