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r/nonprofit
Are admin and overhead rate the same thing?
JV_CPA·2 days ago
<<<<<<<TLTR ANSWER>>>>>> Admin, when talking about Functional Expense allocations may not coincide with the Term “overhead” use by a funding source. Find out what the grant means by Overhead, in their case >>>>>>>>
Yep, there is no perfect accounting firm and maybe the specific accountant you were dealing with may think that they understand something 100% - but 30 years later they will admit they didn’t know much back then [Raising my hand] : )
The problem is that there are different forces at play.
The first and foremost, in the nonprofit world , is the functional allocation percentages. You see these function exp breakouts on your IRS Form 990 and your financial statements. Program Exp, Mang & General (aka Admin) and Fundraising. There is a slew of guidance on breaking these out in GAAP (Generally Accepted Accounting Principles) and by the IRS (form 990 instructions-rev rulings etc). This is the Percentage the “Charity Rating Agencies” use. Funders and grantors look at this etc. You have heard of Guidestar, Charity Navigator, Charity Watch etc. (I dislike all this agencies…). This is the thing your accountant was explaining. As with all allocations there is alot of assumptions and flexibility (i.e. how much of Salary, Rent, Tech cost, etc should be in Program vs. admin) In smaller nonprofits , so much is allocated because everyone does everything. You know what I mean… So that is that.
When dealing with some grants (especially govt grants) or in some other places, someone may ask about overhead (or even use the would Admin, but in a different light). This really could vary from thing to thing. But this Overhead and the Function Expense allocation (above) may not coincide. For example, part of your occupancy (rent) will definitely be in Program Expenses. But a specific grant or government funder may consider occupancy 100% overhead. Overhead, in these circumstances, really pulls out anything that is not a very direct cost. But you have to look at the specifics of whoever is asking. There could still be allocations. But different. Maybe a grant allows salary of a specific person (executive director) to be max 10% allocated to program (and the rest be Overhead).
Since Overhead is not Standard, you must look at the definition the specific grant is using. A good tool to figure out what a specific funder means by overhead , is to find the report you will send them (they will prob require a qtly or annual report of some sort). That is what they will look at to see if you are meeting requirements. Find those instructions. That will explain what overhead is in this case. You don’t want to spend too much time on grant applications, so use this info and any other info you can find (guidance from them) and make some guesses (I mean assumptions) that lean toward less overhead. If you get the funding, you will prob be able to meet there requirements. I know this is foggy, but…
Sounds like your accounting firm could be fine. You are better off finding info and help in these respects from networking with people from other Organizations that deal with the same type of funding sources (EDs, CFOs, Accountantss of those orgs etc..) JV
6 votes
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12 votes · 13 comments
Question regarding loans and 990
r/nonprofit·5 days ago
Question regarding loans and 990
JV_CPA·5 days ago
These are 2 separate transactions. You can consider them unrelated.
LOAN: record the loan received in 2023. Debit cash. Credit Loan payable 250k. Record loan repayments as they happen, breaking out the interest from the principal as you would normally. The only item affecting P&L is the interest. Your 12/31/23 balance sheet (assuming calendar year) should reflect the loan balance at that point, reconciled to the December loan statement.
250k GRANT: this is a cost reimbursement contract (CRC), so you should account for it like that. Usually, I see that a CRC would allow you to bill them when expenses incurred (services performed) but the grant payment received happens months later. If that is your case you would have a grant receivable (asset) and grant income equal to the amount of expenses incurred in 2023:
Assuming all 250k was used in 2023 it would be Debit grants rec. 250k.
Credit grant income 250k (2023)
Then when you get the grant $ in 2024, Debit: cash 250k Credit: Grant rec 250k
If for some reason this contract's condition is that you pay the contractors first (like you said) before you have rights to the grant, then do this:
in 2024 , after you pay the contractors: Debit grants rec. 250k.
