You will also need to decide on either cash or what is known as “accrual” accounting. Cash accounting is accounting for transactions at the time payments are made or received. For many small organizations this will be perfectly adequate. However, because there is often a disconnect between when a transaction occurs and when payment is received or made, accrual accounting allows organizations to account for transactions when they are made, rather than when payment takes place.
The primary advantages of accrual accounting are, that it:
Makes the relationship between revenue and expenses clearer
Creates a more accurate picture of an organization’s assets and liabilities
Makes audits possible
Helps with budget preparation and long-term planning
The primary disadvantage of accrual accounting is that it can provide an inaccurate picture of cash on hand. Accrual accounting is required of larger organizations, who are expected to have their books audited annually by an outside firm.
The two primary tools that harm reduction leaders reported using the most to track their transactions (money received and money spent) were the Excel spreadsheet and Intel’s Quickbooks.
Organizations are, of course, free to use whatever accounting system they would like, but they should always check with a professional familiar with their type of nonprofit to make sure they are in compliance with all legal requirements. If receiving federal or state funds, programs should check with project finance and compliance officers to make sure they are operating in compliance.
One of the first fiscal decisions organizations make is to define their fiscal year. A fiscal year is the one-year period after which an organization must close their books and file taxes.
Though many choose to use a normal calendar year (January 1 to December 31), the law only requires that it be a one-year period. Many SSPs’ “fiscal years” run on a different schedule, with July 1 to June 30 being the most common alternative. Fiscal years might also be different based on grants and subawards received, so it is good to consider your organizational funding streams when determining your fiscal year.
Though most SSPs are exempt from paying taxes, they are still required to file.
For federal taxes, SSPs with gross receipts under $50,000 must file a simple postcard. States also exempt nonprofit organizations from income tax, but still require nonprofits to file.
For organizations with gross receipts over $50k to $200k, this means either filing tax form 990EZ themselves or hiring a professional. Organizations with budgets in excess of $200k must file form 990. Please see section 6- “SSP Basic Fiscal Structure and Process Hacks”, for more information on choosing financial professionals.
Though SSPs are exempt from federal and state income tax, they may still be subject to payroll, property, and sales taxes and should be sure to talk to an attorney, an accountant, enrolled agent, or other licensed tax professional about their individual situation.
Many SSPs operate on a shoestring budget; still, it is important to have several types of insurance. Insurance protects your organization, and some funding sources require proof of insurance. Types of insurance include:
Liability insurance – coverage to help protect your organization if someone files a lawsuit or claim against you.
Board insurance – protects your board officers in the event the organization gets sued or audited by the IRS.
Vehicular insurance – for outreach vehicles owned by the organization.
Property insurance – owner’s or renter’s insurance for property owned or rented by the organization.
Health insurance- if your organization has employees it is essential to offer health insurance. And to insist that your plan provides robust coverage for behavioral health services including substance use coverage that includes medication assisted treatment.
Finding a broker can sometimes be difficult for SSPs – especially for general liability insurance because the work that SSPs do isn’t always completely clear to insurers. For this reason it is a good idea to:
Consult the Hacks file of vendors for a broker familiar with harm reduction.
Talk to other people in harm reduction about who they are insured by.
Call independent insurance brokers in your area to help find the right policies.
Non-profit employees are subject to all the same state and federal rights and responsibilities as other employees including regulations about:
Wages and hours
Workplace safety and health
Collective organizing and bargaining
Worker’s compensation and benefits
Employee information posting
One of the biggest tips that leaders mentioned is to hire a payroll service to help take care of necessary taxes and employee filings. There are links in the resource section to several businesses that will help employers stay in compliance with state and federal laws for a small monthly fee. For more information on workforce development in harm reduction please see section 12 “Workforce Development Hacks for SSPs“.
The IRS is generous about what is considered a “charitable or educational organization” for 501(c)3 status, so most organizations not designed to generate profit for the founders or officers are eligible.
To get non-profit status, an organization must follow a series of steps and file paperwork with both their state tax authority and the Internal Revenue Service, including articles of incorporation and bylaws. If they also want to be exempt from sales tax, they must file paperwork with their local tax authority. Please contact your state tax assessor’s office for more information on this process because requirements vary.
There are many places to get help and guidance through this process. Please see the resource section for more information.
Though it is possible to complete the process of becoming a non-profit on your own, many lawyers will help for free as a part of their pro bono (free work) portfolio.
To find a local attorney to help with your filing:
Check your circle first! Do you, or anyone in your ally circle, know lawyers or people who know lawyers? People you know, even peripherally, are always more eager to help.
Ask other harm reduction organizations if they know anyone.
Ask SSP technical assistance organizations if they know anyone.
Ask your funders if they know anyone.
Look for local attorneys who you feel might be sympathetic because of the work they do.
Large firms often have attorneys or even departments dedicated to probono work. It is worth calling the five largest law firms in your area to ask for help. Even if they can’t help, they will be well-connected and might be able to suggest someone else for you to contact.
Your city, county, state, local law schools, or state bar association may have a help center, lawyer referral service, or other resources.
Under IRS regulations, nonprofit organizations are barred from advocating for a specific candidate or political party. However, nonprofits are not barred from participating in non-partisan political activities, such as hosting voter drives or candidate debates, or from lobbying for, or against, specific policies that might impact their work and/or the people or causes they serve.
