Advanced Crisis Line Training

· Dustin

Introduction

A few years ago when I was working for Distress Centre Durham (DCD), I undertook a project to develop a new advanced training curriculum for telephone responder. Currently the Basic Training is 16 hours of in-class, plus another 16 hours of supervised phone shifts where a responder demonstrates that they have the active listening, empathy, suicide and crisis intervention skills we need for them to be on the phones independently.

After about 3 months or 50 hours they are required to undertake an Advanced Training session. This session helps consolidate some of the learning, revisit some of the classroom skills and then to build some additional skills going forward.

This training was turned into a PowerPoint that I won’t share because it contains some copyrighted Distress Centre Durham material – but you can read below for information that you could use as the foundation of your own advanced crisis line training. I’ve since made some updates so this training goes beyond the original that I developed for DCD.

Session Information

The length of the session was usually about 3 hours. The content covered was as follows:

  • Introduction
  • Burnout and Stress Management
  • Handling Difficult Calls
  • Advanced Suicide Intervention
  • Advanced Crisis Intervention
  • Discussion of Difficult Situations
  • Conclusion

Five Step Limit Setting Process

For more information on this limit-setting process, you can see my article Setting Limits and Boundaries with Callers. Briefly, the five steps are:

  1. Identify the inappropriate behaviour
  2. Identify what correct behaviour is
  3. Indicate the consequences for failing to change behaviour
  4. Give the caller an opportunity to change their behaviour
  5. Follow through on consequences (e.g. hanging up) if behaviour does not change

Active Listening Process (ALP)

For more information on the active listening process, you can see my article Active Listening Process on Crisis Lines. As a quick reminder, the different skills in the ALP include:

  • Voice Tone
  • Pace
  • Setting the Climate
  • Open Ended Questions
  • Close Ended Questions
  • Empathy Statements
  • Clarifying
  • Paraphrasing
  • Summarizing
  • Referrals
  • Winding Up

Burnout and Stress Management

What is Burnout?

Burnout is a “state of physical, emotional, or spiritual exhaustion.” It occurs when we give too much of ourselves for too long and don’t take appropriate steps to recover. Symptoms of burnout can include:

  • Becoming cynical or critical of callers
  • Being irritable or impatient
  • Feeling responsible for the outcome of calls
  • Having unexplained headaches or other physical complaints

An example of a situation I knew a responder was feeling burned out was when they took a 20 minute call with a regular caller who was dealing with relationship issues. While their on-the-phone work was good, when the call was over, they were very upset that the caller was not in crisis and just wanted to bounce ideas off the responder.

This responder felt like their time was being wasted by this caller, when we could be taking crisis calls instead. It’s clear that responder cared a lot for our callers – but they were not treating all of our callers like they were important to us. For this reason, we had a discussion about how our service is preventative and designed to both provide emotional support and crisis intervention. The responder took a leave of absence and when they returned several weeks later they were recharged and ready to support all of our callers.

Emotions on the Helpline

We can experience a range of emotions on the helpline. Some of these are positive and some of these are negative.

Positive Helpline Emotions

  • Excited
  • Grateful
  • Happiness
  • Hopeful
  • Meaningful
  • Optimistic

Negative Helpline Emotions

  • Anger
  • Frustration
  • Guilt
  • Confusion
  • Physical fatigue
  • Nightmares
  • Intrusive thoughts

What Causes Burnout?

There are a number of causes of burnout. These include working too many hours on the helpline – feeling like you’re a martyr or you always have to be there. Having your expectations set too high and expecting clients to change or improve (they call us because we’re a source of support that don’t ask them to change.)

Being isolated or having a lack of social support can increase burnout, as can a failure to debrief either with peers or supervisors after your calls. Feeling disconnected from the day-to-day events and other things happening at the crisis line can also cause increase your fatigue and burnout.

Overall, if you feel ineffective in your work you’ll be at greater risk for burnout.

