By Vicki Van Horn, CFP®
For six years, financial planners working through the New Mexico Project for Financial Literacy Inc. (NMPFL) have conducted more than 80 financial education classes for low-income residents. Class participants have entered asset-building programs through which they have purchased houses, expanded small businesses and pursued higher education.
One such class participant expanded her jewelry-making business and founded an artist's collaborative that offers micro lending to its members with funds courtesy of a CFP Board grant.
Another participant, a Native American single mom with a GED, graduated in May, magna cum laude, from the University of New Mexico, and will be entering Texas Tech's master's program in financial planning.
Doing Well By Doing Good
As executive director of the nonprofit NMPFL (www.nmpfl.org), I practice financial planning by teaching personal finance to adults. We identify financial literacy training needs and opportunities, locate collaborative partners, design and develop programs and staff our programs with instructors from the financial planning community. In addition to budget, debt and credit topics, our 20-hour classes teach all the subject areas of personal finance, including behavioral economics.
I also serve as pro bono director for the Financial Planning Association of New Mexico. Most of NMPFL's more than 30 statewide instructors are members of FPA of New Mexico.
Prospective instructors receive orientation on adult learning styles and facilitation techniques, and are provided with course materials and coaching support. In addition to the asset-building program, FPA members serve New Mexicans in financial distress by providing the budget and credit counseling and financial education required of bankruptcy filers. Another NMPFL education program involves workplace education, offered in collaboration with the New Mexico Securities Division, for New Mexico employers with defined contribution plans.
Over the years, I have met and spoken to many financial planners at meetings and conferences who have expressed a desire to undertake an effort like NMPFL. This process of "giving back" is extremely enriching. Many planners have told me that the work is fulfilling in so many ways, not the least of which is how engaging it is.
Establishing a Nonprofit
Establishing a nonprofit can be an exacting and sometimes exasperating process. Each year I meet hopefuls with a glimmer of a good idea who flounder, for example, on encountering the paperwork needed to obtain 501(c)(3) nonprofit status from the IRS.
Here are some of the tasks involved. Requirements will vary by state, and even city.
- Assemble a prospective board of directors willing to work with you, and draft your vision and mission statements.
- Get a federal tax ID number, an EIN. You may also need a state tax ID.
- Draft and file articles of incorporation and bylaws.
- File for 501(c)(3) status with the IRS. There is considerable backlog on this process, so don't expect a resolution in a few weeks.
- Create a hard or soft file of board documents, including procedures, bylaws and articles of incorporation, and minutes of board meetings.
- Find an accountant familiar with nonprofit financial reporting. You must file an annual 990 or 990-N with the IRS. Many prospective grantors require you to supply an audit. The more that you do from the beginning to keep orderly records, the easier this will be.
Along with drafting these initial documents and processes, you can begin to identify prospective funders and partners. Prospective funders may include wholesalers you know from your current career, banks and credit unions, United Way, the Foundation for Financial Planning, the CFP Board, your state's Securities Division and local community foundations. You may be able to fund programs through grants, donations or by fees paid by organizations seeking financial education.
Finding a Good Partner
At NMPFL, we have identified a cadre of powerful partners without whom we could not operate. Partners such as Community Action New Mexico, Central New Mexico Community College and the New Mexico Commission on the Status of Women provide physical facilities and clients eager for the content and support we provide.
Resilient partnerships will include organizations that "get" your organization's mission. A good partner immediately sees the worth and application of your contribution to their client population.
Working in the field of nonprofit financial planning has given me the six most rewarding years of my work life. I look forward to speaking with others who may have interest in making nonprofit financial planning a first or a second career.
Vicki Van Horn, CFP®, is founder and executive director of the New Mexico Project for Financial Literacy Inc. Contact her at firstname.lastname@example.org.