There is no absolute rule about how much time or money can be allocated by an organization for advocacy. The statute governing this merely says that a 501(c)3 cannot spend “substantial” time on lobbying activities aimed at particular causes that intersect with the organization’s charitable or educational mission. The general rule used by many accounting and IRS professionals is based on a court case that held that more than 20% of a nonprofit’s time and money is “substantial with regard to lobbying for causes that intersect with its mission, therefore anything up to 20% is acceptable.
This advocacy is sometimes called “upstream advocacy”. It calls on elected representatives and other government entities to address things getting in the way of an organization’s core activities. There are many guides to effective advocacy if you want to learn more such as this one from the Urban Institute.
Here are some basic hacks from harm reduction leaders:
Get to know your political landscape – look at the history, voting records, and other decision making from a variety of levels:
city and county legislature
county health dept and/or health jurisdiction
Attend public meetings – attend public legislative sessions and meetings to see how they work.
Understand the process – get to know the voting and legislative process, including the committee process and who serves on committees of interest to your organization.
Engage your internal community – engage and mobilize your internal community members when there are key opportunities for advocacy such as votes or lobbying days.
Get community members or board members to do it – engage trusted volunteers or board members to work exclusively in advocacy.
Develop a community relations officer – engage trusted volunteers or board members to be community relations officers.
Build your brand – use social and other media to build your credibility and your brand.
Find common ground – look for common ground with anyone, even those you might otherwise disagree vehemently with.
Have stories – remember that emotional resonance is key to changing opinions and build an arsenal of relevant personal stories from participants and other stakeholders to illustrate your points.
Get to know your officials – get to know key officials, their interests, voting records, committee memberships, etc. This will help you build rapport and identify potential allies.
Get to know staff – get to know the staff of key decision-makers, they can give you access to the officials you need to reach.
Participate in community meetings that impact your participants – these can include committees or public meetings, such as HIV planning councils, that might help your participants.
Build coalitions – identify potential allies and partners and build coalitions for credibility, shared resources, and strength in numbers.
Center your participants when possible – provide opportunities for your best advocates, your participants, to speak on their own behalf.
Be polite to everyone – it is important to be kind and polite to everyone you encounter in order to build credibility.
Be honest and authentic – never lie, obfuscate, or overstate your case.
Be brief – legislators and other decision-makers are very busy, so be as succinct as possible.
Be timely – always treat legislators’ time as precious and make sure that you are timely in your communications and your interactions.
Know your facts – always be clear about your facts. Legislators are often counting on community advocates to inform them about facts and your credibility depends on being accurate.
Dismiss no one – remain cordial and dismiss no one you encounter in the legislative process. Someone who can be a challenging enemy today could be an ally tomorrow.
Follow up – always follow up when you say that you will and after each encounter with anyone in the legislative process. This reminds them of you, your organization, and your cause.
Your external community is made up of the larger spheres of influence your organization is a part of. Your external community includes your local home community (city, county, and/or health jurisdiction, and state), the other social service organizations in your home community, various professional communities (including medicine, public and behavioral health, housing etc.), and the larger national harm reduction, drug policy reform, sex worker rights, and other related movements.
Best Practices for External Community Building
Most of the best practices for building internal community, such as being transparent and accountable, are equally true for building your external community, but there are some specific skills for building external community. These include:
Map your community – starting from the central location where you provide services, make a map of each block in the surrounding area. Look for community assets (schools, churches, stores, community organizations, clinics, parks, etc.), places where there might be potential participants, and issues you or your participants may encounter.
Offer tours or open houses – offer regular tours to community members. This helps with transparency and builds community trust while demystifying SSP services. Many organizations choose to do this during a time when they are not providing regular services in order to protect participant confidentiality.
Practice public speaking – find community groups like Toastmasters or other ways to practice public speaking and provide those same opportunities to the leaders you cultivate.
Build a presence on social and other media – make sure your organization has a social media presence and, where useful, have one in the regular media as well.
Create the position of community relations liaison – have someone at your organization ready to act as a spokesperson if a reporter approaches you for comment on current events impacting your clients, and make sure local journalists know that person is available, along with contact information.
Have regular events – holding regular events to celebrate successes, get to know constituents, and raise funds help build your organization’s public profile and external community.
Keep good notes – many organizations, especially those in communities more hostile to SSPs, make it a practice to keep notes about both allies in the community and people or organizations that are challenging. These notes are invaluable for keeping a clear idea of allies who can be counted on in the larger community and can offer insights into how to avoid or resolve challenges.
Be compassionate with everyone – it’s essential that harm reduction organizations extend compassion to everyone they come in contact with, in order to build community trust – even those they may have a knee-jerk negative response to.
Be positive – people are more attracted to organizations that are positive and uplifting, so try to build a positive message into everything that you do.
Look for organizations and coalitions with aligned values – seek out organizations and coalitions with values that are similar to yours when building alliances or partnerships.
Participate in professional and national organizations – participate in professional organizations to get ideas, access to resources, to build alliances, and to build credibility.
The hacks on this site are shared with you under a Creative Commons Attribution-ShareAlike 4.0 International licence. This allows you (with attribution) to adapt content for your own use, although we do ask you to then also allow others to have equal access to anything you develop. More details of this licence can be found on the Creative Commons website.
We do not claim that this is an exhaustive set of strategies, shortcuts, or tips for running an SSP. What we do suggest is that Harm Reduction Hacks offers down-to-earth, practical information for being a better leader, starting and running an SSP, and providing syringe access services. We feel we can say this with confidence because the Hacks are based on interviews with, and the experiences of, literally generations of people who have been doing harm reduction work.
Please note that nothing in this guide should be construed as legal advice. Please consult an attorney local to your area to ensure your program is in compliance with all local, state and federal regulations that apply to your situation.