As the year draws to a close, holiday parties and celebrations mark the end of another year. While it’s important to take time to recognize those milestones, preparing your nonprofit from a legal standpoint can help position your organization for a great start in the new year.

Verify Corporate Compliance

A quick review of your organization’s bylaws to make sure they reflect the current state of your nonprofit can be a good way to get started.  Think about whether new initiatives may be stretching your bylaws in unintended ways.  If so, consider working with your board of directors to adjust the bylaws to better address your nonprofit’s evolving mission.

Prepare For Tax Reporting

The IRS has stepped up audits with the incorporation of new rules surrounding full-time, part-time and overtime employees.  Recent changes have adjusted the salary threshold for employees who are eligible for overtime payments.

Starting on January 1, 2025, the threshold salary for exempt employees to avoid overtime requirements will be $58,656.  This increase in the salary threshold may mean more of your organization’s employees qualify for overtime – which can significantly impact your nonprofit’s budget.

It’s important to take note of employees who may be reaching this salary limit and to think creatively about how to manage their compensation in a way that values their contributions to your organization but still helps your nonprofit avoid overtime costs.

Another way to avoid running afoul of these changing regulations is to consider revising employee contracts to specifically state that overtime hours must be approved in advance.  This can help your organization proactively manage overtime situations and encourage managers to be more mindful of circumstances that may lead to excessive overtime for key workers.

In addition, programs like UST Trust allow you to opt out of the state unemployment tax system and instead reimburse the state for your actual unemployment claims, dollar-for-dollar. UST assists you through the enrollment process, provides expert claims management, and helps you save money for anticipated unemployment costs in a reserve account owned by your organization as a financial asset.

UST can evaluate your unemployment claims history, number of employees, and tax rate information (if not yet reimbursing). Simply complete UST’s Free, no-obligation Savings Evaluation Form.

Contract Reviews and Renewals

One of the most common situations faced by nonprofit organizations is misclassifying a person as a contract worker rather than an employee. This can be especially fluid as you work with someone over multiple years on long-term projects.  A person’s status as a contract worker could morph over to that of an employee without your organization necessarily noticing the change.

As a result, it would make sense to take a second look at the people your nonprofit categorizes as contract workers to ensure they still fit that definition according to the IRS.  The six areas to consider are:

• Opportunity for profit or loss depending on managerial skill – Think of this as an evaluation of whether the worker has the ability to determine their hours, to hire others to assist in the project, whether they can accept or decline jobs or determine the priority of projects.  If the answer to these situations is “no”, they’re most likely classified as an employee.

•  Investments by the worker and the potential employer – Is the person making investments in their business that solely benefit your nonprofit?  Or are they acting as an independent business where their investments in items such as computers and education benefit multiple clients?

• Degree of permanence of the work relationship – If a person works for your organization on an ongoing basis and to the exclusivity of other employers, they may very well fit the definition of an employee.  Defining the work relationship on a periodic basis that’s centered on a certain project can help confirm an independent contractor arrangement.

• Nature and degree of control – This consideration covers whether your nonprofit sets an employee’s hours, supervises the person’s performance or limits their ability to work for others.  If your organization’s answer to these situations is “yes”, then it’s likely that they would be considered an employee.

• Extent to which the work performed is an integral part of the potential employer’s business – This factor highlights whether the work a person does is an integral part of your nonprofit.  If it is, this consideration would weigh in favor of them being an employee.  If it isn’t, then it would weigh more in favor of the person being a contractor.

• Skill and initiative – Is the individual utilizing the skills you’ve trained them to perform, or are they contributing skills that are outside the current capabilities of your nonprofit?  Individuals utilizing skills you’ve trained them to perform are typically considered employees. Those contributing skills that are outside the current capabilities of your nonprofit may be considered contractors.

Performance Evaluations

The end of the year is an opportune time to conduct employee performance evaluations. Even if your organization’s fiscal year concludes mid-year, December offers a valuable chance to check in with employees, provide feedback on their performance, and address any challenges proactively.