Credit grant income 250k
Then when you get the grant $ in 2024, Debit: cash 250k Credit: Grant rec 250k
I am assuming it's the first case , where your organization's income will match your expenses. Because in either case you will have the expenses in 2023. Whether paid in 2023 or as an accounts payable at the end of the year (like your case).
But the receipt of the loan did not create your organization's liability, the performance of the services created the liability...
Jv
9 votes
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4 votes · 5 comments
Working with a PAC??
r/nonprofit·6 days ago
Working with a PAC??
JV_CPA·6 days ago
Also you should see what your board thinks first.
2 votes
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5 votes · 16 comments
In kind donations
r/nonprofit·9 days ago
In kind donations
JV_CPA·8 days ago
That is prob correct (what you read). But there are 2 things at play. When you read about how the charity does not set a value, that is for Acknowledgement letters. The charity does not give a value on donated items (non-cash) etc to the donor. You are not allowed to mention a value in the ack letter. [& the value to the Donor and the value to the charity could be very different]
People (Donors) estimate their own value on noncash donations(for their personal taxes) and sometimes will need to support that with an appraisal.
BUT: For the charities internal accounting (form 990 or GAAP financials) the charity will report the noncash contribution at Fair value using some reasonable method (like in my previous comment). This is the value to the charity , not the Donor (e.g. a Fur Coat donated that will be given away to disadvantaged people, will be valued the same as any other coat.)
There are special rules if a donated item is to be resold (like car donation programs...)
Donated auction items are valued at the amount they sold for in the auction (per Form 990 instructions) . (GAAP could be a bit different) JV
4 votes
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11 votes · 12 comments
Is it ok to file a 990-N if we have previously filed a 990-EZ
r/nonprofit·15 days ago
Is it ok to file a 990-N if we have previously filed a 990-EZ
JV_CPA·9 days ago
I kinda agree with the sentiment of filing the 990EZ. Not because it's required, but because it will be your only reporting form you can show a perspective funder or for a grant application. Understood about the cost of the preparation etc. So the 990N is obv easier to do.
You should be able to switch to the Form 990N , but , if you (or if your accountant) get some kind of error, saying you can't file it through the electronic system, you may have to call the IRS Efile unit and tell them to change your account to be able to file the 990N. I have seen this happen when an org switched to 990N from 990EZ etc.
1 vote
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1 vote · 3 comments
In kind donations
r/nonprofit·9 days ago
In kind donations
JV_CPA·9 days ago
You may not need to put that in your Budget, as with many non-cash items. But for Accounting (bookkeeping) you should value the Food received per pound (a lot of orgs use figures from Feed America or similar studies, at around 1.75 per pound.) I would make an account Food Donations -Noncash. You can book the other side to Food Distributions Expense. If there is a material amount in your inventory, you can adjust for that at year end.
So it looks liek you will have a monthly accounting entry of (using the 1.75 per lb figure..)
Dr Food Distributions (Expense) 175,000
CR Food Donations -Noncash (income) 175,000
But this should not affect your budget since this does not affect cash.
9 votes
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11 votes · 12 comments
Family foundation 1023 EZ or not
r/nonprofit·10 days ago
Family foundation 1023 EZ or not
JV_CPA·9 days ago
Maybe you should consider the major complications and administration that a Nonproft 501(C)(3) will bring. You could donate to almost any college foundation and achieve this without any headache. You can have a scholarship named after your family and even (possibly) be part of the selection process. And, FYI, it looks like you are about to form a Private foundation. I guess that is the intention. PF are bit more complicated and may limit you deduction. Donating to the schools directly will not. There is much to consider besides the 1023. Too much to list here. The main advice is, if you have the resources, you should look for a quality CPA firm to help you set this up.
( I understand , there is a going to be a cost to that... )
The best way IMO is to look at your State CPA Society and look at Firms that are in their NonProfit or Exempt organization committee.
1 vote
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2 votes · 4 comments
Best online accounting tools for Non-Profit
r/nonprofit·11 days ago
Best online accounting tools for Non-Profit
JV_CPA·11 days ago
I usually also say QB Online - since more bookkeepers use it and you should plan to be using a bookkeeper in the future etc.
