ISSUES & COMMON MISTAKES MADE by NON-PROFITS (which includes CHURCHES)

• Non-profits rarely review or update their policies and rarely implement them. Entities need to review their by-laws, employee handbooks, mission statements, internal controls, dues forms, etc. frequently. In some cases, these documents are rarely seen or provided to new employees or board members.  These are only established to meet federal and state requirements.

• Boards not providing proper oversight on the Director or management. This is a major function of the board and requires constant supervision. Board members hardly ever monitor the Director's weekly work hours so make sure they are working the correct hours.

• Boards not monitoring the entity, protecting its assets, providing financial oversite, or helping strengthen programs, events, and services.

• New board members do not experience orientation.  Board members should receive a guided tour of the facilities, introduced to employees, given access to the last year's board minutes to read, bank statements, mission statement, tax returns, news letters, and any other important documents to get member familiarized with the entity's activities. Educate them on your non-profit and how to conform with federal and state requirements!

• Board minutes are written very basic and general with no detail. A new member or a board member who may have missed the past meeting should be able to gather what went on at that specific meeting with little guessing. Details, details, details!  Example: "Board talked about certain event." This doesn't help the reader. What was discussed or concluded? Who discussed it? Minutes should read like a newspaper article, informing its users.

• Entities rarely contact specialist due to costs or they feel they know more than licensed professionals. Have a litigation problem? Maybe you need to consult an attorney. Formalizing budgets? Contact a CPA. Need to invest funds? Contact a broker or investor. Lots of entities use professionals who gladly donate their time to help the organization.

• Directors and boards only worry about the big issues.

• No brainstorming session at the beginning of the fiscal year to help prevent fraud, ways to promote the entity, update policies and documents, etc.

• Entities do not have a yearly checklist for upcoming dates or events nor a documented internal control & accounting system to follow.

• No routine maintenance & repairs on buildings or equipment. Non-profits tend to wait until it is completely broken. Maintenance is a great way to prevent huge costs, including replacements, extending their usage for more years.

• Non-profits tend to leave investments or bank CD's with the same institution. Checking around for a higher CD rate should be a requirement. Moreover, an entity needs to keep track of when the CD matures (include in the checklist).

• Not allowing a board member to have easy access to all the non-profit's documents & employees, including monthly bank and investment statements. Being a board member means full responsibility to the entity. You need all the information necessary to achieve your responsibilities by law. Reviewing the bank's monthly cancelled check images can help give members insight on the monthly expenses of the entity. Employees can also give board members insight on the director's management skills (or lack of), help with certain areas that concern the employee, or help with upcoming events.  

• Entities should have a standard practice to get a second (or more) estimate on professional services that include repairs, accounting, or consulting.

• Non-profits rarely network with similar entities, subscribe to trade magazines, or research new ideas via the internet. Moreover, non-profits don't utilize the community to help with fund-raising or advertising. Some depend on the newspaper to advertise special events or fund-raisers. Most young people don't read the newspaper, watch local TV for commercials, or listen to the local radio. Display a sign in the middle of town or outside your entity that can be reused year-after-year. Contact local businesses to advertise your entity or events on their tables or bulletin boards. Maybe grocery stores can insert a flyer when they bag a customer's groceries. Use brochures that stick to pizza boxes or fast food bags.

• Boards need to thank and appreciate the work of volunteers and major donors. Entities take these individuals for granted. Displaying a plaque on the wall for a volunteer's years of service is a great and inexpensive way of showing appreciation for their service. Moreover, the same can be shown for major donors. Most entities have that one huge donor that gives a substantial amount of money in support. Naming a room (building) after them, with their lettering, can show that donor how much they are appreciated. And, it might increase the odds that their support will continue through the years. Taking them out to dinner is a great way of show appreciation. It also gives the entity time to talk about where their support has been used.

• At the board meetings, it should be common practice at each meeting to discuss the activities of the Director, without them or any employee present.