Fundraising Costs in Nonprofit Entities

I recently read an article at www.abc15.com (Arizona news station) about how more than 250 Arizona nonprofits, who received more than $1 million in a recent Form 990 filing, reported that they did not spend anything on fundraising expenses in raising those funds.  In general, you would expect that if an entity generates contribution income, …

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Social Welfare or Social Club?

I recently assisted a client with completing a Form 1023 to apply for tax exemption with the IRS for a newly form nonprofit entity.  As part of this process, questions came up about whether the organization was a social welfare entity or more like a social club.  The main difference between the two is that …

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Are You Using Social Media To Achieve Your Marketing Goals? Part II

Now you have your marketing plan in place and some do’s and don’ts you are ready to get your accounts set up based on your target audience.  If you have defined LinkedIn, Twitter, Facebook and blogging as good social media tools for your organization read on to learn about some great resources for you to …

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Are You Using Social Media To Achieve Your Marketing Goals? Part I

I recently gave a presentation at our monthly lunch ‘n learns about using social media in not-for-profit organizations.  If you are not using social media I strongly encourage you to look into it.  Social media is very affordable (as it is mostly free), easy way to connect with your supporters, great way to maintain relationships …

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A Look into the Importance of Budgets for Governments and Not-for-Profits

Government and not-for-profit budgets are far more important than those for businesses because they are expressions of public policy and often carry the authority of law, preventing public officials from spending outside their budgetary authority.  The increased importance of budgets is reflected in government financial reports by a required report comparing budgeted and actual amounts. …

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The differences between GAAP, cash basis and modified cash basis of accounting

Generally Accepted Accounting Principles in the U.S. (GAAP) are just that – generally accepted. However, it’s not the only choice of accounting basis available to nonprofit and government organizations, and many organizations select another basis of accounting. There could be many reasons for presenting a different basis, one being that it may be more in …

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Not-for-Profit Automobiles

Completion of year end payroll tax returns, including preparation of Forms W-2, is just around the corner.  The taxability of employer provided automobiles must be taken into consideration when computing taxable wages of an employee. Not-for-profit Organizations often have a vehicle available for employees or have vehicles that are normally used for charitable activities.  The …

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Is Your Club or Association a Tax Exempt Entity? Part II

In my last blog post, I talked about a threshold level for the requirement of a tax exempt entity to file Form 1023, (Application for Recognition of Exemption under Section 501(c)(3)).  Here is some additional information about small social clubs and filing requirements. As you may recall from some of our previous blogs, the Form …

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Independent Contractors – Who Should Be Reported on Form 990?

Part 7, Section B of the Form 990 asks you to list the organization’s five highest compensated independent contractors.  It sounds simple enough, but here are some questions that might come up: What do they mean exactly by independent contractors? Independent contractors provide SERVICES, not merchandise or goods. Would this only include those that the …

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Violations of Loan Covenants – What Does this Mean for my Audit?

It these tough economic times, it is much more common for not-for-profit organizations to have a violation of their loan covenant.  When a loan covenant is not met (for example, a requirement to maintain a maximum debt to tangible net worth ratio), the consequences can be very negative to the entity’s financial statements.  Remember that …

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