I guess importing is ok, but more developed orgs will be processing info real time (enter checks and deposits when they happen) not after the fact (monthly quarterly) etc. And I see clients' books all messed up from importing. It does not take long to enter 50 transactions a month, especially with qbooks recalling the last account used etc. This is also a low-key internal control, someone really looking at each transaction etc. Remember as a NP you need to put in all the names of customers / donors for reporting purposes (see form 9 90 sch A or sch B) + ack letters etc. Importing does not do this well or at all.. Importing is way overrated IMO, if your books are done right, it could actually waste time ( I guess I should say this last point is a HOT TAKE lol )
And 100% what BigRedCal says about the chart of accounts. Limit top level accounts to what you see on form 990 – page 10 (long form). If you want sub account sunder those fine. But you don’t need much more than that.. And I try to keep it the C of A in Form 990 order as well. So it’s easy to understand the Form 990 (where the #’s come from etc)
1 vote
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2 votes · 3 comments
Providing a Sub-grant to another Non-profit
r/nonprofit·16 days ago
Providing a Sub-grant to another Non-profit
JV_CPA·12 days ago
If its a grant, you should just know. Like any other grant. People are not randomly sending out $$. So someone will correspond in some capacity. Myabe say what the grant is for if it is program specific. And if it is an earmark , you will definitely know. Someone will say , hey here is that $$ you need to send to XYZ org. But if it's an earmark like that, you can just say no thanks, they can send it to them directly.
You see,the Parent org looks like they want to give (grant) the funds to New NP, but does not want the oversite (or any resposibility) they are trying to pass the responsible over to your org. But it doesnt work like that , I grant to your org , you have decretionary power over the funds. etc..
1 vote
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4 votes · 15 comments
Where do you draw the line between non-profit and for-profit?
r/nonprofit·13 days ago
Where do you draw the line between non-profit and for-profit?
JV_CPA·12 days ago
This situation is always an issue - you can't use nonprofit resources to benefit the FP etc etc. One really good answer is that you help in forming the NP with a completely independent board. or you can be one board member on 5 or 6 and any conflicted issues will be decided by the independent members (according to your Conflict of interest policy). If you plan on melding your business (like with ads) with this NP it may bnot be a great idea. Remember, you don't own the nonprofit. (like when you say My NPO etc). You may be a board memeber, but would usually have to exclude yourself from conflicted issues. Since your paperwork is done already, maybe you have an indepedent board already.....
3 votes
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1 vote · 4 comments
Question on refund with regards to non profit contribution
r/nonprofit·15 days ago
Question on refund with regards to non profit contribution
JV_CPA·14 days ago
Give the refund. Especially if it's not a material amount and there are no issues. The purpose clause does not prohibit this. It could have been sent by mistake or not intended to be a donation. It could be a conditional contribution which had to be returned. + Do you really want teh person going online and making a complaint to your State Charity regulator ?
2 votes
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1 vote · 1 comment
Providing a Sub-grant to another Non-profit
r/nonprofit·16 days ago
Providing a Sub-grant to another Non-profit
JV_CPA·15 days ago
[Program A has $150,000 in the accounts…. needs to be given to them ]
Parent organization (their board) governs the organization. Program A people are just part of an organization run by parent organization. They have no bank account , no entity and no separate existence. Parent organization must make decisions as to what to do with their funds, if they want to continue Program A in some capacity, or use the funds to support its mission otherwise etc. (even I these funds were donor restricted)
[would serve as a sub-grantor …. we would turn around and write a check to the new NP]
Sub grantor (prob mean fiscal sponsors)
(1) what you describe is an Earmark. If the parent is saying you must past the 150k along to New NP than that is a conduit. That is treated as a disbursement directly from Parent to New etc.. That is prob the best situation for you. You are just like a processor in a sense.. but that is not what is happening…. it's prob theis >>>>
(2) You are basically getting a grant from Parent. Your org will have discretionary authority over the funds. Your organization will report Income (grant from parent organization). Your board can do what they want with the funds. Your organization may decide to make a grant to new organization. If so, you will report a grant (expense) to that org. You need to follow all policies and procedures, , oversight, reporting for grant makers. Best way to look at it, is these two event are not connected (the receipt of funds and the grant made) in practice. Pretend your organization will be making a 150K grant to a new organization and you have oversite responsibility etc..
