Exchange transaction or contribution?

When your organization receives a grant, determining if it is a contribution or an exchange transaction can be very difficult. Even after reading the rules, it may still require some judgement. Deciding between the two will determine how the grant will be recorded and when the revenue will be recognized. If the wrong one is …

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IRS releases 2017 retirement plan limits

On October 27, 2016, the Internal Revenue Service (“IRS”) announced the cost-of-living adjustments (“COLA”) for the 2017 tax year. These COLA rates are used to adjust over 40 tax provisions from the standard deduction and personal exemption to retirement plan limits. Based on changes in the consumer price index, used by the IRS to determine …

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Everything You Need to Know: Gifts In-Kind

Nonprofit organizations collect many different types of support from donors, which are not always cash gifts. When an organization receives gifts of goods or services, it may lead to questions. How and when do gifts in-kind get recorded? What are gifts in-kind? Gifts in-kind are donations of tangible and intangible individual property and contributions of …

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What Your Schedule A Says About You

Does your organization check all the right boxes? For Schedule A, that is. Schedule A is a crucial piece of the 990 for nonprofits as it calculates whether they truly qualify as a publicly supported organization or not. Generally, to be considered a publicly supported organization, the nonprofit must have support of at least 33 …

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Heads Up on Form 1099-MISC

Please note the new filing date for Form 1099-MISC, per the IRS: Public Law 114-113, Division Q, Section 201, requires Form 1099-MISC to be filed on or before January 31, 2017 (compared to February 28th in the prior year), when you are reporting nonemployee compensation payments in Box 7. Otherwise, file by February 28, 2017, …

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2016 Annual Giving USA Report Released

The Giving USA Foundation (a public service initiative of The Giving Institute) has released their 2016 annual Giving USA Report on Philanthropy in collaboration with The Indiana University Lilly Family School of Philanthropy. Using data from calendar year 2015, the Giving USA report compiles and analyzes data on charitable giving in the U.S in order …

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Charity Navigator Launches CN 2.1

On June 1, Charity Navigator announced the launch of CN 2.1, an enhancement of their previous charity rating system CN 2.0. This includes several changes to the seven “Financial Health” rating metrics used to evaluate charities, and to help donors make wise decisions in choosing where to make their donations. Here are the primary changes …

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What Percent Should Charities Spend on Their Mission?

Ever heard the cliché “comparing an apple to an orange”? I’m not a scientist and I don’t know the cellular differences of both, but I do know that oranges are acidic with a thick peel usually removed prior to consumption. Apple, on the other hand, is a brand of electronics most commonly seen in the …

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Ethical Fundraising Practices

Recently, I overheard two individuals discussing ethical fundraising practices for their small nonprofit organization over lunch. As an auditor specializing in non-profit, you can imagine how quickly this caught my attention. I was grateful for the noise of the restaurant and the influx of customers as I scooted my chair a little bit closer to …

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Donated Services

Volunteer time (or donated services) is only recorded as revenue and expense in the financial statements if the services create or add value to a non-financial asset (such as construction services provided to a building) or if the services meet all of the following three criteria: The services require specialized skills The services are provided …

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