The latest view on not-for-profit accounting issues

Best Practices for Not-for-Profit Organizations

“Best practices” can be a buzz phrase you hear a lot, especially when it comes to governance of a not-for-profit organization.  With the overload of information available to organizations, it’s easy to see why some view the task of incorporating best practices into their own activities as a bit daunting. The following are some “basics” …

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To Record or Not Record Donated Services

There are only certain situations when the value of donated services should be recorded in the financial statements as income.  One of those situations is when the services create or add value to a “non-financial asset”, such as when a building is constructed.  In that case, any donated services relating to that construction would be …

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Feed My Starving Children charity event

This past week our team members volunteered at Feed My Starving Children to package meals for malnourished children.  All volunteers combined prepared 60 boxes of food which consists of 2,160 bags. This equates to feeding approximately 35 children for an entire year! Feed My Starving Children’s approach is simple: children and adults hand-pack meals specifically …

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Overhead Myth – Regulating Administrative Expenses

I was surprised this morning when I opened my email and saw the news: Today, the CEOs of all three of the major charity watchdog groups (GuideStar, BBB Wise Giving Alliance, and Charity Navigator) published a letter “condemning the use of administrative expenses as a measure of nonprofit performance.” This is HUGE news for the …

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Why Your Not-for-Profit Organization Needs a Gift Acceptance Policy

When I suggest that a not-for-profit organization should consider adopting a gift acceptance policy, my words are often met with some degree of surprise.  Why would a not-for-profit soliciting contributions consider turning any contributions down?  Well, there are lots of reasons – but the most important one it that a gift acceptance policy can protect …

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More changes coming to form 990

The 990 is an annual informational reporting return that nearly all not-for-profit organizations must file with the IRS on an annual basis. It provides various information on the filing organization’s mission, programs, and finances. The 990 received a serious overhaul by the IRS a few years ago, and they’re still making changes to this day. …

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Top 12 Points to Avoid Endowment Confusion

Here are twelve points on how to avoid endowment confusion. These points are in no particular order. (1)  UPMIFA is a uniform law.  Each state has adopted their own version of this law (except for Pennsylvania).  See upmifa.org for more information. (2) If a permanent endowment goes underwater, the negative amount in unrestricted net assets is considered …

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How Can You Lose Tax Exempt Status? With EBT’s

Tax exempt entities can lose their tax exempt status with the IRS if they are involved in private inurement which applies to exemptions under 501c3, 4, 6 and 7.  It basically means that insiders can’t personally benefit in any way through the “use” of a tax exempt entity.  Funds can be received from a tax …

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Voided vs Canceled – What Type of Check is your Auditor Talking about?

My favorite response when I ask about canceled checks is “we don’t have very many of those” – especially when it is an organization that is large enough to merit a separate A/P clerk so they transact hundreds of checks a month. So, where’s the confusion coming from? They think I’m asking about voided checks, …

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