If I was on your board, I would probably not want to be involved with this…
4 votes
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4 votes · 15 comments
Question about non-profit pledges
r/nonprofit·15 days ago
Question about non-profit pledges
JV_CPA·15 days ago
/\ This /\ The United Way is the largest is the largest Federated fundraising organization. You may have also heard of Combined Federal Campaign (for all Federal employees).. This is not a random NP org, or a NP org that is a member of (can receive funds from) the united way.... You work for the United Way. I would do a minimal amount. And you should be able to designate your contribution to go to a charity or area of your choosing..
4 votes
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6 votes · 24 comments
Is Hiring an ED a direct or indirect cost in terms of grant funding?
r/nonprofit·16 days ago
Is Hiring an ED a direct or indirect cost in terms of grant funding?
JV_CPA·16 days ago
You should think in terms of functional allocations, program expenses, admin expenses and fundraising expense. Look at full 990 form.... Quick answer is , in. a small organization, the ED is almost always involved in programs.. an ED salary could easily be 60 % prog. 35%. Adm 5% fr.... (Like if only one person working for example) So 60% of the Ed would be in program. The other 40% would be in admin +FR (or overhead).
1 vote
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1 vote · 4 comments
I took meeting minutes for the first time and was told they read like a transcript. Board didn’t like that their comments were recorded.
r/nonprofit·17 days ago
I took meeting minutes for the first time and was told they read like a transcript. Board didn’t like that their comments were recorded.
JV_CPA·16 days ago
Minutes should have a certain format and include certain things. And meetings should follow a certain order (i.e. Robert's rules). Minutes should be not too short (bullet points) and not too long (not a transcript) to be most useful. You can look up sample minutes to get some ideas. Also , are you a Public entity? 501(c)(3) organizations maybe public charities or private foundations. Other 501(c) are not really called public (they are tax exempt but not a public charity etc) . But a 501(c)(3) public charity does not have to publicly disclose their minutes unless they is some law in place or something else saying this. They only types orgs I see consistently doing this are local governments and governmental agencies. (and that is prob required by their law).
Thay being said Minutes are the most important documentation for an organization. The only evidence an organization has that supports its decisions and operations is the recording of Contemporaneous minutes. Think board member disputes that an Executive Directors salary was excessive (not approved.) A citizen complains to the AG about any issue etc.
1 vote
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129 votes · 58 comments
Viability check
r/nonprofit·17 days ago
Viability check
JV_CPA·17 days ago
Yes , but you need enough independent board members to be able to make decisions where there is a conflict of interest , like your salary etc.. it's common for a paid executive director to also be a voting board member in a small organization..
2 votes
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1 vote · 5 comments
Viability check
r/nonprofit·17 days ago
Viability check
JV_CPA·17 days ago
It is possible. You need an independent board to govern the organization, approve your salary and basically be you boss. You can service 2-3 families but your services generally have to cover (be open to) a charitible class , open to the public. I assume these families are unrelated. It would be better if the organization aimed to service a large amount of people. Maybe you are the first employee etc. They key to remember is once it's a NP, it's a public entity and you no longer own anything and you could even get fired by the board. The board members will have responsility for the organization (duty of care etc.) GL
2 votes
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1 vote · 5 comments
Requirement to register with state Attorney General's office as a charity in every state where you solicit donations?
r/nonprofit·18 days ago
Requirement to register with state Attorney General's office as a charity in every state where you solicit donations?
