Does a successful nonprofit organization benefit from forming a separate organization (usually an Auxiliary or Foundation) to focus on the important tasks of community outreach, fund raising, and public/donor relations? You’ve probably noticed some tax exempt organizations, including colleges, hospitals, and even museums, have a completely separate organization that focuses solely on those outside functions and not the mission of …
Foreign Operations for a Domestic Nonprofit
I’m sometimes asked if it’s legal for a domestic (US based) nonprofit organization (NPO) to conduct business and operations in a foreign county. The short answer is yes. That said, like most items relating to compliance and nonprofits, there are exceptions along with several important concepts and issues that need to be kept in mind. Read on to find out …
Fiscal or Calendar Year end, what’s the Difference and why should I Care?
Organizations define a 12-month period on which they will consistently report financial statements and tax and other information returns to various federal and state regulatory agencies including the IRS and Department of Revenue. A calendar year is January 1 through December 31. A fiscal year is some other 12-month period. Any combination will do as long as it’s a full …
Why maintain an Asset List and what is Capitalization anyway?
It’s true that a nonprofit organization’s (NPO) tax exempt status usually means there are no tax consequences to expensing or capitalizing new purchases. But it’s important to track major assets and know when to expense or capitalize. When a new item (furniture, equipment, buildings, etc) is purchased the NPO must either expense the item in the current period/year or capitalize …
Don’t forget to file form 8282 if donated property is later sold!
Many non profit exempt organizations receive donated items of property from generous donors. It may be a piano, car, artwork, or other items valued at more than $500. if these items are later disposed of for consideration (sold for money), IRS form 8282 may be required. This form is used by the IRS to better track donated items in which …
FASB Financial Statement Project
The new standards from the Financial Accounting Standards Board (FASB) will go into effect for annual financial statements issued for fiscal years beginning after Dec. 15, 2017, and for interim periods within fiscal years beginning after Dec. 15, 2018. It’s a good idea to plan now to ensure transactions are recorded correctly starting with the new year. The new standards …
Raising Funds and Distinguishing between Program Service Revenue and Unrelated Business Income
As you consider new and additional ways to fulfill your exempt purpose mission and raise funds for your nonprofit, you may have the opportunity to engage in an activity that is an exchange transaction and generates revenue (think store that sells product or service). If the activity is considered a Program Service, the revenue generated is exempt from income tax. …
Best Practices for Successful Non Profits
As a nonprofit organization moves past the startup phase, cash flow begins to stabilize and Net Assets continue to grow, it’s important to keep an eye toward the future. Click Here to learn of some standard tools that can help guide a successfully maturing nonprofit organization. Financial Policies and Procedures (Internal Controls) As organizations grow and the number and volume …
Foreign Qualification (conducting nonprofit business outside of your home state)
Qualification Process – to do business in state which is outside of incorporated state. 1. State level certificate of authority form. Usually filed with Secretary of State office. a. The form usually requires the basic info of the nonprofit entity – name, address, directors and officer names, purpose/mission, and certificate of good standing from home state. b. Filing fee usually …
Governance Considerations for Mid Size and Maturing Nonprofits
As a nonprofit organization moves past the startup phase, cash flow begins to stabilize and Net Assets continue to grow, it’s important to keep an eye toward the future. Read on to learn of some standard tools that can help guide a successfully maturing nonprofit organization. Even if your organization already has a loyal donor base and enjoys successful fundraisers, Endowment …
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