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November 18, 2015
© 2015 Rehmann
Moderator: Lisa VanDeWeert, CPA
Principal • Rehmann’s Not-for-Profit Group
Leader • Responsible for supervising and
reviewing audit and internal audit fieldwork, financial statement preparation and presentations to clients.
• Experience includes planning, performing and supervising audit and internal audit engagements in a variety of industries including higher education, not-for-profit, manufacturing and insurance organizations.
[email protected] 616.975.2852
© 2015 Rehmann
Presented by: Kerry Nelson, CPA
© 2015 Rehmann
Kerry Nelson, CPA
Principal • Director of Rehmann’s not-for-
profit tax practice and 1040 committee leader
• Experience in the areas of tax planning, tax compliance, 1040 and 990 preparation and payroll reporting
• Provides services to not-for-profits, family owned and closely held businesses, their shareholders and officers
[email protected] 231.946.8927
© 2015 Rehmann
Learning objectives
• Understand what charitable solicitation means
• Recognize if an organization is required to register in a particular state
• How to find information needed for compliance
• Social Media and what it means to your organization
© 2015 Rehmann
Raising contributions is vital for nonprofits
© 2015 Rehmann
Solicitation defined
• Solicitation – any direct or indirect request for a contribution, whether express or implied, through any medium.
– Oral requests
– Written requests
– Sale or attempt to sell goods or services
– Announcement requesting the public to attend a gathering, event, or entertainment
© 2015 Rehmann
State’s authority to regulate
• Physical presence – Have an office
– Own real estate
– Conduct program activities
• Raising funds in the state – Mailings
– Telephone calls
– Conducting a webpage
© 2015 Rehmann
Internet solicitation
• National Association of State Charity Officials (NASCO) adopted “Charleston Principles” in 2001
• Encourages
– States to develop common policies
– States to impose limits on expected compliance from out-of-state charities
© 2015 Rehmann
Internet solicitation - continued
• General guidelines to registration:
– A nonprofit should register in the state in which it is domiciled
– A nonprofit specifically targets a person in a particular state
– A nonprofit engages in passive solicitation
© 2015 Rehmann
Current status of regulation
• 40 states (plus DC) have registration requirements
• 10 states do not
– Delaware, Idaho, Indiana, Iowa, Montana, Nebraska, South Dakota, Texas, Vermont, Wyoming
© 2015 Rehmann
Exemptions available
• Most Common: – Religious Organizations – Educational Institutions – Libraries – Museums – Health Care Institutions – Solicitation of Members Only – Veterans’ Organizations – Solicitation for Specified Individuals – Organizations raising small amounts (e.g., $25k)
© 2015 Rehmann
Determining state registration
• Does the organization have a physical presence in a particular state?
• Is an organization soliciting in a particular state?
• Are “substantial” or “repeated and ongoing” contributions coming from a particular state?
© 2015 Rehmann
State registration process
• Unified Registration Statement (URS) – Can be found at http://multistatefiling.org/
– An effort to consolidate the information and data requirements of all states
– A work in progress
– About 37 states currently accept • States requiring registration that do not accept URS
– Florida
– Oklahoma
– Colorado
© 2015 Rehmann
State registration process - continued
• Common documents required with registrations – Articles of Incorporation
– Bylaws
– IRS Exemption Determination Letter
– IRS Form 990
– Compiled, Reviewed, or Audited Financial Statements (depending on amount of gross revenue)
© 2015 Rehmann
What should you do …
• Register in your home state
• Register where your supporters reside
• Register where your organization is very active
• Check directly with Attorney General or whichever government unit that has oversight in that state for accurate compliance
© 2015 Rehmann
Polling Question #1
How many states require registration?
A. All states
B. 32 states
C. 40 states
D. 10 states
© 2015 Rehmann
Impact on Nonprofits
© 2015 Rehmann
Social media – what is it?
• Types – Twitter
– YouTube
– Usually tied into a crowd based funding platform
• Benefits – Create your own fundraising page
– Leverage power of your personal networks
© 2015 Rehmann
Social media - continued
• Costs
– Charity receives donations net of fees
– Individuals do the work setting up the sites
– Individuals send the “asks” out to their “donor lists”
© 2015 Rehmann
Social media - continued
• Risks
– Charity may or may not end up with donor info
– Need to make sure social media site is set up correctly
– Donor gets the full charitable contribution amount
– Charity receives donation net of platform fees
– Charity needs to react quickly when the “social storm” hits to capitalize on the opportunity
© 2015 Rehmann
Crowd Based Funding
• What is it? – Website that facilitates the exchange of money – If you are not a public charity, it’s a gift – Charities adding a “Start Fundraising Now” button – Peer to Peer fundraising
• What is it NOT?