SHRM (Society for Human Resource Management) recommends doing mid-year reviews to help build employee engagement and to also help avoid end-of-year “surprises.”

Bringing it all Together

Positioning your nonprofit for success in the new year can be easy when you take a few extra steps in Q4.  Whether it’s thinking about corporate compliance or reviewing your employee tax issues, time spent now can pay big dividends when it comes to getting ready for 2025.

If you’re looking for specific tax guidance when it comes to employee classifications or want more details on how taxes apply in your state, sign up for a free 60-day trial of UST HR Workplace!

SOURCES:

https://independentsector.org/blog/what-does-the-new-dol-overtime-eligibility-rule-mean-for-nonprofits/#:~:text=Nonprofit%20employers%20already%20face%20the,the%20new%20overtime%20eligibility%20rule.

https://nonprofitresources.us/2023/12/07/navigating-year-end-checklist

www.shrm.org

The end of the year often brings a whirlwind of professional and family obligations – especially for nonprofit leaders.  You may find yourself juggling end-of-year fundraising drives, community events and treasured family holiday traditions.

But there’s also a key step you should take during November and December to set up your nonprofit for success in 2025—spend dedicated time reviewing your strategic plan.  In fact, this may be one of the most valuable gifts you can give your organization during these busy months.  The following questions can be a smart way to get started:

• Where does your nonprofit stand in terms of meeting its goals for 2024?

• Where did your group successfully meet its mission?  Were there areas where your organization missed the mark?

• Do certain goals need to be broken into smaller parts in 2025 to bring a better chance of long-term success?

• Do you see new opportunities or challenges in the coming year that might impact your organization’s long-term strategic plan?

Ways To “Crowdsource” Your Year-End Review

Of course, revisiting your 2024 strategic plan doesn’t need to be a solo exercise.  In fact, tackling this important review on your own can easily result in tunnel vision and missed opportunities for the coming year.

• Consider having various members of your leadership team conduct a review of segments of your nonprofit’s strategic plan.  Getting year-end feedback from different organization leaders can help generate new solutions which might not have been apparent during earlier planning sessions.

• Ask for input from team members who worked directly on certain programs.  People working on the front lines of your organization may have practical insights which could help refine your approach to challenges in the coming year. 

• Reach out to stakeholders within your community to see how local conditions may be impacting allied nonprofit organizations.  Is there a change in the community which they’ve successfully addressed?  Are they choosing to focus on a new challenge which emerged within the past year?

Working with your nonprofit’s leadership team, frontline employees, and community stakeholders can give you a more robust, 360-degree picture of how successfully your organization performed in 2024.  In turn, that can give you a clearer vision of your priorities in 2025.

SMART Strategy Adjustments Can Help Kickstart 2025

After a solid review of the current year’s strategic plan and the results your nonprofit achieved, the next step is using the SMART strategy to fine-tune your organization’s priorities for the new year.  This includes setting up goals that are:

SPECIFIC:  If you currently serve 100 members of your community through an outreach program, your goal could be to serve 20% more people in 2025.

MEASUREABLE:  When writing your goal of serving 20% more people, be sure to define what exactly qualifies as “serving 20% more people.”  Is it a total of 20% more community members attending a certain type of event across the entire year?  Is it an average of 20% more people consistently participating each month? 

ACHIEVEABLE:  Deliberately ambitious goals are intended to inspire staff members.  However, if your team believes there’s no realistic way they can meet the new goal, it may have the opposite effect.  In essence, you’re looking for the sweet spot between a goal which is so easily achievable that your nonprofit doesn’t have to do much to meet it and a goal which is so lofty that people stop trying because it’s too overwhelming.

RELEVANT:  Given the resource limitations often facing nonprofits, it’s critical to make sure your organization’s goals squarely target your mission.  It can often be tempting to branch into new tangents in the hope of reaching new audiences.  But it’s important to take a step back to make sure your goals reinforce your mission rather than spreading your organization too thin.