Preventing Burnout

To prevent burnout, it’s important that you always debrief after tough calls. You can talk to your peer in the call room, you can talk to your supervisor. You can work fewer shifts or even take a Leave of Absence away from the Centre for a while, to recharge. Adjusting your personal life so you have a better work/life balance, and coming to Team Meetings and other social events can help you.

Finally, stress management techniques and having a strong support network will help you prevent burnout.

Relaxation and Stress Management Techniques

  • Bubble Bath
  • Hot Shower
  • Meditation
  • Physical Exercise
  • Sleep
  • Yoga
  • Others…?

Handling Difficult Calls

There are a range of difficult callers that responders can be confronted with. These include individuals with significant mental health issues, “chronic” or repeat callers who are calling for social maintenance reasons and sexual fantasizers or abusive callers who are trying to misuse the service.

Seriously Mentally Ill Callers

These individuals have significant struggles or may be actively in a mental health crisis. They might speak very quickly and not let you get a word in edge-wise, or they may be very impatient. Winding up the call be difficult and these calls can make you feel ineffective or frustrated.

Remember to keep an open mind, and remember why we support these callers. They often have few resources other than us that are non-judgemental and empathic. Let the caller vent their fears, anxieties and frustrations, but always remember the Active Listening Process (ALP).

If a caller is having delusions, we must not feed into those delusions but instead empathize with the underlying emotion. Rather than saying “Yes, there could be vans outside your house monitoring your thoughts”, say something like, “That would be really scary if it were happening.”

Social Maintenance Callers

These individuals are calling because they’re lonely. While our service provides support to them we must make sure that they do not monopolize the lines, or push boundaries in trying to collect personal information on our callers.

We will use our 5-Step Limit Setting Process if the caller wants identifying information, and try to engage the caller openly in things that they can do, or that you and them can talk about, to reduce their loneliness. When the call starts going in circles (they’re repeating themselves and not moving on to anything new), we can begin to wind up the call.

They should call us back tomorrow if they’d like to speak again, and you can discuss with staff the setting of a time limit or other restrictions.

Sexual Fantasizer Callers

These can be some of the most frustrating calls for us to deal with, because they make us question what we’re doing on the helpline. These callers are often difficult to determine as sexual fantasizers at first – they drag it out as long as possible.

When we begin to suspect that we’re speaking with a sexual fantasizer, we must remind them to stick to the discussion of the emotions of their problem. For example, sometimes we get legitimate callers who want to talk about cross-dressing, sexual orientation, or sexual fetishes. If these callers are genuine, they will prefer to speak about the emotions of those elements and how they impact those around them, rather than discussing the specific activities of cross-dressing, having sex with men, or engaging in a sexual fetish.

You might feel angry or used when the call ends if you don’t figure it out early enough. You’ll need to make sure that you debrief and put your stress management techniques into practice.

Angry or Abusive Callers

These callers are those who are calling to take emotions out on you. This can be challenging and is not an appropriate use of our service. Using your Five Step Limit Setting Process, you’ll need to let the caller know that you are here to listen if they are upset but that they cannot direct language at you.

If they would like to make a complaint, they should call the office line. Set the boundary, and if they continue then you’ll end the call. And make sure you follow through!

Suicide/Crisis Intervention

Suicide intervention is the process of assessing and intervening with someone who is at high-risk of suicide. Once you’ve done some risk assessments on the phone you’ll have a better sense of how to weave these questions into your exploration of the caller’s issues.

By starting each suicide assessment with “Have you done anything tonight to kill yourself or end your life?” you’ll be able to move smoothly into the safety planning questions. Your goal is to make sure that you have a sense of whether the caller will be safe tonight. If they will, you don’t have to worry. If they won’t, you can begin building a safety plan or support network collaboratively with the caller to make sure they will be safe.

