The New England Not-For-Profit Accounting Advisor

If your nonprofit operates a retail venture, like a gift shop for example, tax issues can become tricky and you may be in a position where you are jeopardizing your tax exempt status.

The key determinant: the degree to which the retail activities are considered to be in support of the organization’s charitable mission and that there is no substantial nonexempt commercial purpose for these activities.

The Financial Accounting Standards Board’s (FASB) Not-for-Profit Advisory Committee (NAC) in September 2013 recommended changes in accounting rules designed to allow not-for-profit organizations to better report their finances.

FASB tentatively decided to merge the three existing net asset classes currently required for not-for-profit financial reporting into just two: those with donor restrictions and those without.

Allocation to alternative investments in the endowments and pension space has grown tremendously in the last 20 years [1]. Between 1992 and 1995, flow of funds into alternative investments grew by an average of $11 billion per year, amounting to a 92% overall increase in allocation. Still, general commitment to alternatives took up only 5.5% of the overall assets in 1995 [2]. 17 years later, the 2012 NACUBO-Commonfund Study of Endowments reported an average of 54% of assets committed to alternative strategies. This article delves into the motivations that lie behind such an increase in investing in alternatives, as well as a closer look at different types of alternative investments and the risks associated with them.

For more than a decade, colleges and universities have been required to file Form 1098-T, which provides student account information to students, families and the IRS, but uncertainty still reigns regarding the completion of this annual task. To help “simplify perennial areas of confusion, as well as promote common industry practices in higher education” the National Association of College and University Business Officers (NACUBO) recently released Advisory Report 2013-2, designed to clarify the two most challenging components of the form: which types of institutional charges to report in Boxes 1 or 2; and how to report grant aid in Box 5.