JV_CPA·17 days ago
Undertstood.. Very difficult for charities to operate rn.. Unfortunately state charity registrations are going to be more and more of a prob going forward. Good luck with things ...
1 vote
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1 vote · 11 comments
Requirement to register with state Attorney General's office as a charity in every state where you solicit donations?
r/nonprofit·18 days ago
Requirement to register with state Attorney General's office as a charity in every state where you solicit donations?
JV_CPA·17 days ago
yeah, this is going to be crazy, so when using those Fundraising platforms based in CA, even foreign state orgs have to register in CA ( this will affect you if you use Facebook, Network for Good, PayPal Giving Fund etc.) CA is forcing the Platforms to make sure your are registered in CA to use them etc.
2 votes
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1 vote · 11 comments
Requirement to register with state Attorney General's office as a charity in every state where you solicit donations?
r/nonprofit·18 days ago
Requirement to register with state Attorney General's office as a charity in every state where you solicit donations?
JV_CPA·17 days ago
But be careful, all those registeration companies want to register everywhere. That is their business. Best to figure out where you should /want to, register before even contacting that kind of compnay (there are many of them). I also recommend doing these yourself (orginally and annually). I know it sounds crazy but they will just ask you questions and fill out a form or put it in a website. And they will make mistakes. he accountant doing your 990 is prob better off doing the annual forms if you can't do them..
1 vote
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1 vote · 11 comments
Requirement to register with state Attorney General's office as a charity in every state where you solicit donations?
r/nonprofit·18 days ago
Requirement to register with state Attorney General's office as a charity in every state where you solicit donations?
JV_CPA·18 days ago
Be very polite.. the funder is prob correct, technically.....
State Charity registration (for Solicitation) has always been unclear and with the advent of Websites , apps , mobile etc etc , it became foggier. Firstly, there are some states with absolutely no Chairty Registration requirement ( maybe 10.. ) so those are clear.. The other states has some kind of statute regulating registration , but many have unclear language as to what is "online" Solicitation. If you go by the letter of the law, many states will require registration for just having a website. Some states have minimum thresholds. You would have to go to the state, look to see their requirements and look to how they define solicitation. (and many don’t have it defined🙃) Will you register everywhere? ofc not. There are def things that you would want to 100% register for. Home state, physically present, when throwing a fundraiser event (especially in CA) , direct mail campaigns etc. But, writing a letter to a foundation is soliciting. Speaking to a potential funder is soliciting.
Back in 2001 – there was an effort by the NASCO (National Association of State Charity Officials) to try to codify state regulations. They came up with internet solicitation Guidelines called the “THE CHARLESTON PRINCIPLES”. But except where a state law refences these Principals, they are only guidelines, not law. (I forget which - but I remember a few states do reference them). But many people out there will quote them as law and such.
https://www.nasconet.org/wp-content/uploads/2018/04/Charleston-Principles.pdf
What happens if you do not register in a state? This happens all the time, mainly in the formation state. Where a charity just doesn’t know they had to register and operates for years (they have their IRS 501 C(3) etc.,) – The state would basically say you need to register after the fact and file prior years returns and pay the state fees. This is normally the situation. It is similar when another state is involved. I have seen a lot of CA issuing letters to organizations that need to register, and they registered after the fact. So, there is no clear answer.
btw, registering in an additional state is not really a big deal administratively. Yeah, its crazy to deal with 20 states registration renewals each year. But they are using just a few questions and attached your Form 990. Some state have Audit (or review) requirements, but if you already have a CPA Financial Statement Review for your home state (like most do in NYS), its already done etc..