You’ll want to conduct a suicide risk assessment:

  • Any time you suspect a caller is suicidal
  • When they tell you they’re having suicidal thoughts
  • Even if the person denies current suicidal thoughts

In an emergency, when the caller has already taken steps to end their life, you must:

  1. Change your voice tone. Become assertive, to let that caller know that they need to cooperate with you so you can get them help
  2. Collect their location, and other identifying information
  3. Tell them to unlock their door, open the door if they can, so that emergency personnel can reach them
  4. Debrief after the call with your supervisor

Example of Suicide Intervention

  • Caller explains they have self-injured today
  • Responder assesses suicide risk, they come up medium on the CPR or DCIB Suicide Risk Assessment
  • Responder explores coping strategies but they say there’s nothing they can do, they’ve tried it all and they can’t guarantee their own safety
  • Responder arranges for a taxi to take them to hospital or mental health crisis bed

Discussion of Difficult Situations

During the discussion of difficult situations, responders would talk about situations that they personally found challenging – whether or not they were covered on the above. A group discussion would help responders get a better sense of how their peers would handle those situations, and the facilitators would share their own thoughts. This helped to increase the confidence of the responders in dealing with those situations in the future.

Conclusion

We would wrap the session by thanking everyone for coming out and presenting them with an Advanced Training certificate. Completion of both Basic and Advanced Training was required for a responder to be considered a Certified Volunteer Helpline Worker.

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Basic Strategic Planning for Nonprofits

· Dustin

Introduction

Strategic planning is the process used to make a plan for a nonprofit or other organization over the next few years. It is a living document that helps steer the ship and ensure the organization continues to carry out its mission.

Strategic planning models and phases abound, this is just one example of a model of strategic planning that your Board can use. The OnStrategy model includes 4 components:

  • Determine Position
  • Develop Strategy
  • Build the Plan
  • Manage Performance

Determine Position

Determine the Position includes identifying the issues that you need to focus on. What are the risks and opportunities your organization is facing right now? You also need to collect information about your clients, the state of the market and other relevant information that will help you plan.

Develop Strategy

Next, developing strategy involves reviewing the organization’s mission, vision and values. What is the purpose of the organization, has it changed since your last strategic plan? What are your core beliefs (your values), and what would the world look like if your organization succeeded in its goal (its vision)? These all help you set the strategy your organization will follow.

It is important to identify your competitive advantages. What makes your organization different from the others in your industry, in your sector, in your area? This will help you later when it comes time to determine your organization’s messaging. If you don’t know your value proposition, your messaging will be muddied and this will make it more difficult for your organization to be successful.

Once you have done these things, you will develop objectives and set out strategies to help you meet those. Financial forecasting may also be part of this process.

Building the Plan

Building your strategic plan involves taking the big and long-term goals and setting smaller objectives and goals to help you on the road-map. For example, your major objectives will be set out over the next 3 years (in many strategic plans), but you need to identify goals for the next 3, 6, and 12 months – and then for the 12, 18, 24 and 36 months on the way to the next strategic plan.

You may select Key Performance Indicators that you can refer to on a regular basis (perhaps even at each monthly meeting) to know if you are on track. These could include:

  • Monthly Donations
  • Number of Service Users
  • Retention Rate of Volunteers

You will also need to create or review the budget in order to make sure the organization has the money they need to work on these goals.

Manage Performance

Finally, the last item in the strategic planning process is Manage Performance. This involves setting a schedule so that you understand when key events will be taking place and when milestones will be met. Your KPIs might be added to each agenda. You may wish to implement a quarterly review to make sure the Executive Director is still on track to meet these goals.

Finally, a one-year review will let you see what goals you have achieved and what goals remain to be completed.

Conclusion

Have you ever facilitated a strategic planning session, what was it like?

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Introduction to Life Coaching

· Dustin

Introduction

Life Coaching is a field that has been expanding since the 1970s with the growth of the Human Potential Movement. Life Coaching is “partnering with clients in a thought-provoking and creative process that inspires them to maximize their personal and professional potential” (International Coach Federation, n.d.)

