See all our questions answered on Reddit: https://www.reddit.com/user/JV_CPA/
Members of the non profit voting?
r/nonprofit iconr/nonprofit
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2 days ago
Members of the non profit voting?
JV_CPA JV_CPA avatarJV_CPA
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22 hr. ago
Sure...
It should be "some specific decisions" need membership approval/authorization etc.
It would be hard to believe the organization is not going to authorized managers of some sort.
How are they going to sign checks? Get one of those Giant checks? 😅
JV |🗝️ ◕△◕ 🗝️|
1 vote
1 vote · 7 comments
990: Overlap of Program Service Revenue and Unrelated Business Income
r/nonprofit iconr/nonprofit
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5 mo. ago
990: Overlap of Program Service Revenue and Unrelated Business Income
JV_CPA JV_CPA avatarJV_CPA
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2 days ago
Good question..
If you are a 501(C)(3) charitable organization - I don't know cases where Part VIII line 2 Program Service Revenue - would also be in column (c) Unrelated Business revenue. There are cases for this in other 501(C)X orgs like social clubs, fraternal organizations or business leagues etc..
A 501(C)(3) will report unrelated Business activities somewhere on lines 6-11
JV |🗝️ ◕△◕ 🗝️|
1 vote
1 vote · 5 comments
Restricted Donations
r/nonprofit iconr/nonprofit
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3 days ago
Restricted Donations
JV_CPA JV_CPA avatarJV_CPA
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2 days ago
* Temp restricted net assets & perm restricted net assets (old guidance) now = Net assets with donor restrictions
-Holding in a seperate bank account is not required but a good for a long term project.
the contributions would be booked to income as normal. (ie part VIII line 1f prob)
-But you need to track the amount of these donor restricted funds receieved and used over multiple years until done etc.. (the bank balance could be how you track this) but you could also track it outside the GL on excel. You can do it by year. Donor restircted fund recvd in 2023, used in 2023 , balance , etc.
The Net Asset section of the balance sheet - you will have Donor Restricted Net Assets (facility Addition) equal the balance of fund you are tracking. you can make a AJE to reclass this amount of of Unrestricted Net assets. That amount will be on Form 990 Part X - line 28 Net assets with donor restrictions...
JV |🗝️ ◕△◕ 🗝️|
2 votes
1 vote · 3 comments
Members of the non profit voting?
r/nonprofit iconr/nonprofit
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2 days ago
Members of the non profit voting?
JV_CPA JV_CPA avatarJV_CPA
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2 days ago
Not sure what you mean, but a membership organization will be where the Members Vote for Board members that manage the organization. Tradition organizations will have the existing board members vote for new baord members (per teh bylaws).
If you are saying all specific decisions will be made by the general membership by voting (instead of the board), that is not normal or advisable or even possible IMO.
In a traditional membership org, the members vote for the board, the board manages the org. Maybe you are moving to that from an org where the board will elect the new board members etc.
That is also not a great idea, like you are implying , you have to be careful of outside groups taking over control of the organization (which could be totally legal)
1 vote
1 vote · 7 comments
Board retreat
r/nonprofit iconr/nonprofit
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3 days ago
Board retreat
JV_CPA JV_CPA avatarJV_CPA
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2 days ago
People paying for their share of lunch sounds like an exchange transaction. Book the receipt of the cash against the expense account that the lunch was booked to....
The expense the organization has for lunch
Meeting expenses XXX
Cash XXXX
Collection $ from Board memebers
Cash xxxxx
Meeting expenses xxxxx
1 vote
1 vote · 4 comments
How bad is lack of compliance with tax receipts, donor-advised funds, etc?
r/nonprofit iconr/nonprofit
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3 days ago
How bad is lack of compliance with tax receipts, donor-advised funds, etc?
JV_CPA JV_CPA avatarJV_CPA
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3 days ago
---This all seems pretty iffy to me, but nothing was flagged by our auditors,
These are mainly IRS tax compliance issues. Not Financial statement audit issues. But if the auditors’ prepare the form 990 they may have caught some of these.
---Specifically donors who give through donor-advised funds have been getting automated tax receipts.
That is a process problem, the tax receipt should go to the DAF, but technically, the DAF being a 501( c)(30, the funds received from the DAF are grants to your organization, and no tax receipt is necessary. The normal procedure is to thank the person (that made the recommendation to the DAF), without any tax language in the letter
----people have also been paying for their memberships with DAFs (even our memberships that aren't 100% tax deductible)
That is actually a problem for the DAF , not your organization. They technically should not pay any non-deductible portion of the dues… But def no tax letter to the recommender or anyone.
---All membership levels are getting 100% tax deductible receipts even though they're getting incentives, etc. For example, our higher tier memberships get free workshops and catered dinners.
You need to break out some portion of the Membership Fees. Accounting needs break out the income to separate accounts on your GL. The Exchange portion and the Contribution portion to separate accounts. That same data should be available to whoever does the tax acknowledge letters. (or vice versa)
---We don't seem to have anything in place that gives guidance about which portion of the membership is tax deductible and which isn't.
Should be clearly stated to potential members somewhere. Also accounting needs the data, which will be utilized by whoever does the tax acknowledge letters (or vice versa)
--my fundraisers were hesitant to tell our upper-tier members that they cannot use their DAF for a membership.
Like I said above, that is a problem for the DAF. The DAF is a 501(C)(3) and basically gives you an unrestricted grant. You normally would not question anything about unrestricted funds coming in.
Smaller NPs don’t really do all this accounting correctly throughout the year. And they really don’t need to. But the tax acknowledgement letters need to go out correctly , so the data is needed by then. The person doing the year-end would normally make adjustments for this (the person doing the form 990). A lot of times I get the data from the Spreadsheet use for the tax acknowledgement letters to make the accounting adjustment, Fundraisers usually mean a bunch of journal entries to get everything sorted for Form 990 Lines 1C / 8a / 8C etc…
Doesn’t seem too big a deal. Just some accounting and process tweaks. No one is going to audit (IRS) you for this. But one ! REDFLAG ! is this:
Part V-Line7: Organizations that may receive deductible contributions under section 170(c). a Did the organization receive a payment in excess of $75 made partly as a contribution and partly for goods and services provided to the payor? - YES
Answer this question “YES” you should have amounts on line 1c AND also 8a on part VIII (page 9)
JV |🗝️ ◕△◕ 🗝️|
16 votes
7 votes · 6 comments
Interview with Fractional CFO
r/nonprofit iconr/nonprofit
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5 days ago
Interview with Fractional CFO
JV_CPA JV_CPA avatarJV_CPA
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4 days ago
What kind of position are you applying for?
1 vote
1 vote · 3 comments
Just launched, name change question (yes, already...)
r/nonprofit iconr/nonprofit
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7 days ago
Just launched, name change question (yes, already...)
JV_CPA JV_CPA avatarJV_CPA
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5 days ago
Not sure exactly what you mean about doing the name change out of the gate.. Firstly, you would have to change your corporation name with your state. I don't think you need to file a DBA in this case. (you will not need to use both names right? just the new one). You need to do whatever your state needs to change the corporate name. Certificate of Amendment or something. You will then have an amended certificate of incorporation and send to the IRS (and everywhere else). You can get the name change Expedited , some times 24 hours (depending on state)
https://www.irs.gov/charities-non-profits/charitable-organizations/change-of-name-exempt-organizations
As for timing, If you have your amended Articles of Incoporation , with new name, BEFORE you submit the 1023, I think you will just use the new name on everything, including your 1023, initial Form 990 etc. If you changed your name 10 years ago and are filing a 1023 now, you would use the new name, so same thing... If you already filed the 1023 with the old name , you may want to wait until it's proceesed and then file the change with the IRS... If you filed under the old name, you could call the IRS Exempt organization unit 877-829-5500, and see if it could be changed before it's processed (or maybe pulled) but not sure how helpful that will be..
