Archive for the ‘Not For Profit’ Category
The 990 provides not-for-profit organizations with a tremendous opportunity to tell their story as the form is required to be made available to the public. While many organizations make the form available on their website, GuideStar.org publishes the last three years of the form for most organizations. Taking the time to properly understand the form’s requirements and pending changes can help your organization present itself favorably and accurately and avoid some of those tax reporting headaches down the road.
With the start of March comes a change in time, warmer weather (hopefully!), and the time of year to do some spring cleaning. Annually in the state of Indiana, most business entities, including non-profits, are required to file personal property tax returns as of March 1st. This is also a good time of year to make sure you have a handle on your organization’s property.
by Heather Phillips, CPA | Manager, Not-for-Profit Services Group
When the real estate bubble burst after decades of inflation, many home-owners saw their property decline in value. Some decided to “stay the course” hoping to see prices start to go back up, while others had to sell – sometimes suffering a hefty loss. The commercial real estate market has experienced similar trends. According to the real estate website Trulia, the housing market is 32% back to “normal” through July 2012 (“normal” being “the rough estimate of the long-term pre-bubble average”).
by Amanda Meko, CPA | Partner, Director of Audit & Other Assurance Services and Team Leader of the Not-for-Profit Services Group
What type of research do you perform before making a significant purchase? You may compare the product you’re considering with similar products online to evaluate price and features. You likely will read reviews of other individuals who purchased the products. You may even seek out the opinion of a friend or family member. Your donors may also be performing similar research on your organization before choosing to give. Most organizations have invested in a website, but may not have considered other web resources that donors are using to research prospective charities. The following highlights some of those resources and how you can maximize them.
by Jennifer McVey, CPA | Manager, NFP Services Group and Amanda Meko, CPA | Partner and Team Leader of the NFP Services Group
In a downturned economy, in which donations to nonprofits are difficult for both individuals and organizations to make, being accountable carries more weight than ever. A nonprofit must not only conduct business ethically and transparently but also be able to publicly explain at all times the way it handles its finances and governance. Your nonprofit can meet this challenge if you understand the key areas of accountability and your board’s role.
by Heather Phillips, CPA and Amanda Meko, CPA | Team Members of the Not for Profit Services Group
Does your not-for-profit receive funding from the State of Indiana? If so, are you aware of your annual filing requirement with the State for these funds?
Nongovernmental organizations receiving financial assistance from governmental sources in the form of grants, contracts, subsidies, contributions, reimbursements, or loans are required by Indiana Code (IC 5-11-1-4) to file an Entity Annual Report (Form E-1) with the Indiana State Board of Accounts. This is a separate filing from the Secretary of State’s Business Entity Report, which is annually sent to the Secretary of State’s office with a filing fee of $10. A link to the Form E-1 can be found at http://www.in.gov/sboa/3104.htm.
The Entity Annual Report must be completed and submitted to the State Board of Accounts within 60 days of year-end. The State Board of Accounts uses the information reported on the E-1 to determine the state audit and reporting requirements placed on an organization by Indiana Code 5-11-1-9. Shortly after the E-1 is filed, an organization will be notified if a state audit is required or if the organization qualifies for a waiver from a state audit. An organization may be asked to supply additional financial information before a final waiver determination made via letter is granted.
An organization should report as “governmental funds” on the E-1 all cash received from any state or local government. These funds may be direct awards of state and local monies or they may include federal funds that are “passed-through” state or local agencies. Direct federal financial assistance should not be reported on the E-1. Also, non-federal funding arrangements that are considered “purchase of service” agreements should not be reported on the E-1. “Purchase of service” agreements, or vendor-type contracts, are those were an organization is being reimbursed on a “per diem” or “per unit” rate for services provided by the organization. It is important to distinguish “per diem” and “per unit” reimbursement-type agreements from those where a government unit contracts with an organization to provide services for a flat fee or contract amount. These latter agreements are not considered “purchase of service” agreements and should be included on the E-1.
While the E-1 is not an overly long or complex form to complete, many organizations – particularly small not-for-profits or those receiving government funding for the first time – neglect to file this report. Failure to timely file this form may threaten future government financial assistance that is important to an organization. If you have a question about the form or your organization’s need to file, please contact us. We’d be happy to help you “fall” into place with this state requirement!
Sponsorships can be mutually beneficial to both the organization and its sponsor. The organization gets funding for its event while the sponsor can use the event as a platform to gain more public exposure. The sponsor can have its name, logo, website address or telephone number prominently displayed at the event and even can sell its products at the event (as long as sales are not conducted by the organization itself).
The written sponsorship agreement sets the terms of payment and the obligations the organization has to fulfill in recognizing the sponsor. If the terms satisfy the IRS rules for Qualifying Sponsorship Payments (QPS) then none of the revenue generated will be considered Unrelated Business Taxable Income (UBTI).An organization, however, must carefully consider what it is promising to perform in the sponsorship agreement as the line between QSP and UBTI can be blurry.
On June 8, 2011 the IRS announced that approximately 275,000 organizations automatically lost their tax-exempt status because they failed to file an annual return or an electronic notice (Form 990-N e-postcard) for 2007, 2008, and 2009.
by Amanda Meko, CPA | Partner, Director of the Audit & Other Assurance Services Group | Team Leader of the NFP Services Group
Many organizations don’t consider their fundraising programs large enough to need a gift acceptance policy. However, even if your charity has not received an unusual gift offer yet, it is probably just a matter of time. Rejecting gifts can be awkward, particularly when there is no structured policy to follow. Having a gift acceptance policy can help guide you in a meaningful donor discussion, one that results in a gift that is beneficial to both your organization and the donor.
Nonprofits often ask their advisors how to look at an operating reserve: Is it cash set aside for a rainy day? Is it the same as an organization’s net worth? How much is too little — or too much? Nonprofits often ask their advisors how to look at an operating reserve: Is it cash set aside for a rainy day? Is it the same as an organization’s net worth? How much is too little — or too much