Life coaching is frequently performed by counsellors and therapists but also by trained paraprofessionals. Although Life Coaching is an unregulated field there is accreditation through organizations like the International Coach Federation (ICF) or the International Association of Coaching (IAC).

Life Coaching vs Counselling/Psychotherapy

Life Coaching is often confused with counselling or psychotherapy. As coaching is unregulated and counselling/therapy are, coaches must proceed carefully to ensure their work does not cross over into the regulated activities of counselling or therapy with clients.

Life coaching focuses on achieving specific, concrete changes in someone’s life that are skill-based. Counselling and therapy are based around the idea of achieving normalcy or recovery from a mental health issue, while coaching clients are seeking superior performance. (Nelson-Jones, 2007)

Goals of Life Coaching

The goals of life coaching are as varied as the goals of psychotherapy clients or any other situation. For example, mid-career executives seek out life coaching to help make them better public speakers. Some will get a Life Coach to help them achieve their educational goals. Basically any part of your life (academic/educational, relationships, money, career, or others) can be fertile ground for life coaching.

When you see a Life Coach, you will participate in an assessment process to help you better understand your goals.

Life Coaching Model

Life coaching books, like counselling books, teach phase models of intervention to help you structure your contact. The Nelson-Jones (2007) Model is a four-stage, several phase model

Stage 1: Relating

Phase 1 – Starting the Initial Session

The goal in the relating stage is to build a strong working relationship, and to identify what the client wants out of coaching. The first session is the opening conversation: why is the client here?

Phase 2 – Facilitating Client Disclosure

Open-ended questions and strong empathy and rapport-building will help facilitate client disclosure. This will help the coach get a sense of the client’s resources (strengths) and weaknesses, in order to make a plan.

Stage 2: Understanding

Phase 1 – Reconnaissance, Detecting and Deciding

This involves exploring the client’s issues, to understand where the root of the problems is. Skilled questioning, reflecting back at the client what they are saying and probing to find out how they really want their life to be different is key here. The Miracle Question can be useful here: if you woke up tomorrow, and all your problems were solved (but you didn’t know they were solved), how would you know? What would be different?

Phase 2 – Agreeing on a Shared Analysis of How to Achieve the Client’s Life Goals

In this phase, you have a shared understanding of what the causes of the client’s problems are, and you’ve developed goals together to fix their problems. Then you’ll move into the intervention stages.

Stage 3: Changing

Phase 1 – Intervening

In the Changing Stage, the clients will implement the plans you’ve developed together. For example, your client may begin a journal and using a planner to improve their organizational skills, or may start taking classes in college to improve their education. The client may complete “homework” between sessions or do other work to help them stay on track, while the coach keeps track of their progress towards their goals.

Phase 2 – Ending

In the Ending phase, the formal coaching wraps up. The client and coach look together at the progress they’ve made and begin the process of tying up loose ends.

Stage 4: Client Self-Coaching

Phase 1 – Maintenance and Improvement

The Maintenance part of Maintenance and Improvement involves the client and coach making plans for the future and discussing what the client will need to do in order to maintain the improvement they’ve made.

Phase 2 – Self-directed Growth

The final phase of the model involves the client taking the progress they’ve made until now, and without the need of the coach, continuing to develop themselves.

Conclusion

This is a very brief introduction into a field in which many books and other resources have been written. Do you have anything to add? Write in the comments.

References

International Coach Federation. (n.d.) “Coaching FAQs – Need Coaching – ICF”. Retrieved on June 14, 2017 from https://www.coachfederation.org/need/landing.cfm?ItemNumber=978&navItemNumber=567

Nelson-Jones, R. (2007) Life Coaching Skills: How to Develop Skilled Clients. SAGE Publications: Thousand Oaks, CA.

