Category: Not-for-Profits

  Every not-for-profit develops a culture over time, often defining the organization. However, even if your group’s been successful in the past, a change in culture could be a change for the better. Warning Signs to Observe First, does your culture need an alteration? It’s often difficult to know for sure, but there are several warning signs that change might be warranted. For instance: Lack of commitment. It’s important for the people working for your organization to believe in its… Read more ›

  For charitable donors, the Tax Cuts and Jobs Act (TCJA) provided some tax breaks and took away others. Here’s what charity-minded individuals need to know. Increased Charitable Deduction Limit Under prior law, deductions for cash contributions to public charities and certain private foundations were limited to 50% of your adjusted gross income (AGI). The TCJA, which passed in December of 2017, increased the deductible limit to 60% of AGI for the 2018-2025 tax years. Deductions that are disallowed by… Read more ›

It’s an age of personal responsibility. Even if your not-for-profit‘s board members do everything in their power to make good governing decisions, legal liability can potentially lead to their financial ruin. Here’s how to protect your board. It’s personal Being an effective board member takes time, effort and diligence. Unfortunately, even dedicated board members may be at financial risk if a disgruntled party sues and holds them individually liable for their actions. Suppose you run a mentoring program and a… Read more ›

It’s critical for your organization to keep accurate tax related documents and maintain a good recordkeeping system. This way, you can respond to an IRS audit or prove compliance with various laws should it become necessary. However, you don’t have to retain every paper document or electronic file that crosses your desk. The IRS requires organizations to keep certain essential documents on file. These records back up accounting entries, reported taxable income, expenses and deductions. For example, you must keep… Read more ›

So you think investment policies are only for not-for-profits with millions to invest? Not true. If your organization holds funds in reserve — for example, to cover emergencies or meet long-term goals — it’s prudent to have investment policies. Such policies will help ensure that you manage reserve funds responsibly according to their purpose and take steps to minimize investment risk. Pooling Funds Creating investment policies begins by defining the purpose of different funds or investment pools. Some not-for-profits maintain… Read more ›

Traditionally, 403(b) plans have been the qualified retirement plan of choice for not-for-profits. These plans were established for the exclusive benefit of tax-exempt organizations. However, a not-for-profit now have other options as well. Even if you continue to prefer a 403(b) plan, as many nonprofits still do, it pays to review and weigh the benefits of other types of accounts. Four Types A not-for-profit generally may choose from the following four plans: 1. 403(b). The 403(b) plan is comparable to… Read more ›

Are you feeling generous? Qualified charitable contributions can be rewarded with sizeable tax breaks during the second calendar year of the COVID-19 pandemic. Recent legislation includes the following four temporary tax law changes that are designed to help individuals and businesses that donate to charities through the end of 2021. 1. Deductions for Non-Itemizers In the past, you could claim significant itemized deductions on your federal income tax return for contributing money or property (or both) to qualified charitable organizations… Read more ›

Audits have become more important due to increased public and government scrutiny of not-for-profit organizations, their management and their boards. Audits not only provide you with a fair assessment of your organization’s financial health, but also can reveal vulnerabilities such as weak internal controls, insufficient cash reserves and poor investment policies. Perhaps most important, regular audits reassure your donors, members and other stakeholders that you run a fit organization. Ins and Outs Audits come in two forms, serving different purposes:… Read more ›

Councilor, Buchanan & Mitchell (CBM) is scheduled to sponsor and present at the 2021 Greater Washington Society of CPA’s annual Nonprofit Symposium. The GWSCPA nonprofit symposium, to be held digitally from November 16-18, brings together representatives from the not-for-profit sector as well as members from the accounting profession who serve the industry for two and a half days of learning and connecting. Participation provides access to a community of resources that will extend far into the next year. CBM Partner… Read more ›

Most not-for-profit executives are aware of the prohibition against private inurement. Generally, not-for-profit directors and executives — and their family members — aren’t allowed to personally benefit from their positions while putting their organization at a disadvantage. Penalties for violating the private inurement mandate could include financial sanctions for violators and, in the rare worst-case scenario, loss of the organization’s tax-exempt status. Usually, violations involve large organizations, yet smaller charities aren’t immune. But whether a not-for-profit is large or small,… Read more ›