It’s not uncommon to have a wish list of goals that exceeds your nonprofit’s resources.  One helpful way to narrow down potential strategic goals is to list all goals on a sheet of paper with “Start”, “Stop” and “Keep” boxes next to each one.  Encourage multiple staff members, board members, and other organization leaders to quickly mark one of the boxes for each goal.  Tallying total responses can be an illuminating way to rank the priority of each potential goal.

TIME-BASED:  Setting a specific timeline for each goal can help team members measure their progress.  Consider breaking larger strategic goals into a series of short-term priorities to be accomplished within tighter deadlines.  This can help staff members focus on the basic steps during each short-term priority. 

It’s also a good way to more easily monitor whether the team is on track to meet the larger strategic goal – by spotting missed deadlines when there’s still time to correct your overall approach.

Taking time at the end of the year to evaluate where your organization will land on 2024 goals can be the key to confidently starting 2025 off on the right foot.

In addition to fine-tuning your organization’s strategy and goals for the coming year, November and December can also bring about complex HR questions as your nonprofit closes out 2024.  UST can help you find reliable answers on questions about employee paperwork, whether a staff member should be categorized as full-time or part-time or how your HR staff should handle changing regulations in your state. Sign up today for a free 60-day trial of UST HR Workplace!

SOURCES:

“How To Set Strategic Goals At Year End For Your Nonprofit,” Globalgiving.org, 11/20/23

“Annual Planning for Nonprofits: How To Set Your Organization Up For Success,” Trifecta Advising, viewed 10/28/24

Social media has become an indispensable tool for nonprofit organizations in today’s digital age. It offers unprecedented opportunities to engage with communities, amplify your message, and drive impactful change. However, navigating this rapidly evolving landscape requires strategy, creativity, and a keen understanding of your audience.

The Power of Social Media for Nonprofits

Social media platforms like Facebook, X (formerly Twitter), Instagram, and LinkedIn have transformed how nonprofits connect with their supporters. Here are a few reasons social media is crucial for nonprofit engagement:

• Reach a Wider Audience: Social media allows you to reach a global audience at little to no cost. With the right content, your message can travel far beyond your immediate network.
• Community Building: Platforms provide a space for your supporters to engage, share experiences, and build a community around your cause.
• Real-Time Feedback: Engagement via comments and reactions offer valuable insights into how your message resonates with your audience.
• Storytelling: Visual and narrative content can powerfully convey your mission and impact, helping to foster a deeper emotional connection with your supporters.

Strategies for Effective Engagement

To harness the full potential of social media, consider the following strategies:

1. Define Your Goals: Before you begin posting, outline clear objectives for what you want to achieve. Whether it’s increasing awareness, boosting donations, or growing your volunteer base, having clear goals will guide your content strategy.

2. Know Your Audience: Understand who your audience is and tailor your messaging to their interests and preferences. Use analytics tools to gain insights into your followers’ demographics and engagement patterns.

3. Craft Compelling Content: Create content that resonates with your audience. Use storytelling to highlight personal stories of those impacted by your work, share success stories, and showcase behind-the-scenes glimpses of your organization’s efforts.

4. Leverage Visuals: Visual content is more likely to be shared and remembered. Use images, infographics, and videos to grab the viewer’s attention and communicate your message more effectively.

5. Engage Actively: Social media is not just about broadcasting messages; it’s about fostering dialogue. Respond to comments, engage in conversations, and show appreciation for your supporters’ contributions.

6. Collaborate and Network: Partner with influencers and other organizations to expand your reach. Cross-promotions can introduce your cause to new audiences.

7. Monitor and Adapt: Regularly review your social media performance to understand what is working and what items may need improvement. Be ready to adapt your strategy based on these insights.

Overcoming Challenges

While social media offers numerous opportunities, it also presents challenges such as managing negative feedback, keeping up with platform changes, and balancing time and resources. It’s important to have a crisis management plan and a dedicated team or volunteer to monitor and manage your social media presence.

