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Chartered Accountants &
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Building a Legacy Won’t Happen by Itself – You Need a Plan

“Even though your time on the job is temporary, if you do a good enough job, your work there will last forever.” ― Idowu Koyenikan, Wealth for All: Living a Life of Success at the Edge of Your Ability

Building a legacy won’t happen by itself. It requires your creative input and a grounded strategy.

In a previous blog, Life goal #3: Building a Legacy, we started the discussion about the definition of a legacy, reasons for creating one, and how that vision differs for everybody. We then mapped out the three critical elements of succession planning, which includes your team, the structures and processes needed, and the cost component.

Let’s continue the discussion about succession planning to ensure your legacy continues to thrive whether you’re on an extended absence, for when you move on to other aspirations, retire, or pass it on to loved ones after you are gone.


Why Think About Succession Planning?

“Succession planning is a process and strategy for replacement planning or passing on leadership roles. It is used to identify and develop new, potential leaders who can move into leadership roles when they become vacant.” – Wikipedia

Consider the following questions, and you’ll know why a legacy cannot be established without it:

  • What will happen when you leave the business? Will it fall apart without you, and everything you built will no longer exist?
  • What will happen if any of your key team members leave without you having someone else, already trained, to step into their place?

Succession planning is not only about putting structures in place for when you leave, but also for when any of your key employees leave. Why would you, or team members plan to leave?

  • Perhaps you or one of your team wants to retire in ‘x’ years.
  • You may be the CEO who takes over a business to turn it around, but then want to leave for your next career challenge.
  • Or you may be an entrepreneur with a great idea that you want to develop, but you don’t want to run the company afterwards. You may choose to either sell the business or get a CEO to run it for you.

Whatever the reason or circumstance, you need the right people and the right structures in place for a successful transition.


When Should You Start Thinking About Succession Planning?

Yesterday. No pressure.

You cannot wait one year before you retire or move on to haphazardly throw it together. Why? Your first succession plan may not pan out the way you thought, and you may need to start from scratch again.

If you aspire to build a legacy, then yes, you should start thinking about it from day one. We know, it may feel like putting the cart before the horse, but planning for it goes hand-in-hand with your business practices now. It’s about building the right culture in the business that will live on.

“Make a difference, change the game for the better, leave a legacy, be a guide that someone else can follow and make better, and then someone else will follow that and make that better.” ― Carlos Wallace, The Other 99 T.Y.M.E.S: Train Your Mind to Enjoy Serenity


How to Start the Process

Putting a succession plan in place might feel overwhelming, but it doesn’t have to be. Our experience proves that a formula for success takes you through four stages.


Stage 1 – Take stock of where you are now:

  • How is your business performing? What are the numbers?
  • Who are the key people? What talent gaps do you have?
  • Evaluate the processes and procedures for their effectiveness or redundancy.


Stage 2 – Create your masterplan for the future:

  • Where do you want to be in two, five or ten years?
  • What is your vision for the business at that time, and its potential opportunities?
  • Do you currently have the team you’ll need to make your vision a reality?
  • How much money do you need to implement the succession plan? If you don’t have the money, how will you solve that? Our blog, Life goal #3: Building a Legacy, gives more detail on the financial costs to consider.


Stage 3 – Implement your plan:

  • Put the structures in place and document procedures. Train people to follow the processes.
  • Invest in retaining your best employees and prepare them for their future roles.
  • Develop and train your team within the key positions.


Stage 4 – Review & tweak:

  • Test and adjust procedures and processes as needed.
  • Do a trial run to determine whether your team can carry on without you by going away for two weeks. Then extend another absence to a month, with no contact.
  • Send other managers on holiday and let people step into that position to see how they fare.


Ready to Get Started?

The team at BWMD would love to hear your ideas for what a legacy looks like for you. Our experience can help you put the processes, structures and team in place to make it happen. Contact us today to get started!

How to Operate Your Non-profit Like a Business


Whether it’s to help autistic children have access to tutoring or to provide affordable housing for the elderly, the mission of your non-profit organisation is the focus, and requires innovation and business savvy to make an impact.

We reviewed some of the unique distinctions of non-profits in our blog, Non-Profit Accounting and Tax Tips 101. But when it comes to similarities, the parallel between them and conventional business is the approach in which they are managed to provide value. This approach is what we want to focus on in this blog.