Cite this article as: MacDonald, D.K., (2018), "Introduction to Life Coaching," retrieved on May 24, 2019 from http://dustinkmacdonald.com/introduction-life-coaching/.
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Deliberate Practice in Social Work

· Dustin

Introduction

Every field has people who are clearly at the top of their game, people who are in the middle or average, and people who shouldn’t be in the profession or who perform very poorly. And everyone wants to be part of that star-performer, top 10% group. Do we know how to get there? Surprisingly, yes. There is a lot of research on “supershrinks” (those rated in the top 10%) and how they differ from other therapists. The outcome of that research applies equally well no matter what role you have.

What it boils down to is that the best therapists, social workers, and clinicians actively practice the basics, and try to get as good as they can. The worst rated therapists, spend far less time on their own professional development.

Chow et. al. (2015) examined a variety of elements to discover what were related to therapeutic outcome. Consistent with what we’re taught in school (that therapeutic modality is responsible for very little change), Chow and colleagues found no relationship between gender, caseload, age, degree, and other elements affected outcome.

What they did find is that the highest performing therapists spent the most amount of time working on their clinical skills. The top performers spent an average of 7 hours a week engaged in deliberate practice. The lowest performing therapists spent around 20 minutes a week engaged in this same kind of work.

Deliberate Practice

Deliberate practice (Ericsson, Krampe & Tesch-Romer, 1993) is a term coined by Psychologist K. Anders Ericsson. He has spent his career studying experts, and found deliberate practice capable of explaining prodigies in music, sports, and even medicine. Malcolm Gladwell’s pop-psych book Outliers: The Story of Success made the case that individuals we see as different simply get more opportunities to practice their skills. Unfortunately he missed the “practice” in deliberate practice, and what most people took away from the book was that you needed 10,000 hours of practice – no matter good or bad, and this is obviously not the case.

Applying Deliberate Practice to Social Work

As a social worker or other clinician, it’s important to make sure that you practice the basics:

  • Read books on basic counselling techniques like Intentional Interviewing and Counseling
  • Video or audiotape yourself (with client consent) and discuss clips in supervision
  • Complete training courses in your chosen therapeutic modality and continue to expand

In addition to engaging in this practice, you must perform outcome based measurement. This involves empirical tools to assess your client’s progress throughout counselling or therapy. By doing this kind of assessment, you can begin to understand what elements are working in your sessions and which ones are not.

Scott D. Miller, the expert in supershrinks, has developed the Outcome Rating Scale (ORS) and the Session Rating Scale (SRS). These are standardized rating scales that clinicians can use to track their client’s outcome over time. You can read more by Scott D. Miller in this presentation.

Daryl Chow (who co-authored that study above about supershrinks spending 7 hours a week on deliberate practice) also authored his thesis (Chow, 2014) on the same topic. During that thesis, he wrote that “compared with their peers, therapists’ self assessment of effectiveness was not correlated with actual outcomes, in spite of the use of outcome measures in their clinical practice.” Essentially, we don’t know when we’re doing well or not doing well, and it’s important to use rating scales and continuing to take feedback in order to improve.

References

Chow, D.L., Miller, S.D., Seidel, J.A., Kane, R.T., Thornton, J.A. & Andrews, W.P. (2015)  The role of deliberate practice in the development of highly effective psychotherapists. Psychotherapy. 52(3):337-45. doi: 10.1037/pst0000015

Ericsson, K.A., Krampe, R.T., & Tesch-Romer, C. (1993) The Role of Deliberate Practice in the Acquisition of Expert Performance. Psychological Review. 100(3). 363-406.
Cite this article as: MacDonald, D.K., (2018), "Deliberate Practice in Social Work," retrieved on May 24, 2019 from http://dustinkmacdonald.com/deliberate-practice-social-work/.
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Understanding IRS Form 990

· Dustin

Introduction

Nonprofit organizations in the US are required to file Form 990 with the Internal Revenue Service (IRS). This is a tax document that the IRS requires, that can help you understand more about a nonprofit that you are evaluating or are interested in working with. If you don’t have accounting training, or haven’t served on a nonprofit Board of Directors, you may be unfamiliar with this vital document.