But my professional advice is to register everywhere you should, and operate 100% in compliance with all laws and regulations 😉 Also… the funder is always right ! lol
2 votes
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1 vote · 11 comments
For profit to non-profit conversion
r/nonprofit·19 days ago
For profit to non-profit conversion
JV_CPA·18 days ago
Just a note, Nonprofit , 501(c)(3) orgs are public entities, to serve the public by advancing their exempt purpose etc etc.. For profits, don't trechnically "convert" to Nonprofits. It is more that a new nonprofit or existing nonprofit , continues part of the For profit services because it fits with their mission. If the non profit is buying someing "real" like a building it make more sense. But if the nonprofit is not indepdendent (different board member from the owners of the for profit ) and the nonprofit pays the owners of the FP (no matter where teh funds come from), you run into Intermediate sanctions - Excess benefit transactions (i.e. massive penalties) - https://www.irs.gov/charities-non-profits/charitable-organizations/intermediate-sanctions-excess-benefit-transactions There could also be issues with your state charity regulator (AG etc). The main concern will be that , in substance, the FP is using a NP/501(c) vehicle to personally benefit. If this is viable, an existing , completely unrelated NP organization , that operates in this service area, would pay for whatever the FP is selling (clients I guess).
2 votes
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2 votes · 12 comments
Which state should I incorporate my nonprofit in?
r/nonprofit·20 days ago
Which state should I incorporate my nonprofit in?
JV_CPA·19 days ago
I advise against student organizations seeking formal organization of a nonprofit. Avoid if possible. As you see, forming is complicated , as is operating it forever (by future students i guess). See if there are any other existing nonprofits that can act as a fiscal sponsor (look this up), that may be a better option. Or , if possible , run the program under/through the school.
Anyway (1) you have to incorporate (2) you have to register for charity solicitation. Your program is in CA, you will have to do a full registration / setup in CA, regardless of where you incorporate. Unless you are operating and soliciting in a state that have no Charity Registration laws (which CA is not one) then you usually should just incorporate and form and register in the state you are operating in.
Worrying about the incorporation fees is a huge sign that you should not be doing this. There are much much greater costs and complications on the horizon.......
2 votes
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1 vote · 2 comments
Officer roles and the board questions.
r/nonprofit·20 days ago
Officer roles and the board questions.
JV_CPA·20 days ago
That is a matter of state law so you need to check Ohio NP laws: https://codes.ohio.gov/ohio-revised-code/chapter-1702
Even if not mentioned, that is just not a good idea. You do need 3 board members, and preferable they will all be independent and you can then have a pres, treas and secr, at least on paper. in very small organization's director roles are not very delineated anyway.. (and you should prob have more than 3 directors aka Board Members, and at least 3 independent) . Look at form 990 Section VI. you will see they ask a lot of questions and there are answers that look better than others.. (but not IRS requirements etc...)
7 votes
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2 votes · 14 comments
Volunteer Hour Tracking
r/nonprofit·20 days ago
Volunteer Hour Tracking
JV_CPA·20 days ago
Page 1 of Form also 990 asks "Total number of volunteers" - From a Financial perspective, this fills the gap when an organization is not reporting ( much) Salary (W2) or compensation (1099) anywhere. Like, how does this org fullfill its mission without people working there etc. A reminder , that Volunteers time is not reported on the form 990 or the financial statements (as income/expense). But inkind professional services (lawyers, CPAs, doctors) are reported as inkind services for GAAP financials (but not on form 990). You can look up what qualifies for this and how to value it. I do count BOD and founders, and anyone else that is not compensated, as a volunteer (Form 990 - page 1).
2 votes
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4 votes · 6 comments
Can a non-profit own a food Co-op?
r/nonprofit·22 days ago
Can a non-profit own a food Co-op?
JV_CPA·21 days ago
Sounds like a for profit business not doing well and then trying to personally benefit from NP status in a number of ways. There are too many reasons this is a bad idea to list.
1 vote
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9 votes · 20 comments
Small nonprofit youth sports org issues
r/nonprofit·22 days ago
Small nonprofit youth sports org issues
JV_CPA·22 days ago
yeah - agree with all that said to 🏃🏃🏃Run - Just quit the board - your daughter will be done with this soon.