– A bank – A charity – REGULATED!!!
• Examples: Giveforward.com; Gofundme.com; Fundly.com
© 2015 Rehmann
Crowd Based Funding - continued
• Risks
– Anyone can set up a site and say they are you
– Need to be on lookout to make sure no one is posing as your charity
– Gift taxes can apply to personal gifts
– Watch for online fundraisers that turn into online raffles
© 2015 Rehmann
Polling Question #2
Crowd based fundraising is:
A. Free
B. Regulated
C. Very low-risk to your organization
D. Fee-based depending on the provider
© 2015 Rehmann
Social media tips for small organizations
• Make sure your website is “Mobile Friendly”
• Make sure your online, off-line and in-person messaging is consistent
• Organize to make online involvement & giving a core competency
• Craft messages to appeal to all ages – crisp, simple and uncluttered
• Be sociable with followers
© 2015 Rehmann
Thank you!
© 2015 Rehmann
© 2015 Rehmann
Presented by: Jessica Dore, CISA
Jessica Dore, CISA
Senior Manager
• Technology Risk Management
• Specializes in technology consulting & security
• Experience in leading teams and performing IT security assessments for clients
[email protected] 989.797.8391
© 2015 Rehmann
The pace of change is picking up
© 2015 Rehmann
Data is exploding
Source: spotfire.tibco.com
© 2015 Rehmann
Communication is changing …
Source: www.bates-communications.com
© 2015 Rehmann
The way we interact is changing …
Source: pafamilylaw.foxrothschild.com
© 2015 Rehmann
Processes are changing …
Source: siliconangle.com
© 2015 Rehmann
We are connected 24 x 365 x 7
Source: www.innovata-llc.com
© 2015 Rehmann
With all this connectivity comes
Source: news.hitb.org
© 2015 Rehmann
Fraud, cyber crime & the bottom line
$400 billion lost annually to fraud and misappropriation
by US organizations
6% of annual revenue lost to fraud and abuse by the
average organization
$5.4 million to resolve the average data breach, not including liability issues
© 2015 Rehmann
Source: progressbangladesh.com
Cyber crime is here to stay
• Cyber warrior ‘mercenaries’ for hire worldwide
• Cyber crime is a multi-billion dollar underground economy
• Cyber crime is an industry of suppliers, distributors and manufacturers
• Information is the commodity
© 2015 Rehmann
Polling question #3
Has your organization been a victim of cyber crime?
A. Yes
B. No
C. No, but I know of an organization that has been
© 2015 Rehmann
60% of organizations FAIL within 6 months
of being hacked
• Loss of cash from bank accounts
• Cost of breach repair and recovery
• Cost of notification
• Cost of compliance
• Cost of lost clients
• Cost of reputation loss
Source: www.greenskyproductions.co.uk
© 2015 Rehmann
Small organizations - a big target
• Don’t believe they will be attacked
• Cybersecurity not a priority
• Weak cybersecurity/ outdated tools
• Poor employee training
• Poor or no data breach response plan
• Lead to bigger fish
Source: ameriscope.com
© 2015 Rehmann
Major cyber attacks
• 80 million identities – Anthem
• 47,000 SSNs + threats – Sony
• 76 million bank records – JP Morgan
• 56 million credit cards – Home Depot
• 100 million credit/debit cards – Target
• 145 million or more emails – eBay
© 2015 Rehmann
Cost of average cyber breach
• Average cost of a breach $5.4 million
• Each lost record costs $188 average
• ($188 x 10,000 records = $1,880,000)
• Disruption alone costs $937,000 per breach
• Plus: liability issues for identity theft, etc.
