One of the challenges many not-for-profit organizations face is determining whether or not revenue falls under the category of a contribution or exchange transaction. In some cases, it’s a pretty straightforward determination, but the waters can occasionally become a bit murky. In June 2018, the Financial Accounting Standards Board (FASB) issued the Accounting Standards Update
The US Office of Management and Budget (OMB) released memorandum M-20-17 on March 19, Administrative Relief for Recipients and Applicants of Federal Financial Assistance Directly Impacted by the Novel Coronavirus (COVID-19) due to Loss of Operations. This memorandum is addressed to federal awarding agencies and instructs that the federal awarding agencies are authorized to take
Federal grantee procurement standards, as stipulated in the “Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards,” impose strict requirements on not-for-profits receiving federal funds. These standards have significantly altered nonprofit purchasing policy and documentation. After a lengthy grace period to allow more time for implementation, the requirements became effective in calendar year
At a recent boot camp for affordable housing accountants, we heard several leaders voice concerns and some optimism for the coming year of affordable housing development finance and legislation. In California and its biggest cities, there are several new laws put forth to support new construction and rehabilitation of affordable housing, but concerns over lack
National Day of Giving is a great opportunity for nonprofits and philanthropic organizations to procure donations before the end of the year. However, it has become a popular day on the calendar and many organizations like yours are looking to benefit from this day created just for them. For 2019, National Day of Giving, also
Not-for-profit organizations need to be continuously aware of what is required to maintain their tax exemption. Engaging in activities that affect this status can result in penalties called intermediate sanctions or the revocation of the organizations tax-exempt status. Here are a few areas that could put your not-for-profit’s tax-exemption status at risk: Earning Unrelated Business
Funding a not-for-profit is a big endeavor. Most organizations are familiar with the usual funding sources consisting of grants, donors, membership fees, crowdfunding sites, foundations, sponsorships and planned giving programs. What happens when you’re doing everything you can but you still need to generate additional revenue? This is when it’s time to look at some
When nonprofit organizations report certain government grants, revenue recognition standards can still be tricky. Although FASB has provided clarification, new accounting standards regarding revenue recognition from contracts (FASB ASC 605) have created more questions about how to categorize grants. Are they an exchange or a contribution? But first, let’s define the difference between an exchange
Automated giving programs are on the rise as a convenient way to boost monthly charitable nonprofit revenues. Sometimes called recurring givers, donors who choose this method can give the same amount at regular intervals, usually through credit card transfers or automated account deductions. Here are some strategies to create or increase monthly automated giving programs.
In an effort to make accounting less complicated and less costly for not-for-profit financial reporting, FASB recently announced a new standard that will extend two GAAP alternatives that were originally developed for private companies. The standard will make not-for-profits eligible for the private company alternatives on accounting for goodwill and accounting for identifiable intangible assets
Not-for-profit organizations (NPOs) that receive federal money in the form of loans or grants will probably need to update their written procurement policies to conform to the new federal requirements. Previously only applicable to state and local governments, NPOs that receive federal awards are now included in this requirement under the new Uniform Administrative Requirements,
State regulators in several states, including California, are bringing enforcement actions against not-for-profit organizations, citing “materially false statements” specific to joint cost allocations reporting and gifts in kind valuations. The rules underlying these accounting and financial statement reporting activities are highly technical and, if misstated and not closely reviewed during an independent audit, can lead
To what extent should donor-advised funds influence the mission and outcomes of not-for-profit organizations? This question is part of a larger debate about what some are calling “The New Gilded Era” of philanthropy: although levels of giving are way up, the gap between rich and poor is expanding. In a recent article in The New
How efficient is your not-for-profit? Even tightly run organizations can use some improvement — particularly in the accounting area. Adopting the following six tips can help improve timeliness and accuracy. Set cutoff policies. Create policies for the monthly cutoff of invoicing and recording expenses — and adhere to them. For example, require all invoices to
