Directors and Officers (D&O) coverage plays a vital role in an organization’s risk mitigation strategy, but for some not-for-profits, the insurance coverage may go under the radar. Executive leaders and board members should understand the basics of D&O coverage so they can carry out your fiduciary duties, as well as protect personal and organizational assets. The following provides a primer for what a not-for-profit’s C suite and board should know.
Topics: Non-profits, Not-for-Profits, NFP, D&O Insurance, Raul Socha, Directors & Officers Insurance, D&O Coverage
It is not possible for not-for-profit organizations and higher education institutions to prepare for all the risks they could face in the coming year. At some point, you have to make decisions about which risks have the highest chance of occurring or would have the highest monetary or operational impact if the risks happened.
Topics: not-for-profit, NFP, risk, risk management, Not-For-Profit Risk Management, risk mitigation
Chief financial officers (CFOs), boards, and donors all want to see their not-for-profit organizations manage their financial resources well. They want as many dollars as possible put toward the programs and activities that further the organization’s mission. In other words, they want overhead and operating costs to be lower than program-related expenses. The question not-for-profits must ask is: are they setting the bar for overhead expenses too low?
Topics: Non-profits, Not-for-Profits, NFP, operating environment, tracy mcdonald, operating costs, overhead costs, Overhead Caps
The landscape has shifted for charitable giving. As individuals feel the effect of the Tax Cut and Jobs Act (TCJA) of 2017 on their personal tax situation, charities making requests for donations will need to respond in kind. Development departments are having to adjust their “ask” to meet the challenges brought on by the reduced tax incentive to make charitable gifts. Donors often respond with their hearts and minds when giving to their favorite causes, but financial reality will play an important role when deciding where to spend their limited charitable dollars.
Topics: charitable donations, Amy O’Loughlin, Not-for-Profits, nonprofit, benchmarking, charitable giving, Charitable contribution planning, TCJA, donors, artificial intelligence
Rules requiring certain not-for-profits to report the names and addresses of major donors will remain in place for the time being. A recent ruling from the U.S. District Court of Montana set aside and declared unlawful the Revenue Procedure that would have exempted some types of not-for-profits from the requirement to report the names of their major donors in their annual information filings.
Topics: not-for-profit, Taxes, Bill Smith, Donations, donors
Not-for-profit organizations must be vigilant and careful shepherds of their monetary resources. Sometimes sound financial management takes some outside-of-the-box thinking. Not-for-profits do not have the same avenues to offset rising operational costs that for-profits might. They cannot, for example, raise additional revenue through price increases, product or packaging enhancements, or even service line extensions.
Topics: non-for-profit, Non-profits, nonprofit, Mark McCarthy, CCR, Construction, Construction Cost Review
Cyber criminals have gotten wise to the fact that not-for-profits sit on a relative goldmine of sensitive data, including employee health information, Social Security numbers, donor information, and billing information.
Topics: not-for-profit, NFP, cybersecurity, cyber attacks, Ray Gandy, cyber security, Donor Information
Not-for-profit organizations drew the short end of the stick when the new tax law commonly known as the Tax Cuts and Jobs Act (TCJA) made parking expenses incurred on behalf of their employees a taxable increase to unrelated business taxable income (UBTI). Commercial enterprises were equally affected by this law change, but for many not-for-profits, the change comes as a shock. The UBTI inclusions are likely to lead to tax bills at year-end, which is particularly surprising for organizations that historically had no UBTI. Fortunately, the IRS heard the collective pleas for change, and may be remodeling its approach to give not-for-profits some relief.
Topics: not-for-profit, NFP, nonprofit, Tax Reform, TCJA, parking expenses
Not-for-profit organizations, you cleared the biggest hurdle to revenue recognition adoption and busted some of the important myths. Now comes the hard part: a formal, initial impact assessment.
In the race for ASC Topic 606 adoption, your assessment of how revenue recognition affects your organization serves as your course map. It highlights the contracts and arrangements that will experience some of the biggest changes under the new accounting standard, so that you can see other potential barriers between your organization and the finish line.
Topics: Revenue Recognition Standard, not-for-profit, Mark Winiarski, Revenue recognition, revenue recognition for nonprofits, ASC Topic 606
The countdown to revised ERISA employee benefit plan auditing standards officially began this summer when the AICPA’s Auditing Standards Board (ASB) released Statement on Auditing Standards No. 136, Forming an Opinion on Employee Benefit Plans Subject to ERISA (EBP SAS). The new standard takes effect for plan years ending on or after Dec. 15, 2020. Generally, it will affect audits of calendar year 2020 plans subject to the Employee Retirement Income Security Act of 1974 (ERISA) that are performed in 2021.
Topics: not-for-profit, NFP, employee benefit plan, nonprofit, Form 5500, ERISA, EBP audit