© 2015 Rehmann
The cyber crime toolkit
Spyware Malware
Phishing/
Pharming
Skimming
Trojans/
Viruses
Watering Hole
Keylogging
Ransomware
Social
Engineering
Dumpster
Diving
Bot Bot
DDOS
© 2015 Rehmann
Social engineering scams
• Email from you
• Email from your internal staff
• Message from friend overseas and in trouble
• Nigerian email scam
• “Your tax refund is already taken care of”
© 2015 Rehmann
Social engineering
© 2015 Rehmann
Ransomware
• Your data taken “hostage”
• Ransom email
• Today $300
• Tomorrow more
• If you don’t pay, they destroy your data
© 2015 Rehmann
What do they do with the information?
• Cyber criminals sell personal identifying information or use it to:
– Open false bank accounts
– File false IRS returns
– Open false credit cards
– Steal from bank accounts
– Hack into other accounts/businesses
© 2015 Rehmann
Employees are the weakest link
• Negligent insiders are the top cause of data breaches
• Clicking on links in emails
• Sending work email to personal accounts
• Using data on insecure lines
• Not following corporate policies
• Not securing mobile devices
© 2015 Rehmann
Vulnerability: weak IT security
• Poor access controls
• Poor patch management
• Improper device configuration
• Lack of security audits
• Weak enforcement of remote login policies
© 2015 Rehmann
Where should you focus?
• Data
• Perimeter
• Access
• Governance
• Vendor
• Mobile
• Human
Source: www.lifehack.org
© 2015 Rehmann
Data management
• Data – What is it and where is it?
• Risks - What is it worth?
• Access Paths – How can you get to the data and what are the control points?
• Access - Who can get to your data?
www.intelymind.com
© 2015 Rehmann
Perimeter management
• Do you have a firewall?
• Do you have a DMZ?
Source: www.linklogger.com
© 2015 Rehmann
Segregate the network
• Is the Network Virtualized?
• Do you leverage VLANs to segregate the Network?
www.automation.comwww.automation.com
© 2015 Rehmann
IDS/IPS - alerts
• Do you have an Intrusion Detection System?
• Do you have an Intrusion Prevention System?
• Are alerts turned on?
• Are they monitored?
infosecprimer.wordpress.com
© 2015 Rehmann
Monitor
• Conduct:
– External Vulnerability Test
– Internal Vulnerability Test
– Social Engineering Test
dstudio.ubc.ca
© 2015 Rehmann
Access management
Source: blog.lookout.com
• Access Control
• Restrict Administrative Access
• Perform Access Reviews
• Leverage Least Privilege
© 2015 Rehmann
Software patching
• How often do you patch?
• Best Practice = 30 Days
Source: www.gfi.com
© 2015 Rehmann
Backups
• Daily Backups
• Rotated Offsite
• Testing
www.itservicesalbuquerquenm.com
© 2015 Rehmann
Vendor management
• Selection Due Diligence
• Contract Reviews
• Annual Due Diligence
www.questproductsinc.com
© 2015 Rehmann
Cloud
www.data-hive.com
How do you know you are making a the right decision?
© 2015 Rehmann
Storage
mr2solutions.com
Where is the data stored?
© 2015 Rehmann
Mobile
Source: mobileappbuilders.co
• Mobile Device Strategy
• Acceptable Use Agreements
• Authentication & Encryption
• Secure Transmission
• Device Management
• Employee Training
© 2015 Rehmann
Training
• Train users on:
– Information Security Program
– Incident Response Plans
– Business Continuity Plans
– Security Threats
afgenvac.org
© 2015 Rehmann
Close the loopholes
Create & Enforce security policies
Educate employees
Update security software
Backup & encrypt data
Secure wireless devices
Purchase cyber insurance
Have an IT Security Assessment Performed
© 2015 Rehmann
Source: blog.zopim.com
In the end…
© 2015 Rehmann
Thank you!
© 2015 Rehmann
Presented by: Roger Webster
© 2015 Rehmann
Roger Webster
Principal • Expertise in determining client
employee administration needs and delivers technology-based solutions, ranging from full HRIS solutions to unbundled systems – Including assisting clients
throughout the entire employment process, including pre-employment, active employment and post-employment phases.
[email protected] 248.579.1130
© 2015 Rehmann
Attracting Talent
• Plan to succeed!
– Recruit from within
– Create an employee referral program
– Embrace social media
– Don’t neglect tried and true recruiting techniques
Attracting Talent
• Social Media
– 50% of employers use Facebook to post jobs
– 74% of employers have found a hire through Linkedin
– 94% are using LinkedIn as a recruiting tool
© 2015 Rehmann
Attracting Talent
• The Employment Package
– Clearly defined offering
– Competitive with other companies / region
– Creativity helps
– Career advancement opportunities outlined
© 2015 Rehmann
Hire Slow … Fire Fast
Finding The Right People
© 2015 Rehmann
Hire Slow … Fire Fast Finding the Right People
• The resume illusion that misleads unsuspecting managers.
