• But my friend told me we didn’t have to pay state sales tax because we are a nonprofit.”
          see:  Don’t Get Bitten By UBIT
     
  • “We have an accountant on our board and she said that we didn’t have to pay federal payroll taxes for our employees.”
           see: EEEEK, We Got A Letter From the IRS
     
  • “They said those dates weren’t available at all. “
             see: says who? 

Does any of this sound familiar? As managers and the ones who ultimately stop the buck at your nonprofit, it is sometimes a bit too easy to take someone’s word for something. For some things, and sometimes, that is perfectly OK, maybe for topics including the weather (‘take my word for it, it will rain, bring an umbrella.’) But in the business of running your shop, this is a very dangerous practice.

Ronald Reagan

While negotiating an arms agreement with Russian president Mikhail Gorbechev, in the late 1980’s, Ronald Reagan famously quoted to him, in Russian, Doveryai, no proveryai,”, Trust, but verify*. Really smart. Of course you would love to be able to accept information as fact, for face value and as truth. But many times, that is not the case, and not checking can be at your peril.

There is simply too much at stake to allow a problem that could have been easily avoided to become headache, or worse. Slow down, make sure the fact is truly the fact. Fixing, repairing, apologizing  demand on your time, money and attention. What could that energy or those funds have been applied more productively than fixing something.

*(Trust but verify came from accounting 200 years ago. Trust the totals but verify the math.)

The Road to Hell

How does something as obvious as this happen?

People for the most part really do mean well- and we know the road to hell is paved with good intentions. We all know just how much there is to do for anyone connected with a nonprofit; it can be very seductive to not have to read one more 18 page, 10 point font, single-spaced contract or sift through the dense and murky rulings of the IRS and take someone’s word for it. Specifically  if they are confident or this is an area they seem knowledgeable about. 

You probably can get away with being a little lazy a few times, but inevitably, a problem will crop up that will be based on the fact you have not done your due diligence. There are ways to find out reliable and accurate information without having to become an expert, but do be sure the source of your information is in fact expert and knowledgeable. 

Nonprofit Mistakes

Mistakes in life are inevitable, however there are  many that can be avoided. Think about what it is you AREN’T sure of and address getting reliable information about that before you have to reschedule, pay the penalty fee, or rearrange your budget and fundraising for the year.

  • Don’t be too busy to start off in a protective mode for your work by assuring that your information is in fact, fact. Not sure what a word or phrase means? Ask. 
     
  • Don’t be too proud to say ‘I don’t know’ if someone asks you something that that you don’t know, but for sure find out. Then do and be sure of your sources.
     
  • Don’t let ‘but he told me….’ be the reason you are up to your butt in the swamp. Reduce the chances of having to address issues that could have been easily foreseen with a little bit a foresight. Somethings you can’t see coming, save your energy for those true emergencies. 

 Take the extra time, double check, look at the second and third result from your search, post questions on Linked In or other professional forums. Make the effort to assure that your information is accurate and reliable. 

What happened:

  • The state franchise board forwarded a notice of unpaid taxes and threat of penalty for every day this was not addressed. All the sales records had to be  hauled out, reviewed, calculation made and a check written to the state. 
     
  • In fact, federal payroll taxes were due and by the time the taxes, interest, penalties and fees were assessed, the bill was $75,000. That was not in the budget so that amount  had to be raised in addition to the other development targets.
     
  • The rooms she has asked for were actually available, the wrong department had been asked and misunderstood the question. 

Need help finding reliable resources? Give a call, let’s get this right for you, the first time.  310 828 6979. 

 

 

image credit: https://ballinyourcourt.files.wordpress.com/2012/08/trust-but-verify.jpg