Good luck helping Fish 🐟🐟🐟 .....Excuse me , I meant Sea Creatures 🐟🪸🦑😅
JV |🗝️ ◕△◕ 🗝️|
1 vote
0 votes · 3 comments
Managing Board Members as a Young Nonprofit Leader - Need Help!
r/nonprofit iconr/nonprofit
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5 days ago
Managing Board Members as a Young Nonprofit Leader - Need Help!
JV_CPA JV_CPA avatarJV_CPA
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5 days ago
This is an "age does not matter" problem. You will see Management and board disconnects are very, very common. All NPs are different, so there is no one answer. Executive Directors and Management etc , work for the board. They are technically the bosses. I dont' want to freak out peeps by saying that, but sometimes you need to approach it that way. I mean, looking to assign duties to the board could come off wrong.
But board members need to know they need to take "ownership" of an organization - Duty of Care etc. Many times they consider being on a board like voluteering for an organization etc. But obv there are great boards out there, usually board members that founded the organization, that are passionate about a cause etc. Funny thing about those organizations is that I see the EDs complaining about too much "direction" and Involvement from those boards 🤷
At least you are getting this Board interaction experience while you are young. It's essential if you are going to stay in management positions in the NP sector...
JV |🗝️ ◕△◕ 🗝️|
3 votes
5 votes · 11 comments
Ambiguous Indirect Donations
r/nonprofit iconr/nonprofit
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5 days ago
Ambiguous Indirect Donations
JV_CPA JV_CPA avatarJV_CPA
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5 days ago
No matter what happens in this scenario (if someone was to get a donation receipt), the Church will be fundraising. The Church is the US Charity. It does not matter how the money moves around. If the College is a separate organized entity in a foreign country, then funds sent directly to the college are not tax deductible to US persons. In that case the contributions need to be to the US church (and donor restricted to use on some education purpose I guess).
Also, separate bank accounts are for ease of internal record keeping, are not required and have no bearing on anything. I would not worry too much about appearance. This sounds like a major charitable endeavor of the Church, I would go with clarity and transparency as the best path to all good things….
Another tip for churches is to “pretend” you Fill out Form 990 each year, because all the rules and requirements apply , even though you don’t need to file as a church. (i.e. Tax Acknowledgement letters, foreign grants, donor restricted funds etc. etc.)
JV ◕△◕
3 votes
0 votes · 7 comments
Tax Notice CP259A
r/nonprofit iconr/nonprofit
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7 days ago
Tax Notice CP259A
JV_CPA JV_CPA avatarJV_CPA
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5 days ago
I have a 12/31/2021 yead end. Extended due date 11/15/22 (extension was filed timely). The Efile of the 990 did not go through , they recvd the IRS letter in June 2023...
1 vote
1 vote · 6 comments
Tax Notice CP259A
r/nonprofit iconr/nonprofit
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7 days ago
Tax Notice CP259A
JV_CPA JV_CPA avatarJV_CPA
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6 days ago
Definitely Write a letter - from the client , unless you have a POA, but from client is better. Say they thought the accountant Efiled the extension and that they found out there was a technical prob with the accountant's efile system. Also say the P&I would be an undue hardship and hinder the org in its mission of serving the public doing XX.
If it's the first time, it will get abated. You can also call the IRS [877-829-5500 ] and say you sent a letter , they will put a hold on the account (to prevent new letters etc) until it's abated
JV |🗝️ ◕△◕ 🗝️|
1 vote
1 vote · 6 comments
Cost for forming non profit in NYS
r/nonprofit iconr/nonprofit
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7 days ago
Cost for forming non profit in NYS
JV_CPA JV_CPA avatarJV_CPA
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7 days ago
just want to also mention, if you download a file from them , and it doesn't open, you need to add .PDF - they don't names things proper when scanning..
1 vote
1 vote · 7 comments
Cost for forming non profit in NYS
r/nonprofit iconr/nonprofit
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7 days ago
Cost for forming non profit in NYS
JV_CPA JV_CPA avatarJV_CPA
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7 days ago
🫡
1 vote
1 vote · 7 comments
Cost for forming non profit in NYS
r/nonprofit iconr/nonprofit
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7 days ago
Cost for forming non profit in NYS
JV_CPA JV_CPA avatarJV_CPA
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7 days ago
You can find good bylaws online to tweak for your org (prob better than using ChapGPT)
Fun fact - registering in NYS make the orgs bylaws public. You can see any bylaws for registered charities in their database: (they started posting the eorg docs about 10 years ago, so only orgs registered in the last 10 years will show the bylaws in the database)
https://www.charitiesnys.com/RegistrySearch/search_charities.jsp
1 vote
1 vote · 7 comments
Cost for forming non profit in NYS
r/nonprofit iconr/nonprofit
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7 days ago
Cost for forming non profit in NYS
JV_CPA JV_CPA avatarJV_CPA
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7 days ago
I guess it's fine. $1200... Hopefully your Cert of incorporation is correct [double check that there is a clause that upon dissolution , all assets go to another 501(c)(3) ]
You should also have bylaws (you prob do) and if there is not a Conflict of interest policy within the bylaws , that is law in NYS.
You also need to file a CT-247 (no one remembers this) https://www.tax.ny.gov/pdf/current_forms/ct/ct247.pdf
Also - you prob what to file a Sale tax exemption (to not pay sales tax on purchases etc) https://www.tax.ny.gov/bus/st/exempt.htm
Yeah, it is much better to just do all this yourself, because lawyers really don;t know how to properly setup a charity , no matter what they say.. And if it's probono , they will prob just messed it up more (cause the lawyer assigned will have just graduated last week... ). https://probonopartner.org/ is a great Probono org covering NY, but they will only do certain things.
Bottom line, small NPs need to be very hands on... Better to learn how to do most stuff yourself.. GL with your org..
JV |▰ ◕△◕ ▰|
2 votes
1 vote · 7 comments
What is the issue with enrolling in Facebook fundraising tools?
r/nonprofit iconr/nonprofit
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8 days ago
What is the issue with enrolling in Facebook fundraising tools?
JV_CPA JV_CPA avatarJV_CPA
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7 days ago
Answer is prob the new Law in CA. All orgs using these platforms (based in CA) need to register in CA.. See below...
California's AB 488 regulates online charitable fundraising platforms ("CFPs") (e.g. Facebook, Network for Good, PayPal Giving Fund etc.)
Each CFP must start tracking its online charitable solicitation transactions beginning June 12, 2024, so that the CFP can submit its first annual report to the CA AG in 2025
CFPs required to Regularly Verify Good Standing of All Charities on Platform (Currently in Effect) – meaning charities using these platforms must be register in CA ( AG & Franchise Tax Board) as well as IRS.
Good Article:
https://www.dwt.com/insights/2024/06/california-ab-488-charitable-funds-rules-in-effect
Facebook’s info:
https://www.facebook.com/government-nonprofits/blog/maintaining-access-to-metas-fundraising-tools-amidst-ca-ab488
JV |▰ ◕△◕ ▰|
2 votes
3 votes · 6 comments
Ethics of donating as president?
r/nonprofit iconr/nonprofit
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8 days ago
Ethics of donating as president?
JV_CPA JV_CPA avatarJV_CPA
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7 days ago
Donating great. (shouldn't be earmarked to a specific lawyer though.. ) Updated bylaws would need to be approved and voted on by the board. So more than, aware of intentions and mockups. See your current bylaws for the process of updating your bylaws. But I am sure you prob meant that. Nice job trying to set things right there..