• Shiny suit, great car, says all the right things.
Hire the right employee that fits your culture and is “coachable”.
© 2015 Rehmann
Hire Slow … Fire Fast Finding the Right People
• Comprehensive screening process
• Speed dating, “contenders versus pretenders”
• Ask for more than just the references
• When possible, hire to complete a project first
• Extended probationary period*
* Check all legal standards in your state. Labor laws vary by state.
© 2015 Rehmann
Polling Question #4
Do you use multiple systems or manual processes that require a significant amount of time to help you manage you employee administration?
A. Yes
B. No
© 2015 Rehmann © 2015 Rehmann
Understanding the Impact of
Turnover
© 2015 Rehmann
Understanding the Impact of Turnover
• What is your turnover rate?
• What is your retention rate?
• Voluntary versus involuntary turnover?
• Average tenure of current employees?
© 2015 Rehmann
Understanding the Impact of Turnover
Traditional Calculations of Turnover Costs
• Hiring & Firing
• Recruiting
• Interviewing
• Orientating, Training New Employees
True Cost Lies in the Hidden Costs
• Loss of Productivity
• Loss of Reduction in Business
• Expertise Loss
• Administrative Costs
© 2015 Rehmann
© 2015 Rehmann
Avoiding First Year Turnover
• Are the First Year Top Performers leaving?
• What did that cost?
• What is the opportunity cost from lost revenue?
• Was this churn in “key value- creator roles” and are we still going to make this year’s business plan?
© 2015 Rehmann
Avoiding First Year Turnover
• The majority of ALL turnover – 52% occurs in the first year.
• It actually peaks right at the 12 month mark at 27%.
• When a new employee starts work on their first day, they represent pure cost and a lot of potential.
© 2015 Rehmann
Avoiding First Year Turnover
• Retention strategies must start DAY 1
• Employee engagement
• Flexible schedules
• Positive work environment
• Fair compensation
• Competitive benefits
© 2015 Rehmann
Avoiding First Year Turnover
• Develop realistic expectations.
• Provide the proper tools and effective processes.
• Create challenges and career opportunities.
• Clarity to the scope of the job
© 2015 Rehmann
Avoiding First Year Turnover
• Identify strengths and weaknesses in your onboarding activities;
• Identify inconsistencies between the Talent Acquisition team and hiring managers;
• Are you overselling and/or not delivering value proposition
© 2015 Rehmann
The First 90 Days of A New Hire
© 2015 Rehmann
The First 90 Days of A New Hire
• Retention starts day 1
• Prepare for first day
• Create a plan for first 90 days
• Orientation
• Training
• Communication / Feedback
• Evaluate
© 2015 Rehmann
The First 90 Days of A New Hire
• Build confidence
• Show enthusiasm
• Bring out passion in new hires
• Manage across generations
• Guide employees to their full potential
© 2015 Rehmann
The First 90 Days of A New Hire
Case study: 450 employees / 4 locations / Technology Company
• Executive positions are all asked to complete a 90 day plan with input
• DiSC assessment must be completed
• Based on results, share strengths and blind spots new hires may have in their personality
• Work on “what needs to be accomplished in 90 days
© 2015 Rehmann
© 2015 Rehmann
The Importance Of Employee Engagement
• Only 29% of the U.S. workforce is actively engaged, 55% is not engaged and 16% is actively engaged
• That means 71% of the workforce is NOT engaged every day
• Annual cost in the United States is $350 Billion Dollars annually
© 2015 Rehmann
The Importance Of Employee Engagement
• Presenters – in the chair but not really there
• Engagement requires the Right People, Passion, & Persistence and not every company is up for that challenge
• How big of problem do you have with employee engagement?