Whether a new organisation or well established, there’s plenty of tips here for all stages of a non-profit, so let’s go!


Why You Should Follow a Business Approach

There’s no getting around the fact that providing value, in whatever form or desired outcome, requires the same level of operational proficiency as a conventional business.

However, what is perceived as ‘value’ differs. A non-profit solves a problem with either a product or service, but the value it brings is providing a solution to a societal problem. Whether to feed the hungry or preserve wildlife, a donor’s gratification comes from knowing their investment is supporting the greater good.

In order to realise the greatest societal impact, non-profits must invest in their organisations, as any business would – if not more!

Everyone wants charities to spend as little as possible on overhead. That’s backwards. Overhead is what drives growth. If charities can’t grow, they can’t solve problems. So overhead is a good thing. And I’m overhead.” – Dan Pallotta, author


Key Components of a Business Approach

In our blog What You Should Know Before Starting a Non-profit in New Zealand, we emphasized that a ‘not for profit’ doesn’t mean ‘for loss’, and explained why you need to put your entrepreneur hat on. We said, “just like a regular business, if you run an efficient operation, you’ll be able to provide a much better service to the people or cause you’re trying to serve.”

A non-profit has accountability to both the community and donors, to operate in a way that meets revenue goals each year, without making unnecessary expenditures.

The following tips will ensure the best chance of making the greatest societal impact.

Act, Speak, and Perform Like a Business

It might seem obvious, but your attitude matters, and will determine your behaviour, choices and habits. Have a look at our blog, Ten Tips to Improve Your Habits and Business on how to disrupt and reboot behavioural patterns that might be holding your non-profit back. Operating it like a business will help cultivate relationships in your community, and develop win-win collaborations with donors or members.

Create Models of Sustainable Income

Donations are fabulous, until they stop. Investing in building stable revenue generating programs or services will ensure you’re not reliant on donor dollars or government grants alone. By making the mission profitable with revenue-generating services at the core of your organisation, you’ll have less dependency on philanthropy.

Understand the ROI

Track, analyse, pivot. Focus on short and long-term returns on investment to ensure your strategy and efforts are bringing in the greatest bang for your buck. Effectively working with the proceeds you have while maintaining expenditures within your budget is a result of responding to positive or negative ROI outcomes. Similar to conventional businesses, doing a costs and benefits analysis could help you to make better decisions on which activities and strategies to pursue.

Take Innovative Risks

Non-profit organisations are in the business of disrupting what is currently the norm, but also a problem to solve, and filling the role as ‘change agents’ to bring improvement to social issues. Making an impact will sometimes require taking calculated risks, which like any business, is necessary for making progress. Seek new ideas and opportunities, and assess short and long-term opportunities to scale.

Keep a Steady Eye on Expenses

Stay vigilant about what funds are not used efficiently. No matter what your income is, it won’t result in much impact if money is going down the drain. What could be trimmed, or donated? For example, evaluate what expense could be procured with a gift-in-kind campaign, to not only cut costs, but attract practical support and involvement from the community.

Invest Smartly

While monitoring expenses and the ROI as mentioned above, put your revenue to its best possible investment in the following areas.

  • Your Team. High quality staff results in a high quality organisation. Onboard the best talent for key positions, providing competitive benefits, salaries or hourly wages. Build a company culture that they love to work with, and take care of your people so they are invested in the success of your non-profit. Commit to building your leadership and teambuilding skills. You can learn how active listening can make a big improvement in this area by reading our blog, When Great Minds Don’t Think Alike, Exceptional Things Happen.
  • Marketing. It goes without saying that a polished presentation is a deal-breaker in todays’ society. The top necessities are a modern website that is easy to navigate, a solid brand that is unique and recognisable, local advertising, and social media presence. Newsletters, social media with engaged membership groups, and video marketing with a YouTube channel provide limitless opportunities for free marketing and visibility, so don’t skimp on keeping up with any of these activities in one form or another.
  • Technology and Equipment. Whether from donations, grants or raised funds, your technology and operational equipment needs to drive the engine of your non-profit. Make the most of free tools and software, but also have the mindset for growth and staying current.

Invest in the Right Accountant

We know that successful non-profits require a unified approach of building a solid foundation, measuring performance, having confidence in your decisions, and evolving strategically in the direction you want. Contact the team at BW Miller Dean to see how we can help your non-profit thrive.