JV |▰ ◕△◕ ▰|
5 votes
17 votes · 23 comments
ED’s - Board asking for a list of priorities for their involvement
r/nonprofit iconr/nonprofit
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8 days ago
ED’s - Board asking for a list of priorities for their involvement
JV_CPA JV_CPA avatarJV_CPA
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8 days ago
This is a good pub from NYS Charities Bureau about board members’ responsibilities
https://ag.ny.gov/sites/default/files/publications/Right-From-the-Start.pdf
JV |▰ ◕△◕ ▰|
2 votes
4 votes · 14 comments
Board Member Reimbursement
r/nonprofit iconr/nonprofit
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9 days ago
Board Member Reimbursement
JV_CPA JV_CPA avatarJV_CPA
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8 days ago
Yes, if they are proper organization expenses it's fine. You should have a process for expense reimbursements to be approved by independent persons , but it's ok to reimburse. And you could have had expenses and been operating, with a bank account while the application was pending anyway.. JV |▰ ◕△◕ ▰|
2 votes
1 vote · 3 comments
Looking for assistance in CA for my friend's NPO (Legal, accounting)
r/nonprofit iconr/nonprofit
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9 days ago
Looking for assistance in CA for my friend's NPO (Legal, accounting)
JV_CPA JV_CPA avatarJV_CPA
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9 days ago
I really don't thing this org is at that point yet. But that could be down the line a bit.. Prob with those companies is it is hit or miss if you get a good fit. And then people leave and you get a new person etc.. But its also very hard to get a long-term (indepdendent) bookkeeper that is quailty.. Not easy being a small NP..
JV |▰ ◕△◕ ▰|
1 vote
2 votes · 11 comments
Looking for assistance in CA for my friend's NPO (Legal, accounting)
r/nonprofit iconr/nonprofit
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9 days ago
Looking for assistance in CA for my friend's NPO (Legal, accounting)
JV_CPA JV_CPA avatarJV_CPA
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9 days ago
This is one of those "you can look it up" things : )
https://www.irs.gov/charities-non-profits/annual-electronic-filing-requirement-for-small-exempt-organizations-form-990-n-e-postcard
If you are average under 50K revenues (last three years) you can still do 990N - then you can go up to 990EZ.. but check the link for specifics..
regardless of what you are filing with the IRS, you should always have basic bookeeping done (qbooks) and will be ready to file 990EZ anyway..
JV |▰ ◕△◕ ▰|
2 votes
2 votes · 11 comments
Looking for assistance in CA for my friend's NPO (Legal, accounting)
r/nonprofit iconr/nonprofit
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9 days ago
Looking for assistance in CA for my friend's NPO (Legal, accounting)
JV_CPA JV_CPA avatarJV_CPA
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9 days ago
Firms that specialize in NPs deal with larger entities and charge a lot of money. And they won’t have the capacity to answer these basic questions. Smaller accountants and tax guys don’t do much of this (NP, Exempt orgs etc) and may just give you bad advice. Even if you find a probono situation, they will prob not give you good answers (cause that is mainly a law firm giving some recent grad something to do – any they will just look it up on the web). I won’t trust any advice anyway.. I would look it up to verify. & You’ll get better advice on fundraising stuff here than from any accountant IMO. With small NPs, the board, or whoever is running it , needs to get their hands dirty.. this is the way IMO.
(1) you need to do bookkeeping (quickbooks) - prob do yourself [ see my only reddit post about discounted qbooks - https://www.reddit.com/r/nonprofit/comments/1fi4eaz/discounted_quickbooks_and_other_software_for_nps/
(2) you need to (prob) file IRS 990. As a religious org, you may be exempted - especially if it’s a house of worship. Look up the rules. (no CPAs know this) You prob could file the 990N which is just pushing a button on the web basically..
(3) you need to see if you have any filing requirements in CA (prob exempted as a religious org) – look it up. No CPAs know this.
(4) auctions - look this up - how to run a charity fundraiser etc.
(5) fund to donate an ambulance in a needy country: Any time you raise money for a specific thing - or if a donor just tells you it’s for a specific thing, you need to track the funds in the use on the specific thing. That's it. don't need separate bank accounts , nobody (but the donors) are really looking at this. Just know how much you have left to spend on the restricted purpose. You will need the amount left to spend (donor restricted fund balance) at year end for you Form 990 (unless you do 990N)
(6) donations to general fund - you should stop thinking about "funds" - if donor restricted funds come in, track it. that's it. If it’s not donor restricted, its unrestricted.
Advice: don't create “rigid” donor restricted funds. for example. When collecting or fundraising for this ambulance say " we are raising funds for an ambulance, if we fall short of the goal, we will use the funds for the X Community in another way" you never want to locked into something.. people will be find with this language.
Ping me if you post a question here, i'll try to answer..
JV |▰ ◕△◕ ▰|
3 votes
2 votes · 11 comments
Looking for assistance in CA for my friend's NPO (Legal, accounting)
r/nonprofit iconr/nonprofit
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9 days ago
Looking for assistance in CA for my friend's NPO (Legal, accounting)
JV_CPA JV_CPA avatarJV_CPA
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9 days ago
You prob don't need a Nonprofit lawyer type for these questions. Maybe an accountant type, but sounds like pretty basic questions that can be looked up on the web or maybe can be posted here. Also doesn't have to be from CA. I suggest looking up whatever you could on these subjects on the web, or online guides, etc , and then posting specifics questions here.. It's just almost impossible to find an acccuntant or lawyer that will help with this.
JV |▰ ◕△◕ ▰|
2 votes
2 votes · 11 comments
For a corporate foundation 990, how would you track in-kind donation of services by corporate employees?
r/nonprofit iconr/nonprofit
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22 days ago
For a corporate foundation 990, how would you track in-kind donation of services by corporate employees?
JV_CPA JV_CPA avatarJV_CPA
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10 days ago
First, Inkind services received (and corresponding expense) are not reported on Form 990. NonCash Contributions (like food or clothing) are, but not inkind probono services. But you are not asking that i think.
Only certain salaries are reported on Form 990. See Part VII (on page 7) and look at the instructions to see who is listed there. But the ED is definitely one of them. If they are paid by the organization it be in column D. If they are paid from a related organization (see instructions for what a related org is) it would be in column E.
Also, if there are interactions between 2 related orgs, there is problably a Sch R, where you can see more related party info.
Note: Form 990 PArt IX (Page 10) has total salaries on lines 5&7.
JV |▰ ◕△◕ ▰|
1 vote
1 vote · 2 comments
Honoring donor intent as organization's needs change
r/nonprofit iconr/nonprofit
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12 days ago
Honoring donor intent as organization's needs change
JV_CPA JV_CPA avatarJV_CPA
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10 days ago
Basically, you are asking if you can change or move donor restricted funds and use on something else etc. First, always try to not have your donations restricted. Especially small donations. The language you use when soliciting etc., can be tweaked to make it unrestricted probably.
You may want to read Uniform Prudent Management of Institutional Funds Act (UPMIFA) or your state’s version of this. This is law that lets organizations spend restricted funds or change restrictions. This is basically mean to focus on major endowment funds (colleges etc.), it gives flexibility in spending principal , when the donor (let’s say 100 years ago) restricted the college to spend only the interest. Things like that.
So technically, you change or release restrictions if you get donors ok. No one is monitoring this ; it falls under the jurisdiction of your state’s charities board or Attorney general. In your case, it is a small amount of $$. So you can make a best effort to reach out to donors, let them know the restricted purpose is not achievable and ask if it can be unrestricted or repurposed. They (donors) can also ask for the $$ back if they want.
Just in case this is misunderstood, it does not matter which bank account the “funds are in”. Your bank accounts are for your internal purposes and organization, funds going into one account, or another does not change the donor restrictions on use of the funds. If a donor gives you $100 restricted to a purpose, you have incur a $100 expense on that purpose at some point (from any bank account, cash or whatever) Sometimes (like in a government contract) you have to open a specific checking account for a project, but this is not the case for you.
