CPAs and Advisors with Your Growth in Mind

Study Cautions Nonprofits on Barriers to Growth

If you’re a nonprofit seeking future growth, a new study has identified several issues that your organization must consider. According to the Abila Nonprofit Finance Study, nonprofits should factor in potential difficulties dealing with personnel and risk management, an increased burden on administrative duties, and compliance matters. Of course, nonprofits, such as Make A Stand, that did not prepare for these issues fell short in their organizational growth efforts. More on the Abila Nonprofit Finance Study is available on the Nonprofit Quarterly website.

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Gift Acceptance Policy Tips for Nonprofits

In a recent blog on the American Institute of Certified Public Accountants’ (“AICPA”) website, Foundation of the Carolinas Vice President Alyssa Federico shares her insights on developing a gift acceptance policy for a nonprofit organization. According to Federico, a well-developed policy can protect a nonprofit from potential risks and educate staff members on when to decline gifts. Some of the guidance Federico outlines concerns handling non-cash gifts, the process for deciding whether or not to accept a gift, and determining what is required prior to acceptance. Federico’s blog can be read in its entirety on the AICPA website.

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Forthcoming Revenue Standard Proposal to Help Nonprofits

New Financial Accounting Standards Board (“FASB”) guidance could make it easier for nonprofits to record revenue from grants and donations with restrictions. On June 7, the FASB unanimously agreed on a proposal to help nonprofits differentiate between a condition and a restriction in U.S. GAAP for received grants and donations. Accounting Standards Update No. 2014-09, Revenue From Contracts With Customers (Topic 606) removed guidance on “exchange” transactions. Furthermore, many nonprofit organizations have had trouble distinguishing between a condition and restrictions. To address the matter, the FASB will clarify that when a gift comes with a donor-imposed condition, the agreement must. Read More.

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Mishandled Paperwork Impacting New York City Nonprofits

A regulation permitting New York City to sell liens on unpaid property taxes and water bills may not sound like an issue for nonprofits, but a conflicting law is complicating matters for 324 of the city’s organizations. In 2011, a regulation was introduced requiring all nonprofit organizations to refile annually for property tax exemptions. Paperwork issues, however, have caused some nonprofits to be added to the New York City of Department’s list of tax lien sales. Fordham Law students are working with nonprofit administrators to identify and remove the impacted nonprofits from the list. More on the paperwork problems of New York City nonprofits is available on the Nonprofit Quarterly website.

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Executive Order Ends Enforcement of Johnson Amendment

President Trump has signed an Executive Order directing the Internal Revenue Service not to enforce the Johnson Amendment. Announced last week, the Executive Order ensures that tax-exempt organizations will not be penalized for engaging in certain political activities. The Johnson Amendment was introduced in 1954 to discourage tax-exempt organizations from participating in political activity.

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North Carolina Passes Government-Nonprofits Contracting Reform

Earlier this month, the North Carolina House of Representatives approved a regulatory reform bill that would allow the Joint Legislative Program Evaluation Division to review the obstacles nonprofits face when providing services in accordance with state grants and contracts. The review is the result of research indicating that half of North Carolina nonprofit organizations with government grants and contracts receive late payments from government agencies. That same research also revealed that three-fourths of those nonprofits deal with unnecessary application and reporting requirements.

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