The New England Not-For-Profit Accounting Advisor

Competing for Talent as a Not-for-Profit Organization

Posted by Angie Salmon on Thu, Feb 26, 2015 @ 02:00 PM

NFP_competing_for_talentRetaining and recruiting the right people is an ongoing struggle for any entity, and not-for-profit organizations may find competing for talent especially difficult. Your corporate counterparts can mobilize a dedicated recruitment staff to fill positions and often offer employees higher compensation and expanded career opportunities.

Not-for-profit organizations can use a number of strategies to level the playing field in the war for talent, however. From using social media tools and proactive tactics for recruiting to creating an environment that fosters employee engagement, not-for-profits can amp up their employee retention and recruitment strategies – often at a low cost.

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Tags: non-for-profit, competing for talent

Does the Housing Provided to Your University’s President Pose a Tax Risk?

Posted by Richard Scoresby on Thu, Feb 26, 2015 @ 12:00 PM

tax_riskPresidents of educational systems often accept free or reduced-rate housing when they accept their position. Located on or near campus, the residences serve as a fringe benefit to the leadership role. In most cases, the value of the home is not included as part of the employee’s compensation package.

Section 119 of the Internal Revenue Code (IRC) allows university- or college-provided housing to be an income-tax-free fringe benefit for employees if the arrangement passes a three-part test. Recent movement by the IRS, however, suggests the three-part test may be more difficult to meet than you may think.

The IRS recently conducted an audit of Ohio University and found that the housing provided to its president did not qualify for tax-exemption. The IRS said the value of Roderick McDavis’s 7,000 square foot home, located on Ohio University’s campus, should be included as part of his eligible compensation and subject to income and payroll taxes. It is still unknown which part of the three-part test the university failed.

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Tags: Richard Scoresby, university, tax risk

Implementing the Uniform Grant Reform Guidance

Posted by Michelle Spriggs on Tue, Feb 24, 2015 @ 12:18 PM

If you receive Federal grants, now is the time to evaluate how you manage them. December 26, 2014 was the start date of comprehensive grant reform as a result of 2 CFR 200: Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (Uniform Grant Guidance), which affects all nonfederal agencies that receive grants. Often called the “super circular,” it replaces rules in Office of Management and Budget (OMB) Circulars A-21, A-50, A-87, A-89, A-102, A-110, A-122 and A-133.

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Tags: Michelle Spriggs, uniform reform guidance

FASB Eliminates Extraordinary Item Requirements

Posted by Mark Winiarski on Fri, Jan 30, 2015 @ 11:30 AM

As part of its efforts to simplify financial statement reporting, the Financial Accounting Standards Board (FASB) recently streamlined its treatment of extraordinary items. Entities will no longer have to separately classify, present and disclose extraordinary events or transactions.

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Tags: ASU, not-for-profit, FASB, Mark Winiarski

Best Practices in Accounting for Fundraising Costs

Posted by Heather Hernandez on Fri, Jan 30, 2015 @ 09:05 AM

Many not-for-profit organizations rely on various methods of fundraising to further their mission and tax-exempt purpose and to ensure a sustainable future. As such, they engage in fundraising efforts, either using internal resources or by using the help of an outside, professional fundraiser, to attract potential donors.

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Tags: not-for-profit, fundraising, Heather Hernandez

Mitigate Your Risk of UBTI

Posted by Joe Giso on Tue, Jan 27, 2015 @ 02:05 PM

 
A recent report from the IRS suggests unrelated business taxable income (UBTI) for tax-exempt organizations will be a key focus of IRS scrutiny as it pursues new government revenues.
 
Not-for-profits earn UBTI from a regularly carried on trade or business that is “not substantially related” to their purpose. Activities qualify as substantially related (and therefore tax-exempt) if a causal relationship exists between the activities generating income and the accomplishment of the entity’s defined mission. Read More

Tags: not-for-profit, UBTI, Joe Giso

Protect Your Executives and Board from Excess Compensation Risks

Posted by Priya Kapila on Fri, Jan 23, 2015 @ 09:41 AM

Not-for-profits must closely monitor the line between reasonable and excessive compensation. With the increasing IRS scrutiny on compensation levels, not-for-profits must be vigilant to ensure their pay and other transactions to key personnel remain reasonable.

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Tags: not-for-profit, executive compensation, compensation risks, Priya Kapila

2015 Preview: Not-For-Profit Accounting and Tax Changes

Posted by Mike Burns on Thu, Dec 18, 2014 @ 09:06 AM

Not-for-profits experienced relatively few changes impacting accounting and tax reporting in 2014. It seems 2015 will not be as quiet based on items proposed and those expected to be proposed for the future. With the consolidation of the OMB Circulars, new revenue recognition standards and FASB’s financial statement project, not-for-profits and educational organizations should keep an eye on how these items may impact measurement, management and disclosures. Some of the key items that should be on your radar are as follows:

ASU 2013-06, Services Received from Personnel of an Affiliate

This accounting update affects fiscal year ends ending June 30, 2015 and later. It requires not-for-profits to recognize services provided by their affiliated entities effectively at the cost of those services. If recognizing at cost will significantly overstate the value of the services received, then the not-for-profit may elect to recognize at either the cost recognized by the affiliate for the personnel providing the service, or the fair value of the service. While this will not affect the bottom line, it will provide more transparency relative to dependence on such services and their magnitude. While many organizations have long billed for such services, this requires those who did not book such to reflect the economics.

Most entities getting such services will increase contribution revenue and a corresponding expense with healthcare organizations taking a somewhat different approach.  

See the following for more information:

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Tags: Accounting and tax changes, Mike Burns, 2015 Tax Changes

2014 Schedule A Expands Reporting Requirements for Supporting Organizations

Posted by Betty Isler on Wed, Dec 17, 2014 @ 10:00 AM

Tax filing may be a longer process for supporting organizations this year. The recently released 2014 Form 990, Schedule A, Public Charity and Public Support indicates 509(a)(3)s will face additional reporting requirements. Organizations that are not functionally integrated with the public charities they support will face the brunt of the additional requirements, which come as part of the changes required by the Pension Protection Act of 2006.

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Tags: Form 990, Betty Isler, Schedule A

Why Your Not-for-Profit Needs a Business Continuity Plan

Posted by Mark Madar on Tue, Dec 16, 2014 @ 12:00 PM

Create an actionable plan that is both easy to implement and cost effective.

Disasters come in a variety of forms, from tornados and winter storms, to water main breaks and other miscellaneous building damage. Even minor incidents such as power outages and technical glitches can paralyze not-for-profit organizations if they are not adequately prepared. Business continuity plans help keep your not-for-profit organization afloat in the wake of a disruptive event. Disaster recovery and continuity plans can prevent unnecessary costs, protect valuable data and help your not-for-profit quickly respond to the crisis and resume its operations after the event has occurred. A comprehensive plan can also reduce your insurance costs. Insurance companies often reward organizations that take proactive steps to mitigate their risks with lower premiums.

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Tags: not-for-profit, business continuity planning