I was recently reading an article in the September issue of the Journal of Accountancy that highlighted tips for good not-for-profit governance that were presented at this year’s AICPA Not-for-profit Industry Conference. It was such a concise, solid list that I thought I’d share it with our blog readers: 1. State the organization’s values in a …
Here are ten important things to know when you have a political organization (PAC): (1) The IRS requires that a PAC have its own taxpayer ID # which can easily be obtained at the IRS website by completing form SS-4. (2) When a political organization is first formed, it must give notice electronically to the IRS that …
Expenses are reported in two different ways on the 990 return: by their natural classification (salaries, depreciation, travel, etc.) and by their functional classification (program, administrative, fundraising). Correct functional allocation of expenses is important because some donors may scrutinize the percentage of program costs vs. administrative and fundraising costs while making a decision to donate …
Conflict of Interest policies for board members are a much needed piece for any not-for-profit organization. A conflict of interest policy will help board members recognize when their activities are related party transactions and should have different treatment. These treatments include processes for decision making and disclosures to the financial statements. When a board member …
“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” …
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 …
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 …
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 …
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 …
Beginning with the Single Audit Act Amendments of 1996, the Office of Management and Budget (OMB) took a leading role in single audits. Single audits are required of any organization who expends more than $500,000 in federal assistance during the year. In June 2007 the President’s Council on Integrity & Efficiency (PCIE) issued a report …