© 2015 Rehmann
The Importance Of Employee Engagement
• 84% of how employees feel is driven by their immediate supervisor
• 60% of employees who have confidence in their leader are fully engaged
© 2015 Rehmann
The Importance Of Employee Engagement
• Generate Enthusiasm
• Inspire employees to achieve
• Build confidence
• Empower employees
• Show employees that they are valued
© 2015 Rehmann
Overview of Engagement Drivers
**These work together, not in isolation
Source: AONHewitt
© 2015 Rehmann
© 2015 Rehmann
Employee Retention Strategies
• Train supervisors to follow the strategy set forth
• Clearly communicate with all employees
• Train new employees – be creative
• Establish career development path
• Listen to new employees – they will like to know that they are accepted as part of the team
© 2015 Rehmann
Employee Retention Strategies
• Create opportunities and recognize achievement.
• Rewards – financial or otherwise
• Awards
• Simple acknowledgements
• Provide measurement & feedback
© 2015 Rehmann
Employee Retention Strategies
© 2015 Rehmann
Traditional Approach
Select Hire Advance and Promote
Evaluate Results
Develop
Retain Recruit
Transfer Knowledge
Manage Performance
Train
Compensate
Classify
jobs
© 2015 Rehmann
Integrated Approach
Program Evaluation
© 2015 Rehmann
Employee Motivators
© 2015 Rehmann
Employee Motivators
• Clearly defined short term goals
• Clearly defined long term opportunities
• Benefit package
• Flexibility
• Recognition
© 2015 Rehmann
New Hire Retention Summary
• Have a plan and measure the results on a regular basis.
• Be consistent, execute the plan on time.
• Talk and listen to New Hires, don’t assume that they are “getting it”.
• Evaluate what is working and eliminate what is not.
© 2015 Rehmann
© 2015 Rehmann
“In the Cloud” Efficiencies
• Who can benefit?
– Manual or multiple system users.
– Companies with multiple locations/multiple states/remote workforce
– Need data analytics to make real time decisions
– Those who need a scalable solution
– Desire to streamline, gain efficiencies and save time & money
© 2015 Rehmann
“In the Cloud” Efficiencies
• Features and Benefits
– Better manage your workforce while saving both time and money
– Real time data to run your business – make informed decisions
– Engage employees-provide information / communication
© 2015 Rehmann
“In the Cloud” Efficiencies
• Features and Benefits
– Reduction of paper processing by as much as 50%
– Become strategic versus reactive
– Measure labor costs by job and / or grant
– Track custom fields
– Point to point reporting in real time
© 2015 Rehmann
“In the Cloud” Efficiencies
• Features and Benefits
– Lower total cost of ownership over client-installed software - affordable
– Applications require fewer technical resources to support
– Greater data accessibility and security
– Single source accountability
© 2015 Rehmann
“In the Cloud” Efficiencies
• Must haves:
– Single sign on / single data base solution
– True SaaS technology – cloud computing
– Full suite of services – optional services
– Ability to send and receive data electronically to third party applications
– Support – dedicated?
– Implementation partner
© 2015 Rehmann
“In the Cloud” Efficiencies
• Expected outcomes:
– Robust real time reporting – compliance and decision making information
– Measurable efficiencies gained
– Cost reduction – hard dollar / soft dollar
– Better communication and organization
– Meet today’s and tomorrow’s challenges
© 2015 Rehmann
ACA Compliance
Group Benefits
© 2015 Rehmann
Uncertainty for Certain
• ACA Compliance
– Complex law – complex reporting
– Drain on resources and time
– The compliance challenge
– Pay or play?
– Moving target-what’s next?
© 2015 Rehmann
Uncertainty for Certain
• Current Group Benefit Plan Challenges
– Unstable renewal premiums
– Loss of control-Limited plans & options
– Lack of transparency
– Community rated –good supporting bad
– Cost shifting
– Remain competitive and relevant
© 2015 Rehmann
Bend the Trend
© 2015 Rehmann
Bend the Trend
• Group Benefit Plan Solutions
– Educate employees
– Engage employees – get “buy in”
– Consider “bolt on tools”
– Consider hybrid self funded plans
– Utilize ACA compliance tools
© 2015 Rehmann
Thank you!
© 2015 Rehmann
Q&A Session
© 2015 Rehmann
Thank you!
Kerry Nelson
Phone: 231.946.8927
Email: [email protected]
Jessica Dore
Phone: 989.797. 8391
Email: [email protected]
Lisa VanDeWeert
Phone: 616.975.2852
Email: [email protected]
Roger Webster
Phone: 248.579.1130
Email: [email protected]
© 2015 Rehmann