Social media holds immense potential for nonprofits to engage more deeply with their communities and drive their missions forward. By implementing strategic, audience-focused approaches, your organization can create meaningful connections and foster long-term support.

Ready to learn more? Read more UST blogs here on how we can help support the growth of your nonprofit.

In today’s evolving nonprofit sector, fostering diversity and inclusion within the workforce is not just a moral imperative but also a strategic advantage. While the sector is racially diverse, there remains a significant gap in leadership representation. This blog post will explore the current state of workforce diversity in nonprofits, the benefits of a diverse and inclusive workforce, and practical steps your organization can take to close the diversity gap.

The Diversity Gap in Nonprofit Leadership

Despite the nonprofit sector’s overall diversity, leadership ranks do not reflect this variety. According to data from 59,550 public charities that shared demographic data between July 2019 and January 2024¹:

• 47% of all staff identify as white, 24% as Black/African American, 19% as Hispanic/Latino, 6% as Asian American/Pacific Islander, 1% as Native American, and 4% as multiracial.
• 70% of CEOs/executive directors (EDs) and 66% of board members identify as white.
• Only 15% of CEOs/EDs are Black and 6% are Latino. These leaders are more often found in smaller organizations—with 44% of nonprofits with expenses under $50,000 led by BIPOC individuals, compared to 27% for those with expenses above $25 million.

This suggests that while people of color are well-represented at the staff level, they are disproportionately confined to smaller organizations and underrepresented in larger, wealthier nonprofits. The discrepancy raises important questions about biases in hiring practices and opportunities afforded to white individuals early in their careers.

Benefits of a Diverse and Inclusive Workforce

A diverse and inclusive nonprofit workforce offers numerous benefits:

• Enhanced Innovation: Diverse perspectives foster creativity and innovation, essential for solving complex social issues.
• Improved Decision-Making: Inclusive teams make better decisions by considering a wider array of viewpoints and experiences.
• Broader Community Reach: A diverse workforce can better understand and serve varied communities, enhancing the organization’s impact and relevance.
• Increased Employee Engagement: Inclusive workplaces tend to have higher employee satisfaction and retention rates.

Six Steps to Building a Diverse and Inclusive Workforce

1. Conduct a Diversity Audit: Start by assessing your current diversity levels at all organizational levels. Identify gaps and areas for improvement to set clear, measurable goals.

2. Foster an Inclusive Culture: Create an environment where all employees feel valued and included. Encourage open dialogue about diversity and inclusion and implement policies that support a respectful and collaborative workplace.

3. Revise Recruitment and Hiring Practices: Ensure your recruitment processes attract diverse candidates. Use blind recruitment techniques to minimize biases and create diverse hiring panels to make more inclusive hiring decisions.

4. Provide DEI Training and Development: Educate your staff about the importance of diversity, equity, and inclusion. Offer regular training sessions and workshops. UST HR Workplace offers 300+ employee training courses, including DEI training and awareness.

5. Establish Mentorship and Sponsorship Programs: Support underrepresented groups by establishing mentorship and sponsorship programs. These initiatives can help emerging leaders gain the skills and networks they need to advance in their careers.

6. Monitor Progress and Accountability: Regularly review and report on diversity and inclusion metrics. Hold leadership accountable for progress toward diversity goals and celebrate successes along the way.

Building a diverse and inclusive nonprofit workforce is crucial for creating impactful and sustainable change. By taking intentional steps to promote diversity and inclusion, your organization can improve its effectiveness and better serve the communities it aims to support.

Are you ready to transform your nonprofit workforce? Click here to start your free 60-day trial of UST HR Workplace. Access not only 300+ employee training courses, but live certified HR experts, an online employee handbook builder and much more.

Join us on this vital mission to champion diversity and inclusion within the nonprofit sector. Together, we can create a more equitable future for all.

Source

1. https://blog.candid.org/post/diversity-in-nonprofit-sector-candid-demographic-data-report/