This document is not intended to be professional accounting advice or replace the services of a qualified accountant. Always seek professional assistance to make sure you fill out this form correctly.

Finding The 990

There are a number of resources you can use to find an organization’s Form 990. Many nonprofits post their 990 publicly. For example, the Red Cross For example, the Red Cross includes a comprehensive list of financial statements on its website, including their Annual Report, their Form 990 and their Audited Financial Statements.

Additionally, there are several organizations that maintain databases of Form 990s:

Finally, the IRS includes a Tax Exempt Organization Search which can help you find an organization’s EIN (). This number can be searched to find the Form 990 and other documents.

Sections of the 990

The IRS provides blank copies of the Form 990, but it’s generally easier to look at a completed one to get a sense of the different type of information. There are 12 sections (called Parts) and 15 sections (lettered A through O) that can make up the Form 990.

Part I through XII

  • Part I. Summary
  • Part II. Signature Block
  • Part III. Statement of Program Service Accomplishments
  • Part IV. Checklist of Required Schedules
  • Part V. Statements Regarding Other IRS Filings and Tax Compliance
  • Part VI. Governance, Management, and Disclosure
  • Part VII. Compensation of Officers, Directors, Trustees, Key Employees, Highest Compensated Employees, and
    Independent Contractors
  • Part VIII. Statement of Revenue.
  • Part IX. Statement of Functional Expenses
  • Part X. Balance Sheet
  • Part XI. Reconciliation of Net Assets
  • Part XII. Financial Statements and Reporting

Schedule A through O

These links take you to the IRS information on this schedule.

Form 990, United Way of Central Iowa

Let’s review an actual Form 990. I picked the United Way of Central Iowa, an organization with about 30 million in assets.

Introduction

From the very top of the document, we can see the organization’s name, address and phone number along with the Employer Identification Number (EIN). We see the first date the corporation was incorporated (1918!), the website, and the specific section of the Tax Code that the organization gets its tax-exempt status (501c(3)).

Part I, Summary

In the summary section we see the mission of the organization, “Improve lives by uniting the caring power of community.” We see the organization brought in just under $28 million in 2017, $27,528,063 was from donations, while the organization generated $391,675 in program service revenue, and $72,916 in investment income.

From that amount, the United Way paid out $22 million in grants to other organizations. Line 18 shows the total expenses of the organization, and Line 19 indicates that the organization had a loss of revenue less expenses of $651,210. Even though the organization had less revenue come in than they had expenses go out, the Net Assets or Fund Balances section shows the organization actually finished the year with more money than they had before: they started the year with 33,322,892 and ended the year with $33,624,994 – an increase of $302,102. This difference is made up of line 21 (Total Liabilities) which went down by $76,977 – meaning the organization owes less money, and an increase in assets from $36,596,559 to 36,821,684 (an increase of $225,125.)

$225,125 + 76,977 = 302,102. For this reason, it is unwise to simply look at the excess of revenue over expenses, as collecting a debt or increasing an asset (such as a Temporarily Restricted Contribution becoming “current” or usable) will not necessarily show up as revenue.

Part II, Signature Block

The Signature Block includes a section for the Treasurer or other Officer to indicate that they have reviewed the Form 990 and other documents – and also a space to indicate if there is an Accountant or other paid preparer who may be consulted in lieu of the Treasurer.

Part III. Statement of Program Service Accomplishments

Part III includes a short description of the organization’s mission, followed by an explanation of the 3 programs with the highest amount of expenses, and summarizing total program expenses.  The United Way of Central Iowa has chosen to include their 3 focus areas of Education, Health and Income as their 3 largest programs along with Community Impact Services (which include the 211 helpline and other programs run directly by the United Way.)

Part IV. Checklist of Required Schedules

Part IV includes a checklist. For each box that is checked, you will need to complete the associated Schedules of the Form 990. For example, for the United Way of Central Iowa, they must complete:

  • Schedule A
  • Schedule B
  • Schedule C Part II
  • Schedule D Part IV, V, X, IX, XI, XII
  • Schedule G Part III
  • Schedule I Part I, 2, and 3
  • Schedule J
  • Schedule M
  • Schedule O

Different organizations will have different requirements.