Non-Profit Accounting and Tax Tips 101

People are yearning to be asked to use the full measure of their potential for something they care about. – Dan Pallotta, author

We continue our series on non-profit organisations, with tips to help you navigate the rewarding venture of running a charitable operation for a cause you’re passionate about. If your non-profit is still new, or you’re still considering whether to start one, read What You Should Know Before Starting a Non-Profit in New Zealand first. 

Now let’s look at the accounting and tax-related aspects that are unique to non-profits. Since the purpose, goals and needs of non-profits are different from those of conventional businesses, there are some aspects of their accounting that are handled differently too.  

Because the purpose of non-profits is to serve their cause, they are accountable to their supporters and contributors. The most important bit to understand is that there should be a money trail for all money that comes in and flows out of the bank account.  

Here are a few more tips that will help you run your organisation smoothly, and legally. 

Record All Your Income

You need to keep different sources of revenue separate in your accounts, because not only will it be easier to track and report on, but some income could be taxable.

Types of Revenue:

  • Donations – People donating to your organisation can get a tax deduction, so it’s both important to keep a proper record, and you need to send donees a receipt which they can include in their tax return.
  • Pledges – Some pledges could be conditional, like matching a future pledge from another donor, so track these accordingly.
  • Membership Dues – Subscriptions could be recurring monthly or annually and are usually for some type of service in return, like educational material in the form of magazines, webinars, or other events.
  • Special Events – These could include entrance fees to attend fundraisers or other occasions.
  • Grants or Other Lump Sums – There may be grants available from local or federal government agencies or from the private sector for your industry.
  • Volunteer Time and In-Kind Contributions – The donation of time and non-monetary services or goods also needs to be accounted for. This could be services from skilled professionals such as counsellors, tradesmen, marketers or bookkeepers, or someone gifting your organisation with a free piece of equipment such as a new computer.

Choose the Right Accounting Software

We don’t recommend you compromise when it comes to the engine that drives your accounting. Look for these must-have features:

  • Designed for Non-profit Organisations – Choose a package that features this customisation to handle the unique features that charities need, and even better, was developed with the input and recommendations of other non-profit entities.
  • Robust Reporting – Don’t settle for minimal features here, but look for the ability to track and report on multiple statistics that you can customise, such as debtor days, asset to debt ratio, expense cover trends, and liquidity graphs.
  • Supports Your Growth – Choose software that can grow with you and can be scaled up for extra add-on apps, additional users, or other features at a higher level of usage than what you might first start out with.
  • Other Handy Features – These could include donation tracking, donor management, third-party app integrations, and easily accessible customer support or FAQ forums.

We recommend using Xero for your accounting, with Spotlight Reporting for creating your monthly or quarterly reports. Xero has a great function to track different types of income and expenses with tracking codes, so you can report on each individual income stream separately. You need to set it up correctly from the start, so make sure you get in touch so we can help you with that. Spotlight Reporting has great reporting functions and a template specific to non-profit organisations, which we find useful.


What About Tax?

One of the great advantages of having non-profit status is that you don’t generally have to pay tax on your income, which will leave more money in your accounts to put towards running your organisation and providing a better service to your cause.

However, some forms of income are taxable. These include:

  • Business-related revenue, such as income from op shops (e.g. Salvation Army);
  • Investment income, such as interest on a term deposit, shares or real estate transactions.

Some non-profits could qualify for an exemption on the first $1,000 of taxable income from business activities or investments, so make sure you get in touch with us for more guidance.

Even if you have no taxable income, you will still have to file a tax return each year with the IRD, and you still need to deduct PAYE from your employees’ salaries as with any other job.


Do I Need to Register for GST?

As with for-profit businesses, if the income is above the GST threshold – if turnover is/or expected to be more than $60,000 in 12 months – you will need to register.

If you’re unsure whether you should register, or if you need help with registering and completing your GST returns, get in touch with us.


Partner With the Right Accountant

Operating a successful non-profit organisation requires professional support, as the reporting is distinct from conventional businesses. It’s vital to hire an accountant who not only understands your vision and goals and can give unbiased advice, but also understands the compliance and legal obligations specific to non-profits. Contact the team at BW Miller Dean to see how we can keep you on top of the finances in your non-profit.