JV |▰ ◕△◕ ▰|
1 vote
1 vote · 1 comment
New nonprofit
r/nonprofit iconr/nonprofit
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20 days ago
New nonprofit
JV_CPA JV_CPA avatarJV_CPA
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19 days ago
this
2 votes
0 votes · 15 comments
Suggestions for Finance mgmt tools for NFP with $500k / yr budget
r/nonprofit iconr/nonprofit
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23 days ago
Suggestions for Finance mgmt tools for NFP with $500k / yr budget
JV_CPA JV_CPA avatarJV_CPA
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22 days ago
I see that proposal , under $700 for just quality bookkeeping may be pretty good in itself. But You will still need an accountant (CPA) to prepare your Form 990 (and maybe review Financials, depending on your state and funders etc) & a payroll processing company.
I agree with a few other comments. I suggest you get QuickBooks online and try to do the bookkeeping yourself. It is the best way to fully grasp everything. And the time spent telling bookkeepers "what things are" maybe be equal to you doing it yourself at this point. You will know when you need to move to a bookkeeper…
Adding in a Payroll Company (adp, paychex etc) when you run W-2 Payroll (they don't seem to be doing that anyway , so you would need this in any case)
Adding a CPA to prepare your Year end Form 990. They will prob be able to work with your quickbooks that you maintain and make any adjustments at year end as necessary. The CPA could possibly help you with NP and Charity type question also..
So Quickbooks online + Payroll Company + YE CPA
Note: see my post about Discounted QuickBooks for Nonprofits
https://www.reddit.com/r/nonprofit/comments/1fi4eaz/discounted_quickbooks_and_other_software_for_nps/
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2 votes
2 votes · 20 comments
Change Accounting Basis
r/nonprofit iconr/nonprofit
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23 days ago
Change Accounting Basis
JV_CPA JV_CPA avatarJV_CPA
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22 days ago
Yes, accounting for leases under ASC 842 could be an issue. But once you set up a spreadsheet at the onset, you have every journal entry you ever need to make for the duration of the lease. You just have to explain to people what these new big Asset and liabilities are. (or tell them to ignore them, they basically cancel out : )
I have a spreadsheet template for ASC 842, it you HMU somewhere i'll send it to you..
also, sure you need Audited Financials at < $100k ?? Can't a Review be sufficient?
1 vote
4 votes · 4 comments
Change Accounting Basis
r/nonprofit iconr/nonprofit
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23 days ago
Change Accounting Basis
JV_CPA JV_CPA avatarJV_CPA
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23 days ago
I see no reason why a Nonprofit organization would not be on the accrual basis to be GAAP compliant. (unless you are a tiny organization. There may be little difference between Modified cash and accrual for the organization. Also, unless you are subject to tax, (and file 990T) the org does not have to request consent from the IRS to change to accrual. In NYS , the Reviewed or audited financial that need to be submitted to the charities bureau have to be prepared under GAAP (accrual) (this differs state to state).
It is my understanding that Generally Accepted Government Auditing Standards (Uniform Guidance) incorporate Generally Accepted Accounting Principles (GAAP) , so you will need to be GAAP (Accrual). But... maybe this pass-through funding won’t subject you to a Single Audit (The threshold is going up to $1 Million)
3 votes
4 votes · 4 comments
How should I record and report these scholarships from a private foundation?
r/nonprofit iconr/nonprofit
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25 days ago
How should I record and report these scholarships from a private foundation?
JV_CPA JV_CPA avatarJV_CPA
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24 days ago
Maybe they are listing in wrong on the 990PF, idk, They may be cutting corners or something and grouping all the Individual schorlarships per school. But that doesnt really matter to the substance of the form 990, i dont think. there are massive amounts of errors on 990s all the time, this is a minor one.. And the way its shown on 990 does not dictate how is it accounted for in GAAP on your part. Good leg work on your part.. You would make a good auditor : )
1 vote
3 votes · 14 comments
How should I record and report these scholarships from a private foundation?
r/nonprofit iconr/nonprofit
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25 days ago
How should I record and report these scholarships from a private foundation?
JV_CPA JV_CPA avatarJV_CPA
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24 days ago
Maybe what is happening is the PF is making a grant (scholarship) directly to the student. As an act of administration, the funds are paid directly to the school. If the funds were paid to the student, and the student paid the tuition, it would be earned (tuition) revenue for the school. Maybe you can ask the accounting department to get clarification..
3 votes
3 votes · 14 comments
Assumed 501c3 to legit 501c3
r/nonprofit iconr/nonprofit
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28 days ago
Assumed 501c3 to legit 501c3
JV_CPA JV_CPA avatarJV_CPA
·
27 days ago
You are right, a lot of churches (and other houses of worship) are assume 501(c)(3) status. People do not realize that churches don't have to even file form 1023 to be 501(c)(3) status. And since they are also exempt from filing Form 990, they are completely off the grid (so to speak). This is allowed because of the Separation of Church and state thing.
The church can just go online and file Form 1023, It will guide you through which sections you need to fill out for a church etc. Once accepted, you will get a Tax Determination letter and be listed on the IRS website etc.
This will NOT mean that you have to file Form 990. It will change nothing but give you that extra level of confidence from people (congregation, community etc.). It will also help in fundraising.
You can start by reading this:
https://www.irs.gov/charities-non-profits/churches-integrated-auxiliaries-and-conventions-or-associations-of-churches
Adding: Although they don't have to file Form 1023 or Form 990 (and prob nothing for the state), a House of Worship is subject to all the rules and any other reporting requirements of any 501(c)(3) Nonprofit organization. An “assumed” 501(c)(3) church can “lose” its 501( c)(3) status, even though they did not have to file anything to get it. You see this a lot when churches get involved with Politics. (if an assumed church losses status, they do have to file form 1023 and go through the reinstatement process)
https://www.irs.gov/charities-non-profits/churches-religious-organizations
https://www.irs.gov/charities-non-profits/charitable-organizations/restriction-of-political-campaign-intervention-by-section-501c3-tax-exempt-organizations
5 votes
2 votes · 6 comments
Planning on selling items—business license, seller’s permit, both?
r/nonprofit iconr/nonprofit
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27 days ago
Planning on selling items—business license, seller’s permit, both?
JV_CPA JV_CPA avatarJV_CPA
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27 days ago
gr8 answer, I will add that you can sell items outside of your mission. But that will open you up to unrealted business taxable Income (UBIT). That is when a NP pays a tax on that income (after decutions), like they were a regular corp. They would file a form 990-T to report this and pay the tax. This will make book keeping more complex, and year end filing more complex (because of Form 990T). The tax owed is the least of the prob in that sitaution. Exactly as stated , make anything you sell part of your mission somewhow. And if there is a bit of something outside of you mission somehow, dont worry about it. It this becomes a majoy operation and material then look at all the items a little closer..
Like it was said, You will need pretty much anything a for profit will need to operate this business. Check out how to start a business in California (prob alot of stuff and resourse from CA on that). Also look out how to start a pet store business etc.. GL
1 vote
2 votes · 3 comments
Asked to join a board.. what does this mean in practice?
r/nonprofit iconr/nonprofit
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27 days ago
Asked to join a board.. what does this mean in practice?
JV_CPA JV_CPA avatarJV_CPA
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27 days ago
Every single nonprofit is different. I think you said you read the board minutes, if not ,look at the last few years. Get the vibe of the organization and also see if there is any tension (chaos) amoung board members. Read the bylaws of the organization too see exactly how their governance works. Also, look over the last few years Financial statements (if any) and form 990. [This is part of what I do when accessing to accept a new client etc.] Board titles, outside of President (or chairperson) and Treasurer, usually don't mean too much in a small organization. About the give policy, I really dislike this. Especially for smaller, community organizations. I do see it alot, but usually when there are bunch of rich people on the board. And those boards tend to be the kind that many board memebers do nothing but go to fundraisers etc. Smaller "hands on" boards should not need a give requirement, because it's the time you are giving that is most valuable IMO.
r/nonprofit
Are admin and overhead rate the same thing?
