The New England Not-For-Profit Accounting Advisor

Independent contractor or employee? The question has entered the ring after late-night comedian John Oliver criticized World Wrestling Entertainment for not considering its star wrestlers employees.

He makes a compelling case on his show, Last Week Tonight, that WWE wrestlers should be considered employees who are entitled to benefits such as health insurance, paid time off, and retirement plans. Both classifications of workers are important to the economy, especially as an estimated 56.7 million Americans are choosing to freelance.

Topics: FICA, not-for-profit, nonprofit, Independent Contractor

Economics 101 teaches us that time can be quantified in dollars and cents, and that if you want to measure the value of your time—i.e., your opportunity cost—start by looking at your hourly wage. Applying the opportunity cost idea to audit committees can make an audit committee seem like a hugely expensive venture.

Topics: not-for-profit, Audit Committee, NFP, nonprofit, not-for-profit board of directors

Not-for-profit organizations have a long-standing debate with regulators about whether revenue generated by certain organizational activities should be taxable. In the 1940s and the 1950s, the IRS noticed that more and more not-for-profits were reporting non-charitable business income alongside their charitable revenues. These organizations were applying their tax exemption to revenues that would otherwise be taxable as corporate business income. There were growing concerns that this created a competitive disadvantage for their for-profit counterparts that were required to pay tax on identical revenue streams.

Topics: tax-exempt, not-for-profit, IRS, UBTI, unrelated business taxable income, NFP, nonprofit, UBIT, Lisa Burke

Your not-for-profit organization’s internal and external stakeholders are growing more sophisticated. They want to know that your not-for-profit is managed responsibly, meets its mission and that it is both efficient and resilient to its risks. Board members, employees, donors—and even to an extent, the public and the media—want to see how well your organization is being run.

Topics: enterprise risk management, not-for-profit, NFP, risk management, Not-For-Profit Risk Management, ERM

The one-year countdown to the mandatory 403(b) plan document restatement deadline is officially underway. All organizations that sponsor 403(b) retirement plans must restate their plan documents by March 31, 2020, using either the IRS’s pre-approved document or an individually designed plan document.

Topics: retirement plans, Non-profits, NFP, 403(b) programs

Managing a benefits program means managing change, and that change is particularly abundant in today’s health care environment. At the same time, employers must ensure their benefit offerings serve the evolving needs of employees and their families and support the organization’s short-and long-term objectives.

Topics: not-for-profit, Health care, competing for talent, nonprofit, not-for-profit talent, healthcare, Employee Benefits

In this day and age, it’s not unusual for company decision-makers to become furious with insurance carriers for frequent and substantial health benefit plan cost increases. Even more infuriating, carriers are often unwilling to supply any reason for such a rate action by not providing indication about medical claims, high amount claimants, prescription drug usage, and so on. This happens for many companies with 50-to-250 employees.

When companies are willing to implement programs that help employees reach and maintain personal health, it’s time to get creative. Controlling costs is possible when you look for innovative risk management tools. One of those tools is self-insurance, and another tool is a “captive” insurance company. Captives afford an additional layer of risk protection beyond self-insurance. And, for small-to-mid sized employers, captives can be especially useful tools.

Topics: not-for-profit, employee benefit plan, Health care, Lower Benefit Costs, health insurance, captive insurance, Joe Ellis

When it comes to what not-for-profit organizations should pay their top executives, the “instructions” are not always clear or obvious. The directive is that compensation should be “reasonable”, but reasonable may mean different things depending on who you ask. Your board could have an idea for a figure that is convenient for the budget, but would not attract the quality candidate that your organization needs to further its reach. On the other end of the spectrum, your compensation package may be outsized for the type of organization you operate, which risks drawing the ire of regulators and the community you serve.

Topics: not-for-profit, NFP, executive compensation, compensation risks, retain talent, Hal Wallach, not-for-profit salaries

Not-for-profit organizations that hold collections received some much-needed clarification from the Financial Accounting Standards Board (FASB) that will eliminate a diversity in practice. The clarification arrives in the recently issued Accounting Standards Update 2019-03, Not-for-Profit Entities (Topic 958): Updating the Definition of Collections (ASU 2019-03).

Topics: not-for-profit, FASB, Mark Winiarski, Financial Accounting Standards Board, U.S. generally accepted accounting principles, collections, American Alliance of Museums, U.S. GAAP

As not-for-profit organizations adopt the new financial statement presentation changes, they may want to take another look at their accounting for fundraising costs. Not-for-profits have some flexibility when it comes to allocating costs to fundraising efforts.

Topics: not-for-profit, financial statements, fundraising, NFP, Heather Hernandez, program costs, accounting for fundraising, joint cost allocation