Are we legally allowed to continue fundraising? >>> Maybe - states regular Solicitation. So you need to check there. But - right - donations won't be tax deductible
-$500 to our org’s founding member (founded over 20 years ago) who is dealing with cancer. Is this even allowed? Not really - Actually charities can't make "donations" - they can make grants , that fullfill their exempt purpose. So grants could be like a donations. but your exempt purpose does have anything to do with Cancer. (insiders could get grants under certain situations, but it is irrelevant here)
-At every board meeting I have been to, not once has it been disclosed how much money we actually have in our bank account. We also never receive meeting minutes.>>>>Financial information - not just the $ in the bank account should be avaiable to the board. Minutes should be available and you will always approved teh prior meeting minutes etc.. but this is mess.
So many situations like this out there.. Literally nothing you can do anbout this, unless you want to dedicate your entire life to it 🏃🏃🏃🏃🏃🏃🏃
3 votes
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7 votes · 15 comments
Non Profit Filing Courses
r/nonprofit·24 days ago
Non Profit Filing Courses
JV_CPA·23 days ago
Not really on Linkedin.. but this is a good site https://www.nonprofitaccountingbasics.org/ by the GWSCPAs i wrote something on there I think.
1 vote
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1 vote · 7 comments
Non Profit Filing Courses
r/nonprofit·24 days ago
Non Profit Filing Courses
JV_CPA·24 days ago
I doubt there are any. Best scenario is working for a number of years for / with someone experienced in NPs and Form 990 (that knows what they are doing 😏) but.. the key to really doing it right is understanding Nonprofit accounting as well. I guess you may be doing write ups, or year end closing with the tax prep. NPs are really specialized in accounting and Tax prep, not many do it well, especially smaller firms serving small NPs.. but the Form 990 instructions are excellent. You can find an explanation or info on almost anything in there . Good Luck 🙌
4 votes
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1 vote · 7 comments
Rental Declared Value
r/nonprofit·26 days ago
Rental Declared Value
JV_CPA·24 days ago
I started a rental business <> Should be organized a nonprofit with a group of people (Board)
Celebrities donated clothing = They get a a donation of FMV of item on date of contribution, it is up to them to asssess the value , the Nonprofit is not involved in that. (they can get an appraisal if they want). Deduction should be limited to their basis in the contributed property (usually cost)
All the info you need on this is here: https://www.irs.gov/pub/irs-pdf/p526.pdf
All the funds generated (contributions or otherwise) have to be used to full your charitible mission / exempt purpose
1 vote
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1 vote · 3 comments
Liability insurance for 401C?
r/nonprofit·1 mo. ago
Liability insurance for 401C?
JV_CPA·1 mo. ago
I think you mean 501(c)(3) - I see a lot of NPs 501(c)(3) use https://www.phly.com/
2 votes
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1 vote · 3 comments
ED Transition during Job Offer
r/nonprofit·1 mo. ago
ED Transition during Job Offer
JV_CPA·1 mo. ago
Also check the financials of both organizations, which you should be able to find publicly. TO make sure things (i.e. $$) are sustainable at both orgs..
⬆️Cash ⬆️ Investements⬆️ Unrestricted Net assets ⬆️reserves etc 😀 ⬇ Debt , loans etc 😒
Also read the financials statement notes for anything weird. Major lawsuits etc.
1 vote
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7 votes · 10 comments
EIN not popping up
r/nonprofit·1 mo. ago
EIN not popping up
JV_CPA·1 mo. ago
I would assume your were a nonprofit. Call the IRS - I would call the exempt org # 877-829-5500. Tell them to look up your Org by EIN. See what the status is. If your were a NP, you are prob revoked (for not filing annual forms). You prob need to start a new Nonproft organization, but that is too much of a hassle, even for a simple group. You will not be able to open a bank account otherwise... If you need to have a bank account and make transactions. checks etc, i would go the the university (who ever is in charge of clubs) and ask if you can have an account with the school. (or maybe it's teh bursar office). Then you can depsoit money with the school and prob have to fill out payment vouchers to get checks from the college.. In my experience, that is how must student clubs/groups work. But some larger ones (like fraternities) do have their own independent organizations and have a bank account ( and all the other headaches etc)..