Part V. Statements Regarding Other IRS Filings and Tax Compliance

In Part V, you indicate information that helps the IRS understand your other IRS filings. For example, line 1a notes that they filed 60 forms in total for their tax compliance, while 2a indicates the organization had 84 employees. The other sections include information on income, other financial accounts (like those in foreign countries) and different types of contributions they’ve received.

Part VI. Governance, Management, and Disclosure

In Part VI, you provide information on the size of your Board of Directors (31), and questions about the organization’s finances, governing policies like Conflict of Interest or Whistleblower policies and where financial statements (like the 990) are made available.

Part VII. Compensation of Officers, Directors, Trustees, Key Employees, Highest Compensated Employees, and
Independent Contractors

Part VII describes the Board of Directors, and the compensation information for key employees. Most nonprofit Boards of Directors are uncompensated, but may receive honorariums for travel or other expenses. We can see the Chief Operating Officer Sarah Roy receives $181,000 a year in salary, while Elizabeth Buck makes $158,000 a year.

Highly paid independent contractors are also listed here, if they made more than $100,000 in a year.

Part VIII. Statement of Revenue

The Statement of Revenue indicates in more detail the sources of revenue in the organization. We can see that government grants totalling $178,535 were given to the organization, while other donations included $27,349,528 and non-cash contributions (such as advertising) added up to $334,395. Other forms of revenue (beyond donations) are provided.

Part IX. Statement of Functional Expenses

The Statement of Functional Expenses includes salaries paid to employees, employee benefits, grants (the core of the United Way’s model), expenses used to provide services, and other standard line items like Legal fees, Accounting , Office Expenses and Information Technology.

Part X. Balance Sheet

The Balance Sheet is a statement that includes the amount of assets the organization holds (including cash, savings, Accounts Receivable – people who owe you), and other assets. Liabilities including Accounts Payable are the debts that the organization owes.

At the bottom of this section is Temporarily Restricted Net Assets and Permanently Restricted Net Assets. Temporarily restricted net assets are those that are restricted for a period of time. For example, you may receive a $100,000 donation with the stipulation that it not be spent for 10 years. Once the 10 years are up, it will return to general net assets. You can invest Temporarily Restricted Net Assets and spend the interest generated, but not the capital.

Permanently Restricted Net Assets are those that can never be spent. This means that even if your organization ceases to function, the Secretary of State (or similar official) of your State, will give that money to another organization serving a similar purpose.

Part XI. Reconciliation of Net Assets

The Reconciliation of Net Assets shows the total revenue and expenses along with the changes in the assets detailed above. This is how we wind up at our final total of assets, to know whether the organization is worth more (made more money) during the year than they lost – because the asset values are higher than they were at the beginning.

Part XII. Financial Statements and Reporting

Financial Statements and Reporting tells you whether the organization uses Cash Accounting or Accrual Accounting. In cash accounting, you take into account current cash balances on an immediate basis. If you spend $50 your assets go down, if you receive $100 your assets go up. Accrual accounting takes into account that you may receive revenue today that you can’t spend until next month, and you may receive bills today that are not due until next month – and takes those things into account.

Accrual accounting is the most common form of accounting in the business world and the nonprofit world, but small organizations will likely use Cash Accounting because it is simpler.

Schedules

The different Schedules included on the Form 990 are linked to with instructions at the top of the page. These instructions will help you better understand the information required for each one.

Professional Development

There are a variety of professional development opportunities for those who want to learn more about nonprofit accounting.

Conclusion

The Form 990 is an important form used in nonprofit tax compliance, but also has the opportunity to provide you valuable information on a nonprofit that you are considering working for or are evaluating. I hope this has been a helpful post. Please let me know if you have any questions.

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