JV_CPA·2 days ago
<<<<<<<TLTR ANSWER>>>>>> Admin, when talking about Functional Expense allocations may not coincide with the Term “overhead” use by a funding source. Find out what the grant means by Overhead, in their case >>>>>>>>
Yep, there is no perfect accounting firm and maybe the specific accountant you were dealing with may think that they understand something 100% - but 30 years later they will admit they didn’t know much back then [Raising my hand] : )
The problem is that there are different forces at play.
The first and foremost, in the nonprofit world , is the functional allocation percentages. You see these function exp breakouts on your IRS Form 990 and your financial statements. Program Exp, Mang & General (aka Admin) and Fundraising. There is a slew of guidance on breaking these out in GAAP (Generally Accepted Accounting Principles) and by the IRS (form 990 instructions-rev rulings etc). This is the Percentage the “Charity Rating Agencies” use. Funders and grantors look at this etc. You have heard of Guidestar, Charity Navigator, Charity Watch etc. (I dislike all this agencies…). This is the thing your accountant was explaining. As with all allocations there is alot of assumptions and flexibility (i.e. how much of Salary, Rent, Tech cost, etc should be in Program vs. admin) In smaller nonprofits , so much is allocated because everyone does everything. You know what I mean… So that is that.
When dealing with some grants (especially govt grants) or in some other places, someone may ask about overhead (or even use the would Admin, but in a different light). This really could vary from thing to thing. But this Overhead and the Function Expense allocation (above) may not coincide. For example, part of your occupancy (rent) will definitely be in Program Expenses. But a specific grant or government funder may consider occupancy 100% overhead. Overhead, in these circumstances, really pulls out anything that is not a very direct cost. But you have to look at the specifics of whoever is asking. There could still be allocations. But different. Maybe a grant allows salary of a specific person (executive director) to be max 10% allocated to program (and the rest be Overhead).
Since Overhead is not Standard, you must look at the definition the specific grant is using. A good tool to figure out what a specific funder means by overhead , is to find the report you will send them (they will prob require a qtly or annual report of some sort). That is what they will look at to see if you are meeting requirements. Find those instructions. That will explain what overhead is in this case. You don’t want to spend too much time on grant applications, so use this info and any other info you can find (guidance from them) and make some guesses (I mean assumptions) that lean toward less overhead. If you get the funding, you will prob be able to meet there requirements. I know this is foggy, but…
Sounds like your accounting firm could be fine. You are better off finding info and help in these respects from networking with people from other Organizations that deal with the same type of funding sources (EDs, CFOs, Accountantss of those orgs etc..) JV
6 votes
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12 votes · 13 comments
Question regarding loans and 990
r/nonprofit·5 days ago
Question regarding loans and 990
JV_CPA·5 days ago
These are 2 separate transactions. You can consider them unrelated.
LOAN: record the loan received in 2023. Debit cash. Credit Loan payable 250k. Record loan repayments as they happen, breaking out the interest from the principal as you would normally. The only item affecting P&L is the interest. Your 12/31/23 balance sheet (assuming calendar year) should reflect the loan balance at that point, reconciled to the December loan statement.
250k GRANT: this is a cost reimbursement contract (CRC), so you should account for it like that. Usually, I see that a CRC would allow you to bill them when expenses incurred (services performed) but the grant payment received happens months later. If that is your case you would have a grant receivable (asset) and grant income equal to the amount of expenses incurred in 2023:
Assuming all 250k was used in 2023 it would be Debit grants rec. 250k.
Credit grant income 250k (2023)
Then when you get the grant $ in 2024, Debit: cash 250k Credit: Grant rec 250k
If for some reason this contract's condition is that you pay the contractors first (like you said) before you have rights to the grant, then do this:
in 2024 , after you pay the contractors: Debit grants rec. 250k.
Credit grant income 250k
Then when you get the grant $ in 2024, Debit: cash 250k Credit: Grant rec 250k
I am assuming it's the first case , where your organization's income will match your expenses. Because in either case you will have the expenses in 2023. Whether paid in 2023 or as an accounts payable at the end of the year (like your case).
But the receipt of the loan did not create your organization's liability, the performance of the services created the liability...
Jv
9 votes
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4 votes · 5 comments
Working with a PAC??
r/nonprofit·6 days ago
Working with a PAC??
JV_CPA·6 days ago
Also you should see what your board thinks first.
2 votes
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5 votes · 16 comments
In kind donations
r/nonprofit·9 days ago
In kind donations
JV_CPA·8 days ago
That is prob correct (what you read). But there are 2 things at play. When you read about how the charity does not set a value, that is for Acknowledgement letters. The charity does not give a value on donated items (non-cash) etc to the donor. You are not allowed to mention a value in the ack letter. [& the value to the Donor and the value to the charity could be very different]
People (Donors) estimate their own value on noncash donations(for their personal taxes) and sometimes will need to support that with an appraisal.
BUT: For the charities internal accounting (form 990 or GAAP financials) the charity will report the noncash contribution at Fair value using some reasonable method (like in my previous comment). This is the value to the charity , not the Donor (e.g. a Fur Coat donated that will be given away to disadvantaged people, will be valued the same as any other coat.)
There are special rules if a donated item is to be resold (like car donation programs...)
Donated auction items are valued at the amount they sold for in the auction (per Form 990 instructions) . (GAAP could be a bit different) JV
4 votes
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11 votes · 12 comments
Is it ok to file a 990-N if we have previously filed a 990-EZ
r/nonprofit·15 days ago
Is it ok to file a 990-N if we have previously filed a 990-EZ
JV_CPA·9 days ago
I kinda agree with the sentiment of filing the 990EZ. Not because it's required, but because it will be your only reporting form you can show a perspective funder or for a grant application. Understood about the cost of the preparation etc. So the 990N is obv easier to do.
You should be able to switch to the Form 990N , but , if you (or if your accountant) get some kind of error, saying you can't file it through the electronic system, you may have to call the IRS Efile unit and tell them to change your account to be able to file the 990N. I have seen this happen when an org switched to 990N from 990EZ etc.
1 vote
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1 vote · 3 comments
In kind donations
r/nonprofit·9 days ago
In kind donations
JV_CPA·9 days ago
You may not need to put that in your Budget, as with many non-cash items. But for Accounting (bookkeeping) you should value the Food received per pound (a lot of orgs use figures from Feed America or similar studies, at around 1.75 per pound.) I would make an account Food Donations -Noncash. You can book the other side to Food Distributions Expense. If there is a material amount in your inventory, you can adjust for that at year end.
So it looks liek you will have a monthly accounting entry of (using the 1.75 per lb figure..)
Dr Food Distributions (Expense) 175,000
CR Food Donations -Noncash (income) 175,000
But this should not affect your budget since this does not affect cash.
9 votes
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11 votes · 12 comments
Family foundation 1023 EZ or not
r/nonprofit·10 days ago
Family foundation 1023 EZ or not
JV_CPA·9 days ago
Maybe you should consider the major complications and administration that a Nonproft 501(C)(3) will bring. You could donate to almost any college foundation and achieve this without any headache. You can have a scholarship named after your family and even (possibly) be part of the selection process. And, FYI, it looks like you are about to form a Private foundation. I guess that is the intention. PF are bit more complicated and may limit you deduction. Donating to the schools directly will not. There is much to consider besides the 1023. Too much to list here. The main advice is, if you have the resources, you should look for a quality CPA firm to help you set this up.
( I understand , there is a going to be a cost to that... )
The best way IMO is to look at your State CPA Society and look at Firms that are in their NonProfit or Exempt organization committee.
1 vote
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2 votes · 4 comments
Best online accounting tools for Non-Profit
r/nonprofit·11 days ago
Best online accounting tools for Non-Profit
JV_CPA·11 days ago
I usually also say QB Online - since more bookkeepers use it and you should plan to be using a bookkeeper in the future etc.
