If you are wondering if it's time to shift your private practice to a non-profit, or if you're interested in adding a non-profit arm to your business, check out today's episode featuring Tosha Anderson! She and Julie chat all about non-profits in private practice from compliance to compensation. Tosha also mentions some great resources for when you are looking to get started!
Tosha Anderson is the founder of The Charity CFO, an accounting firm that specializing in working with non-profits across the United States. She has years of experience as an auditor, non-profit board member, and a consultant. Tosha enjoys sharing her knowledge and experience with non-profits of all sizes to help them better understand their finances and set them up for success!
Episode Highlights:
- When does it make sense to start a non-profit?
- When you want to create some kind of foundation to help your audience
- When you are looking for funding from specific sources that only offer support to non-profits (family foundations, some government entities, etc.)
- Compensation
- When you become a non-profit, you have to consult with your board about your compensation and any raises or bonuses you may receive
- Bonuses are sometimes frowned upon in the non-profit community, so take that into consideration if you plan on expanding your services or generating additional sources of income, you may not always be able to reap the financial benefits of doing so
- Your personal income becomes public knowledge when you have a non-profit, be aware that people will be able to comment or scrutinize your pay
- Compliance
- Annual Compliance
- Generally, every state requires you register as a non-profit but the federal government is who decides if you are a tax exempt entity
- You are required to file an annual tax return regardless of if you have made money or if your non-profit is even active
- Maintenance Compliance
- You are responsible for maintaining your board, meeting funder's requirements (trainings, reporting, etc.), and meticulous recordkeeping
- It is recommended that you seek professional accounting services when you run a non-profit in order to manage your books as efficiently and accurately as possible
- Audits
- Audits are unique by state. Some states require audits while others don't.
- Non-profits are required to pay for their own independent auditor. Keep that extra expense in mind when starting your non-profit.
Links & Resources:
Tosha Anderson - The Charity CFO
The Charity CFO Facebook
Passion to Execution by Lyn Scott
The EMyth by Michael E. Gerber
Atomic Habits by James Clear
GreenOak Accounting
Therapy For Your Money Podcast