The “Overhead Myth” Starves Nonprofits

Last week, a Tweet I saw really grabbed me – “Underinvesting is expensive! Starving nonprofits leads to inefficient systems.” It was from The Bridgespan Group, a global nonprofit that helps other nonprofits in the hard work of developing strategies.

 

Working with less means you get less.

 

For some reason, non-profits are expected to run on a shoestring. Starving nonprofits limits investments in the necessary people and systems to perform effectively.

 

GuideStar USA, Inc., used the nonprofit data they collect and report to form a business case to help break the “overhead myth” about limiting overhead costs. They offered steps to debunk the myth and shift the conversation from overhead to the need to invest in people and systems.

 

Five Steps to Debunk the “Overhead Myth”:

 

  1. Clearly document objectives and the intended impact of meeting those objectives. This informs donors about your mission and community, and sets the framework for measuring impact.

 

  1. Describe the strategies employed to achieve stated objectives and impacts. Donors are more inclined to support nonprofits that connect strategic goals with action plans and expected results.

 

  1. Discuss the capacity to deliver the programs and services to meet stated objectives. Describe capacity investments needed to establish and sustain the necessary infrastructure to support programs.

 

  1. Tell donors how you measure progress. This communicates that you are monitoring the achievement of your organization’s goals and helps donors trace the impact of their gift.

 

  1. Share results from recent work and describe additional results that you want to achieve. Highlighting successful projects illustrates how goals are achieved and helps donors visualize their gift in action.

 

Charting your non-profit’s objectives and impact, and the investment needed to deliver effective programs debunks the overhead myth. Helping donors understand infrastructure needs will compel them to give.

 

More tools and information to help non-profits to re-direct donor conversations from the “overhead myth” to performance and results are found at www.overheadmyth.com.

Make Next Tax Season Less Painful

Phew! Tax Filing Season 2017 is finally over! Well, how did it go for you? Painful? Long? Expensive?

 

Tax season’s end is the perfect time to look back at what went well and how to make next year go faster and easier. In short, less painful. Whether you prepare your own taxes or use a tax professional, you can take steps to reduce your pain and spend less time on your taxes.

 

Three tips will make next tax filing season much less painful:

 

Get Organized

Disorganized tax records means that getting ready to file takes hours away from enjoying your life. Not to mention the stress! Having a computerized or paper process is essential for getting organized. Scanning documents into folders or filing papers into an accordion folder puts everything you need at tax time in one place.

 

Know What to Keep

Use your 2016 tax return to identify the information you’ll need to accumulate during 2017 to prepare for next year. Will a life event in 2017 change your tax situation? Things like buying a home, starting a business, or getting married all impact your taxes. Find out what documents you’ll need for tax time next year.

 

Keep Records Up-to-Date

A big stack of papers waiting to be organized can be scary. Keep up with the paperwork and the task is easier to do. Not to mention how much easier it is to find information, because it’s right where you need it to be. Need pay stubs and account statements to apply for a loan? It’s all there, ready for you.

 

Make next tax filing season less painful, long and expensive by getting organized, knowing what to keep, and keeping up-to-date. You’ll be glad you did, next year and every year after that.

Can’t Make the Tax Deadline? Help is Here!

April 15th is on a Saturday this year and Monday is a holiday, so the tax deadline is pushed back to April 18th. Three extra days! Four extra days if you live in Massachusetts or Maine. But what if you’re still not ready to file?

 

Whatever your reason, the IRS gives you an automatic six-month extension to file. That’s a reprieve to file, not to pay. More about that later.

 

If you’re not ready to file by April 18th you need to know two things:

 

  1. How Do I Get an Extension?

 

Individual taxpayers use IRS Form 4868 to request an automatic extension to file their federal income tax return. Businesses and estates use different forms but the process is essentially the same.

 

An extension can be filed on the IRS’ website, e-filed using approved tax software, or in paper form. All you need are your name, address, and tax ID number. There are also spaces for your estimated tax liability, taxes paid in, and any amount due.

 

Paper forms must be postmarked or date-stamped before midnight of the due date.

 

  1. What If I Owe?

 

If you will owe more tax than you’ve already paid, the balance due must be paid with your extension request. Failure to pay will result in an underpayment penalty and interest on the unpaid amount, accrued daily until it’s paid. That really adds up.

 

If you are getting a refund, your extension is automatically approved. But you still have to wait to get your tax money back until your return is filed.

 

Need more details about getting a federal tax extension? Go to the IRS website at http://1.usa.gov/1XHtzSM or consult a qualified tax professional.

Don’t Forgot those 2017 Tax Estimates

As you’re rushing to file your 2016 taxes on time, it’s easy to forget some important details.

 

Detail #1 – You get three extra days to file this year. The weekend and holidays push the filing deadline from April 15 to April 18. Great news!

 

Detail #2 – and not-so-great news — The first quarterly estimated tax payments for 2017 are due by the same day. It’s a Double Whammy for some, but that’s the way it is.

 

The IRS and state tax agencies both expect their tax payments at least quarterly. Federal estimated payments are due April 15, June 15, September 15, and January 15 of the following year. Unless, like this year, the 15th falls on a weekend or a holiday.

 

Who Needs to Pay Tax Estimates?

If all your income comes from wages, chances are that your withholdings cover your income tax liability. If you are self-employed or receive other income, such as interest, dividends, capital gains, or rent, you probably need to make estimated income tax payments.

 

How Much?

You must pay estimated tax for 2017 if you expect to owe at least $1,000 in tax after subtracting withholding and refundable credits. Withholdings or estimates must total the smaller of 90% of your 2017 tax liability, or 100% of your 2016 tax liability.

 

What if You Don’t Pay Enough?

Penalties are assessed if you do not make the required payments throughout the year, as income is received. Also, interest accrues daily on the underpaid amount. That can really add up.

 

Clearly, the IRS and other taxing agencies are serious about getting paid on time. Figure your 2017 federal income tax bill by using the IRS Withholding Calculator at http://1.usa.gov/18lMbRu. States and the District of Columbia also have online information about withholdings, estimates, and underpayment penalties.

 

When in doubt, or if you are not comfortable with DIY tax preparation, consult a qualified tax professional.