I guess importing is ok, but more developed orgs will be processing info real time (enter checks and deposits when they happen) not after the fact (monthly quarterly) etc. And I see clients' books all messed up from importing. It does not take long to enter 50 transactions a month, especially with qbooks recalling the last account used etc. This is also a low-key internal control, someone really looking at each transaction etc. Remember as a NP you need to put in all the names of customers / donors for reporting purposes (see form 9 90 sch A or sch B) + ack letters etc. Importing does not do this well or at all.. Importing is way overrated IMO, if your books are done right, it could actually waste time ( I guess I should say this last point is a HOT TAKE lol )
And 100% what BigRedCal says about the chart of accounts. Limit top level accounts to what you see on form 990 – page 10 (long form). If you want sub account sunder those fine. But you don’t need much more than that.. And I try to keep it the C of A in Form 990 order as well. So it’s easy to understand the Form 990 (where the #’s come from etc)
1 vote
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2 votes · 3 comments
Providing a Sub-grant to another Non-profit
r/nonprofit·16 days ago
Providing a Sub-grant to another Non-profit
JV_CPA·12 days ago
If its a grant, you should just know. Like any other grant. People are not randomly sending out $$. So someone will correspond in some capacity. Myabe say what the grant is for if it is program specific. And if it is an earmark , you will definitely know. Someone will say , hey here is that $$ you need to send to XYZ org. But if it's an earmark like that, you can just say no thanks, they can send it to them directly.
You see,the Parent org looks like they want to give (grant) the funds to New NP, but does not want the oversite (or any resposibility) they are trying to pass the responsible over to your org. But it doesnt work like that , I grant to your org , you have decretionary power over the funds. etc..
1 vote
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4 votes · 15 comments
Where do you draw the line between non-profit and for-profit?
r/nonprofit·13 days ago
Where do you draw the line between non-profit and for-profit?
JV_CPA·12 days ago
This situation is always an issue - you can't use nonprofit resources to benefit the FP etc etc. One really good answer is that you help in forming the NP with a completely independent board. or you can be one board member on 5 or 6 and any conflicted issues will be decided by the independent members (according to your Conflict of interest policy). If you plan on melding your business (like with ads) with this NP it may bnot be a great idea. Remember, you don't own the nonprofit. (like when you say My NPO etc). You may be a board memeber, but would usually have to exclude yourself from conflicted issues. Since your paperwork is done already, maybe you have an indepedent board already.....
3 votes
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1 vote · 4 comments
Question on refund with regards to non profit contribution
r/nonprofit·15 days ago
Question on refund with regards to non profit contribution
JV_CPA·14 days ago
Give the refund. Especially if it's not a material amount and there are no issues. The purpose clause does not prohibit this. It could have been sent by mistake or not intended to be a donation. It could be a conditional contribution which had to be returned. + Do you really want teh person going online and making a complaint to your State Charity regulator ?
2 votes
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1 vote · 1 comment
Providing a Sub-grant to another Non-profit
r/nonprofit·16 days ago
Providing a Sub-grant to another Non-profit
JV_CPA·15 days ago
[Program A has $150,000 in the accounts…. needs to be given to them ]
Parent organization (their board) governs the organization. Program A people are just part of an organization run by parent organization. They have no bank account , no entity and no separate existence. Parent organization must make decisions as to what to do with their funds, if they want to continue Program A in some capacity, or use the funds to support its mission otherwise etc. (even I these funds were donor restricted)
[would serve as a sub-grantor …. we would turn around and write a check to the new NP]
Sub grantor (prob mean fiscal sponsors)
(1) what you describe is an Earmark. If the parent is saying you must past the 150k along to New NP than that is a conduit. That is treated as a disbursement directly from Parent to New etc.. That is prob the best situation for you. You are just like a processor in a sense.. but that is not what is happening…. it's prob theis >>>>
(2) You are basically getting a grant from Parent. Your org will have discretionary authority over the funds. Your organization will report Income (grant from parent organization). Your board can do what they want with the funds. Your organization may decide to make a grant to new organization. If so, you will report a grant (expense) to that org. You need to follow all policies and procedures, , oversight, reporting for grant makers. Best way to look at it, is these two event are not connected (the receipt of funds and the grant made) in practice. Pretend your organization will be making a 150K grant to a new organization and you have oversite responsibility etc..
If I was on your board, I would probably not want to be involved with this…
4 votes
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4 votes · 15 comments
Question about non-profit pledges
r/nonprofit·15 days ago
Question about non-profit pledges
JV_CPA·15 days ago
/\ This /\ The United Way is the largest is the largest Federated fundraising organization. You may have also heard of Combined Federal Campaign (for all Federal employees).. This is not a random NP org, or a NP org that is a member of (can receive funds from) the united way.... You work for the United Way. I would do a minimal amount. And you should be able to designate your contribution to go to a charity or area of your choosing..
4 votes
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6 votes · 24 comments
Is Hiring an ED a direct or indirect cost in terms of grant funding?
r/nonprofit·16 days ago
Is Hiring an ED a direct or indirect cost in terms of grant funding?
JV_CPA·16 days ago
You should think in terms of functional allocations, program expenses, admin expenses and fundraising expense. Look at full 990 form.... Quick answer is , in. a small organization, the ED is almost always involved in programs.. an ED salary could easily be 60 % prog. 35%. Adm 5% fr.... (Like if only one person working for example) So 60% of the Ed would be in program. The other 40% would be in admin +FR (or overhead).
1 vote
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1 vote · 4 comments
I took meeting minutes for the first time and was told they read like a transcript. Board didn’t like that their comments were recorded.
r/nonprofit·17 days ago
I took meeting minutes for the first time and was told they read like a transcript. Board didn’t like that their comments were recorded.
JV_CPA·16 days ago
Minutes should have a certain format and include certain things. And meetings should follow a certain order (i.e. Robert's rules). Minutes should be not too short (bullet points) and not too long (not a transcript) to be most useful. You can look up sample minutes to get some ideas. Also , are you a Public entity? 501(c)(3) organizations maybe public charities or private foundations. Other 501(c) are not really called public (they are tax exempt but not a public charity etc) . But a 501(c)(3) public charity does not have to publicly disclose their minutes unless they is some law in place or something else saying this. They only types orgs I see consistently doing this are local governments and governmental agencies. (and that is prob required by their law).
Thay being said Minutes are the most important documentation for an organization. The only evidence an organization has that supports its decisions and operations is the recording of Contemporaneous minutes. Think board member disputes that an Executive Directors salary was excessive (not approved.) A citizen complains to the AG about any issue etc.
1 vote
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129 votes · 58 comments
Viability check
r/nonprofit·17 days ago
Viability check
JV_CPA·17 days ago
Yes , but you need enough independent board members to be able to make decisions where there is a conflict of interest , like your salary etc.. it's common for a paid executive director to also be a voting board member in a small organization..
2 votes
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1 vote · 5 comments
Viability check
r/nonprofit·17 days ago
Viability check
JV_CPA·17 days ago
It is possible. You need an independent board to govern the organization, approve your salary and basically be you boss. You can service 2-3 families but your services generally have to cover (be open to) a charitible class , open to the public. I assume these families are unrelated. It would be better if the organization aimed to service a large amount of people. Maybe you are the first employee etc. They key to remember is once it's a NP, it's a public entity and you no longer own anything and you could even get fired by the board. The board members will have responsility for the organization (duty of care etc.) GL
2 votes
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1 vote · 5 comments
Requirement to register with state Attorney General's office as a charity in every state where you solicit donations?
r/nonprofit·18 days ago
Requirement to register with state Attorney General's office as a charity in every state where you solicit donations?
JV_CPA·17 days ago
Undertstood.. Very difficult for charities to operate rn.. Unfortunately state charity registrations are going to be more and more of a prob going forward. Good luck with things ...
1 vote
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1 vote · 11 comments
Requirement to register with state Attorney General's office as a charity in every state where you solicit donations?
r/nonprofit·18 days ago
Requirement to register with state Attorney General's office as a charity in every state where you solicit donations?
