4 Mistakes Your Nonprofit Shouldn’t Be Making

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Compliance is not just a requirement; it’s the foundation of your nonprofit’s stability. Those who overlook standards risk their hard work and jeopardize the lives they touch and the causes they champion.

It’s not uncommon for even the most well-intentioned nonprofit managers to stumble into compliance pitfalls. Whether these missteps are inadvertent or not, it’s crucial to recognize them and learn from others’ experiences to avoid similar traps.

Not Keeping Accurate Records

65% of small to medium nonprofits struggle with accurate record-keeping and filing to keep on top of donations, grants, revenue staff expenses, and so on. This could be down to many reasons, such as sloppy record-keeping, misclassification of donations, or incomplete paper trials. But if these mistakes occur, you need to be more diligent in your record-keeping. I hope you provide clear and accurate records of every detail pertaining to our organization and what you do. Most importantly, this is crucial for 990 compliance, and if you don’t know what you need to do in terms of filing your 990 forms, you should get expert help to help you ensure you are working towards being completely compliant.

Conflicts of Interest

Ideally, there will be no conflicts of interest within your nonprofit; after all, that’s not why you should be doing this, and those who art in it for the following reasons will soon find themselves becoming unstuck. However, perceived conflicts of interest are one of the major factors that can create compliance issues within nonprofits and damage trust and relationships with the audience and donors. What this means is that if a person within the organization stands to gain anything from a relationship personally, this can be an issue, i.e., a stakeholder who benefits personally from a deal with a vendor.

Under Investing In Fundraising

Donations and fundraising are the lifeblood of your nonprofit. While it may seem counterintuitive to spend money on these activities, remember, it’s an investment, not an expense. Neglecting to invest in fundraising can lead to a significant drop in donations. So, make sure a substantial portion of your finances is dedicated to this crucial area.

Poor Hiring

Hiring the wrong people for your nonprofit can be a massive problem, and not vetting or monitoring them can be a massive issue. The reason is that people who work for a nonprofit are always needing to do more with fewer resources. This can make things even more challenging than they need to be or even should be. Your team needs to be able to be creative in how they approach what they do; you need to have support in place to assist them however they need it and have guidelines and controls in place to ensure standards are being met at all times.

Striving to make your nonprofit the best means helping you to avoid many of the common mistakes often encouraged by this type of organization and ensure that you do not run into compliance or organizational issues due to any of the issues mentioned.

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