Public perception that overhead for nonprofits is “bad” has been a pervasive problem for decades (made worse by national ratings agencies), primarily based on public attitudes that nonprofit leaders should be paid less than their corporate counterparts because they chose to work in public service roles. The common attitude is that these leaders were drawn
We know it isn’t easy to crack the code of funding best practices when working with private foundations. But a recent survey of 51 foundation trustees, foundation staff and grantee representatives — all of whom were recruited independently from 13 states in the U.S. — has helped to shed some light on what these highly
Not every exiting nonprofit leader may need or require an exit agreement. However, not-for-profit boards should understand four common types of CEO exit plans to negotiate an exit agreement if needed — ideally far ahead of the leader’s actual exit to support nonprofit operations. The use of exit agreements occurs most often in four
Donor-based not-for-profit organizations have a short window to comment on a recent amendment being considered by the United States Postal Service (USPS) that could greatly impact their postage budget. The proposal would limit all USPS Marketing Mail, regular or not-for-profit, letter-sized or flat-sized; to content that is only paper-based/printed matter. No merchandise or goods of
By Cathy Hwang, CPA By now, all organizational recipients of federal funds or grant awards should have familiarized themselves with changes to the Uniform Guidance, issued at the end of 2014 through the Office of Management and Budget (OMB). The grace period for enhanced procurement compliance has ended, and affected organizations need to ensure that
Licensing your not-for-profit’s name to a for-profit company can provide a valuable new revenue source — but it can also be risky. If you’re considering a licensing arrangement, ensure that the partnership really will generate funds and, possibly more important, a positive impression of your brand. Success . . . and controversy When licensing arrangements
A not-for-profit’s growth stage generally starts two or three years after formation and continues until maturity at around age 7. This period comes with a sense of accomplishment and the opportunity to refine and expand, but these “adolescent” years can pose challenges as well. Board shifts Perhaps the most common marker of a growth-stage nonprofit
All nonprofits should think about setting aside money for a rainy day, but it’s a bigger consideration when you do it through an endowment. Endowments, by their nature, are not usually collected for the purpose of spending the money. The definition of an endowment, is the portion of funds set aside that are “permanently restricted”
The amount of money your not-for-profit raises in fundraising campaigns is meaningful, but so is how efficiently you’re able to raise it. Such costs can be measured using two metrics: Cost ratio and return on investment (ROI). Let’s take a look. Find a formula These two metrics can be used to evaluate both fundraising activities
Attracting quality employees is a tough challenge. And despite assumptions, money is not a motivating factor for employees, especially if other aspects of their job are unsatisfying or even toxic. With sufficient pay and benefits as a baseline, employees actively select workplaces for more personal reasons. They will also stay longer when those personal needs
A recent survey of almost 1,500 donors from all generations found that only 9 percent factored direct mail into their decision to support a charity. The Chronicle of Philanthropy reported in April that all of the donors surveyed had made a gift to a charity that they hadn’t previously supported. They were asked about how
The relatively new federal procurement standards significantly alter the way not-for-profits receiving federal funding handle purchasing. And while your organization may have changed its written policies to comply with the revised standards, it may be easier to follow the rules on paper than in practice. Summing up the standards The standards, “Uniform Administrative Requirements,
Chances are, your not-for-profit is governed by a board of directors. However, an informal advisory board can bring complementary — and valuable — skills and resources to this group. Enhance representation Look at the demographics and collective profile of your board members. Does it lack representation from certain groups — particularly relative to the communities
We’ve seen a lot of optimism across industries in the last year thanks to huge U.S. stock market gains and expectations for lower corporate tax rates and infrastructure spending. But is this party winding down? Now that some major tech stocks have stumbled and federal interest rates were raised once again, the stock market looks
Thousands of not-for-profits lose their tax-exempt status every year because they’ve neglected to file required annual forms with the IRS for three consecutive years. Fortunately, if your organization is on the revocation list, you can re-attain your exempt status by following the proper steps. File the right form Assuming you lost your exempt status due
By doubling the standard deduction for the 2018 tax year and going forward, the law known as the Tax Cuts and Jobs Act of 2017 may potentially reduce the number of U.S. taxpayers itemizing deductions by 25%. That means no specific deduction for charitable giving except among about 5% of the U.S. population. Nonprofits worry
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