JV_CPA·17 days ago
yeah, this is going to be crazy, so when using those Fundraising platforms based in CA, even foreign state orgs have to register in CA ( this will affect you if you use Facebook, Network for Good, PayPal Giving Fund etc.) CA is forcing the Platforms to make sure your are registered in CA to use them etc.
2 votes
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1 vote · 11 comments
Requirement to register with state Attorney General's office as a charity in every state where you solicit donations?
r/nonprofit·18 days ago
Requirement to register with state Attorney General's office as a charity in every state where you solicit donations?
JV_CPA·17 days ago
But be careful, all those registeration companies want to register everywhere. That is their business. Best to figure out where you should /want to, register before even contacting that kind of compnay (there are many of them). I also recommend doing these yourself (orginally and annually). I know it sounds crazy but they will just ask you questions and fill out a form or put it in a website. And they will make mistakes. he accountant doing your 990 is prob better off doing the annual forms if you can't do them..
1 vote
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1 vote · 11 comments
Requirement to register with state Attorney General's office as a charity in every state where you solicit donations?
r/nonprofit·18 days ago
Requirement to register with state Attorney General's office as a charity in every state where you solicit donations?
JV_CPA·18 days ago
Be very polite.. the funder is prob correct, technically.....
State Charity registration (for Solicitation) has always been unclear and with the advent of Websites , apps , mobile etc etc , it became foggier. Firstly, there are some states with absolutely no Chairty Registration requirement ( maybe 10.. ) so those are clear.. The other states has some kind of statute regulating registration , but many have unclear language as to what is "online" Solicitation. If you go by the letter of the law, many states will require registration for just having a website. Some states have minimum thresholds. You would have to go to the state, look to see their requirements and look to how they define solicitation. (and many don’t have it defined🙃) Will you register everywhere? ofc not. There are def things that you would want to 100% register for. Home state, physically present, when throwing a fundraiser event (especially in CA) , direct mail campaigns etc. But, writing a letter to a foundation is soliciting. Speaking to a potential funder is soliciting.
Back in 2001 – there was an effort by the NASCO (National Association of State Charity Officials) to try to codify state regulations. They came up with internet solicitation Guidelines called the “THE CHARLESTON PRINCIPLES”. But except where a state law refences these Principals, they are only guidelines, not law. (I forget which - but I remember a few states do reference them). But many people out there will quote them as law and such.
https://www.nasconet.org/wp-content/uploads/2018/04/Charleston-Principles.pdf
What happens if you do not register in a state? This happens all the time, mainly in the formation state. Where a charity just doesn’t know they had to register and operates for years (they have their IRS 501 C(3) etc.,) – The state would basically say you need to register after the fact and file prior years returns and pay the state fees. This is normally the situation. It is similar when another state is involved. I have seen a lot of CA issuing letters to organizations that need to register, and they registered after the fact. So, there is no clear answer.
btw, registering in an additional state is not really a big deal administratively. Yeah, its crazy to deal with 20 states registration renewals each year. But they are using just a few questions and attached your Form 990. Some state have Audit (or review) requirements, but if you already have a CPA Financial Statement Review for your home state (like most do in NYS), its already done etc..
But my professional advice is to register everywhere you should, and operate 100% in compliance with all laws and regulations 😉 Also… the funder is always right ! lol
2 votes
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1 vote · 11 comments
For profit to non-profit conversion
r/nonprofit·19 days ago
For profit to non-profit conversion
JV_CPA·18 days ago
Just a note, Nonprofit , 501(c)(3) orgs are public entities, to serve the public by advancing their exempt purpose etc etc.. For profits, don't trechnically "convert" to Nonprofits. It is more that a new nonprofit or existing nonprofit , continues part of the For profit services because it fits with their mission. If the non profit is buying someing "real" like a building it make more sense. But if the nonprofit is not indepdendent (different board member from the owners of the for profit ) and the nonprofit pays the owners of the FP (no matter where teh funds come from), you run into Intermediate sanctions - Excess benefit transactions (i.e. massive penalties) - https://www.irs.gov/charities-non-profits/charitable-organizations/intermediate-sanctions-excess-benefit-transactions There could also be issues with your state charity regulator (AG etc). The main concern will be that , in substance, the FP is using a NP/501(c) vehicle to personally benefit. If this is viable, an existing , completely unrelated NP organization , that operates in this service area, would pay for whatever the FP is selling (clients I guess).
2 votes
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2 votes · 12 comments
Which state should I incorporate my nonprofit in?
r/nonprofit·20 days ago
Which state should I incorporate my nonprofit in?
JV_CPA·19 days ago
I advise against student organizations seeking formal organization of a nonprofit. Avoid if possible. As you see, forming is complicated , as is operating it forever (by future students i guess). See if there are any other existing nonprofits that can act as a fiscal sponsor (look this up), that may be a better option. Or , if possible , run the program under/through the school.
Anyway (1) you have to incorporate (2) you have to register for charity solicitation. Your program is in CA, you will have to do a full registration / setup in CA, regardless of where you incorporate. Unless you are operating and soliciting in a state that have no Charity Registration laws (which CA is not one) then you usually should just incorporate and form and register in the state you are operating in.
Worrying about the incorporation fees is a huge sign that you should not be doing this. There are much much greater costs and complications on the horizon.......
2 votes
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1 vote · 2 comments
Officer roles and the board questions.
r/nonprofit·20 days ago
Officer roles and the board questions.
JV_CPA·20 days ago
That is a matter of state law so you need to check Ohio NP laws: https://codes.ohio.gov/ohio-revised-code/chapter-1702
Even if not mentioned, that is just not a good idea. You do need 3 board members, and preferable they will all be independent and you can then have a pres, treas and secr, at least on paper. in very small organization's director roles are not very delineated anyway.. (and you should prob have more than 3 directors aka Board Members, and at least 3 independent) . Look at form 990 Section VI. you will see they ask a lot of questions and there are answers that look better than others.. (but not IRS requirements etc...)
7 votes
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2 votes · 14 comments
Volunteer Hour Tracking
r/nonprofit·20 days ago
Volunteer Hour Tracking
JV_CPA·20 days ago
Page 1 of Form also 990 asks "Total number of volunteers" - From a Financial perspective, this fills the gap when an organization is not reporting ( much) Salary (W2) or compensation (1099) anywhere. Like, how does this org fullfill its mission without people working there etc. A reminder , that Volunteers time is not reported on the form 990 or the financial statements (as income/expense). But inkind professional services (lawyers, CPAs, doctors) are reported as inkind services for GAAP financials (but not on form 990). You can look up what qualifies for this and how to value it. I do count BOD and founders, and anyone else that is not compensated, as a volunteer (Form 990 - page 1).
2 votes
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4 votes · 6 comments
Can a non-profit own a food Co-op?
r/nonprofit·22 days ago
Can a non-profit own a food Co-op?
JV_CPA·21 days ago
Sounds like a for profit business not doing well and then trying to personally benefit from NP status in a number of ways. There are too many reasons this is a bad idea to list.
1 vote
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9 votes · 20 comments
Small nonprofit youth sports org issues
r/nonprofit·22 days ago
Small nonprofit youth sports org issues
JV_CPA·22 days ago
yeah - agree with all that said to 🏃🏃🏃Run - Just quit the board - your daughter will be done with this soon.
Are we legally allowed to continue fundraising? >>> Maybe - states regular Solicitation. So you need to check there. But - right - donations won't be tax deductible
-$500 to our org’s founding member (founded over 20 years ago) who is dealing with cancer. Is this even allowed? Not really - Actually charities can't make "donations" - they can make grants , that fullfill their exempt purpose. So grants could be like a donations. but your exempt purpose does have anything to do with Cancer. (insiders could get grants under certain situations, but it is irrelevant here)
-At every board meeting I have been to, not once has it been disclosed how much money we actually have in our bank account. We also never receive meeting minutes.>>>>Financial information - not just the $ in the bank account should be avaiable to the board. Minutes should be available and you will always approved teh prior meeting minutes etc.. but this is mess.
