A nonprofit’s checklist for end-of-the-year activities

The last days of the year are known to be jolly good times filled with festivities, merriment, family time and more. But it’s a busy time for nonprofits, who spend much of the season engaging their community to garner end-of-the-year support. 

It’s also the time of year to tie up loose ends, ensure compliance, organise record-keeping and more. 

Here we provide a quick checklist for important year-end activities for nonprofits.     

1. Ensure compliance with legal requirements

Due to the charitable nature of nonprofits and how they operate, certain regulations are usually in place to guarantee order and transparency. Your nonprofit’s checklist for end-of-the-year activities should begin with ensuring that you comply with such laws.

Usually, nonprofits are mandated to hold annual general meetings and take minutes of such meetings. This meeting of your nonprofit’s board of directors is necessary for the review of the organisation’s policies, the election of new board members and the review and approval of budgets. 

The next step is to file the organisation’s tax reports and also report grants and contracts. Depending on where your nonprofit operates, there might be policies that mandate descriptive reports of how the funds were used and who was served. Also, local laws might request a periodic update of your organisation’s offices and addresses, along with the details of its directors and officers. 

Such nonprofit end-of-the-year reports indicate that your organisation is active and keep the government updated on its affairs.           

2. Organise your financials

When preparing to enter a new year, it’s necessary to tie up all loose ends in terms of finance. This holds true for all ventures, whether for-profit or otherwise. An end-of-the-year financial checklist for your charitable organisation begins with data entry and account reconciliation. Record every donation and transaction to ensure that no detail slips through the cracks.  

Financial management also involves an assessment of the year’s budget and the actual expenses to see if the nonprofit spent more than it planned to. Such analysis will yield the organisation’s statement of cash flow and functional expenses.

This will let you know your nonprofit’s financial standing and tip you off on steps to take in the following year.     

3. Communicate with donors

As the year winds up, it’s important to communicate with donors and potential donors in your community. This communication serves a variety of purposes, one of which is to appreciate your donors. Demonstrating your gratitude to your donors for their support is a sure way to secure a special place in their hearts for your organisation and encourage them to keep supporting you.

In the US, a donor acknowledgement letter is required for donations over $250 to help the donors claim deductions on their individual tax returns. If this is applicable, it might be helpful to send a written acknowledgement to them at the same time. 

You can equally make appeals to potential donors. Sending seasonal greetings, sharing your nonprofit’s values and mission with them can help in soliciting year-end donations. They might be prompted to support you instantly or have your organisation at the forefront of their mind as they make plans for the coming year. 

In like manner, follow up with donors who are behind on their pledges. There’s the possibility that other concerns took priority or they’ve faced financial challenges. A warm reminder will prompt them to fulfil their promise or give you an update on the situation and possible next steps.     

4. Assess your performance for the year

Another item on your nonprofit’s end-of-the-year checklist is to measure your performance in the year. This step is vital because it’s the true gauge of your nonprofit’s success that year. Besides showing any improvement during the year, it also gives a good idea of how you should plan for the coming year. 

An excellent place to begin the evaluation of your organisation’s success is by calculating the return on investment of the various programs and fundraisers held within the year. Also, you should pay attention to your year-end cash balance. If your nonprofit’s accounts are green, it’s a sign of proper resource management. 

It’s equally important to observe your donor conversion and retention rate. How many new sponsors did you gain and how many of the old ones are still with you? If you’ve either lost a significant number of them while gaining only a few or none at all, then it might be time to go back to the drawing board.       

5. Plan for the coming year

One thing you want as an organisation leader is for your nonprofit to start the next year with a bang. This means hitting the ground running, making bold strides and growing your nonprofit. To achieve this, it’s essential to prepare adequately at the end of the year. 

Identify the goals you’d want to hit in the next year and proceed to lay out the necessary plans to bring them to life. With a good knowledge of what was successful and what flopped in the current year, setting strategies to nail your aspirations will be helpful. You’ll have the insight to make adjustments or adopt entirely new tactics.

Don’t wait till the new year comes to begin your preparations.    

6. Evaluate, engage with and celebrate your team 

Your team also needs an assessment at the end of the year. This will reveal whether there’s a need for extra talent. Request for feedback from your team on any organisational  processes and how they feel things can be improved.

Also, celebrate your organisation’s accomplishments for the year with your team. Many of the achievements would not have been achieved without their efforts, so give them due recognition for their contributions. This will fire them up for the coming year.      

The last days can be an active time for charitable organisations as you prepare for the following year. However, this checklist can help you get organised and ready for the coming year of success.