So many situations like this out there.. Literally nothing you can do anbout this, unless you want to dedicate your entire life to it 🏃🏃🏃🏃🏃🏃🏃
3 votes
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7 votes · 15 comments
Non Profit Filing Courses
r/nonprofit·24 days ago
Non Profit Filing Courses
JV_CPA·23 days ago
Not really on Linkedin.. but this is a good site https://www.nonprofitaccountingbasics.org/ by the GWSCPAs i wrote something on there I think.
1 vote
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1 vote · 7 comments
Non Profit Filing Courses
r/nonprofit·24 days ago
Non Profit Filing Courses
JV_CPA·24 days ago
I doubt there are any. Best scenario is working for a number of years for / with someone experienced in NPs and Form 990 (that knows what they are doing 😏) but.. the key to really doing it right is understanding Nonprofit accounting as well. I guess you may be doing write ups, or year end closing with the tax prep. NPs are really specialized in accounting and Tax prep, not many do it well, especially smaller firms serving small NPs.. but the Form 990 instructions are excellent. You can find an explanation or info on almost anything in there . Good Luck 🙌
4 votes
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1 vote · 7 comments
Rental Declared Value
r/nonprofit·26 days ago
Rental Declared Value
JV_CPA·24 days ago
I started a rental business <> Should be organized a nonprofit with a group of people (Board)
Celebrities donated clothing = They get a a donation of FMV of item on date of contribution, it is up to them to asssess the value , the Nonprofit is not involved in that. (they can get an appraisal if they want). Deduction should be limited to their basis in the contributed property (usually cost)
All the info you need on this is here: https://www.irs.gov/pub/irs-pdf/p526.pdf
All the funds generated (contributions or otherwise) have to be used to full your charitible mission / exempt purpose
1 vote
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1 vote · 3 comments
Liability insurance for 401C?
r/nonprofit·1 mo. ago
Liability insurance for 401C?
JV_CPA·1 mo. ago
I think you mean 501(c)(3) - I see a lot of NPs 501(c)(3) use https://www.phly.com/
2 votes
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1 vote · 3 comments
ED Transition during Job Offer
r/nonprofit·1 mo. ago
ED Transition during Job Offer
JV_CPA·1 mo. ago
Also check the financials of both organizations, which you should be able to find publicly. TO make sure things (i.e. $$) are sustainable at both orgs..
⬆️Cash ⬆️ Investements⬆️ Unrestricted Net assets ⬆️reserves etc 😀 ⬇ Debt , loans etc 😒
Also read the financials statement notes for anything weird. Major lawsuits etc.
1 vote
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7 votes · 10 comments
EIN not popping up
r/nonprofit·1 mo. ago
EIN not popping up
JV_CPA·1 mo. ago
I would assume your were a nonprofit. Call the IRS - I would call the exempt org # 877-829-5500. Tell them to look up your Org by EIN. See what the status is. If your were a NP, you are prob revoked (for not filing annual forms). You prob need to start a new Nonproft organization, but that is too much of a hassle, even for a simple group. You will not be able to open a bank account otherwise... If you need to have a bank account and make transactions. checks etc, i would go the the university (who ever is in charge of clubs) and ask if you can have an account with the school. (or maybe it's teh bursar office). Then you can depsoit money with the school and prob have to fill out payment vouchers to get checks from the college.. In my experience, that is how must student clubs/groups work. But some larger ones (like fraternities) do have their own independent organizations and have a bank account ( and all the other headaches etc)..
1 vote
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4 votes · 6 comments
Idea Feasibility
r/nonprofit·1 mo. ago
Idea Feasibility
JV_CPA·1 mo. ago
I see people saying "starting a nonprofit" in the same way as they would say "start a business". For sure, some things could be a nonprofit structure or a for profit struction (schools, service provider, like therapy etc) but.... you don't start a nonprofit, you organize one, by bringing a board of directors together to govern it. That BOD = your future bosses, that can basically fire you from what you started. Also you cannot "pay yourself", the independent board members (not related to you and not yourself) will decide and approve your pay. (see conflict of interest policies - see Form 990 part VI - section B). Plenty of founders have actually left or got fired from an organization that they basically started (many times unjustly) To get the ball rolling, find a Board of Directors (even informally at first) that share your vision and that you jive with. The should mostly be independent of you and each other (not relatives etc) This paperwork stuff, incorporation , registrations, come later IMO..
2 votes
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5 votes · 19 comments
Nonprofit based in Tennessee has to register with California for FB fundraisers?
r/nonprofit·1 mo. ago
Nonprofit based in Tennessee has to register with California for FB fundraisers?
JV_CPA·1 mo. ago
The wording is a little janky. They are trying to say you need to be fully registered (good statnding) in CA & IRS. And then not get revoked or loss status and be on a "Block" list. CA is the most agressive state in making foreign (out-of-state) orgs register in CA. This AB 488 law is the latest in that effort. The FTB part is the most agressive imo. Out of State Charities soliciting in CA had to always register with the AG and file RRF-1 annually. But some did not have to register with FTB (and file 199) because they did not do business in the state (under Economic Thresholds, not presence etc). Seems like if org want to use online fundraisers, they will have to register for both.
A lot of states "techinically" require registration for online fundrasing (unless you somehow exclude their state). But CA is regulating these platforms, since they are in CA, forcing them to basically force all orgs to reg in CA. The orgs "technically" should have been registered in CA for soliciting online (even having a website solicition) but there was not way for CA to enforce this. So they are going through the platforms.
CA can't do this to fundrasing platforms out of CA (I don't think) . And you may even see some platforms move out of CA ¯\_(ツ)_/¯
2 votes
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3 votes · 3 comments
Starter accounting software
r/nonprofit·1 mo. ago
Starter accounting software
JV_CPA·1 mo. ago
Well - what QB does well is making bookkeeping as easy as it could be. Easiest learning curve etc. Also has enough power to sustain unless you really grow. 100 Million revenue orgs would be like , qbooks is not good etc. but they are playing a different game than 99% of NPs. Also quickbooks does NOT do Fund Accounting. NPs track funds (donor restricted fund, board designated funds etc) but don't normally use what was "fund accounting". Fund accounting is not GAAP since 1993 (with SFAS 116&117). You will need GAAP accounting for Form 990 and any Audit/Reviewed financials statments that the state or funders required etc. But on that front, Qbs does not have a real mechanism for tracking the funds you need to track over multiple years (mainly donor restricted funds). But it is easy enough to extract yearly information form quickbooks and setup to track these amounts in excel.
3 votes
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3 votes · 11 comments
Starter accounting software
r/nonprofit·1 mo. ago
Starter accounting software
JV_CPA·1 mo. ago
Yep - and with Quickbooks online they don't have to neccessarily be from your area. Unless you need other things done onsite etc.
1 vote
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3 votes · 11 comments
Starter accounting software
r/nonprofit·1 mo. ago
Starter accounting software
JV_CPA·1 mo. ago
This ☝️ + QBO will suit you for a very long period of your growth (prob for ever) and with anything but Qbs you will have a harder time finding a bookkeeper (which is already hard). Techsoup + QBO 💯
3 votes
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3 votes · 11 comments
Donation from PAC?
r/nonprofit·1 mo. ago
Donation from PAC?
JV_CPA·1 mo. ago
It is basically a contribution from Company X. If you would normally accept a contribution from Company X - it should be fine. Company X has an incentive for people to donate to the PAC. Company X probably already has a charitible giving program so this perk for their PAC contributors doesn't really cost them anything because they prob already give out large sums to Charities etc. For your records, and Form 990 Schedule B, it's a contribution from Company X. But you could send a thank you (not a tax acknowledment letter) to the person (employee) that directed this contribution to you.
3 votes
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3 votes · 2 comments