1 vote
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4 votes · 6 comments
Idea Feasibility
r/nonprofit·1 mo. ago
Idea Feasibility
JV_CPA·1 mo. ago
I see people saying "starting a nonprofit" in the same way as they would say "start a business". For sure, some things could be a nonprofit structure or a for profit struction (schools, service provider, like therapy etc) but.... you don't start a nonprofit, you organize one, by bringing a board of directors together to govern it. That BOD = your future bosses, that can basically fire you from what you started. Also you cannot "pay yourself", the independent board members (not related to you and not yourself) will decide and approve your pay. (see conflict of interest policies - see Form 990 part VI - section B). Plenty of founders have actually left or got fired from an organization that they basically started (many times unjustly) To get the ball rolling, find a Board of Directors (even informally at first) that share your vision and that you jive with. The should mostly be independent of you and each other (not relatives etc) This paperwork stuff, incorporation , registrations, come later IMO..
2 votes
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5 votes · 19 comments
Nonprofit based in Tennessee has to register with California for FB fundraisers?
r/nonprofit·1 mo. ago
Nonprofit based in Tennessee has to register with California for FB fundraisers?
JV_CPA·1 mo. ago
The wording is a little janky. They are trying to say you need to be fully registered (good statnding) in CA & IRS. And then not get revoked or loss status and be on a "Block" list. CA is the most agressive state in making foreign (out-of-state) orgs register in CA. This AB 488 law is the latest in that effort. The FTB part is the most agressive imo. Out of State Charities soliciting in CA had to always register with the AG and file RRF-1 annually. But some did not have to register with FTB (and file 199) because they did not do business in the state (under Economic Thresholds, not presence etc). Seems like if org want to use online fundraisers, they will have to register for both.
A lot of states "techinically" require registration for online fundrasing (unless you somehow exclude their state). But CA is regulating these platforms, since they are in CA, forcing them to basically force all orgs to reg in CA. The orgs "technically" should have been registered in CA for soliciting online (even having a website solicition) but there was not way for CA to enforce this. So they are going through the platforms.
CA can't do this to fundrasing platforms out of CA (I don't think) . And you may even see some platforms move out of CA ¯\_(ツ)_/¯
2 votes
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3 votes · 3 comments
Starter accounting software
r/nonprofit·1 mo. ago
Starter accounting software
JV_CPA·1 mo. ago
Well - what QB does well is making bookkeeping as easy as it could be. Easiest learning curve etc. Also has enough power to sustain unless you really grow. 100 Million revenue orgs would be like , qbooks is not good etc. but they are playing a different game than 99% of NPs. Also quickbooks does NOT do Fund Accounting. NPs track funds (donor restricted fund, board designated funds etc) but don't normally use what was "fund accounting". Fund accounting is not GAAP since 1993 (with SFAS 116&117). You will need GAAP accounting for Form 990 and any Audit/Reviewed financials statments that the state or funders required etc. But on that front, Qbs does not have a real mechanism for tracking the funds you need to track over multiple years (mainly donor restricted funds). But it is easy enough to extract yearly information form quickbooks and setup to track these amounts in excel.
3 votes
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3 votes · 11 comments
Starter accounting software
r/nonprofit·1 mo. ago
Starter accounting software
JV_CPA·1 mo. ago
Yep - and with Quickbooks online they don't have to neccessarily be from your area. Unless you need other things done onsite etc.
1 vote
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3 votes · 11 comments
Starter accounting software
r/nonprofit·1 mo. ago
Starter accounting software
JV_CPA·1 mo. ago
This ☝️ + QBO will suit you for a very long period of your growth (prob for ever) and with anything but Qbs you will have a harder time finding a bookkeeper (which is already hard). Techsoup + QBO 💯
3 votes
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3 votes · 11 comments
Donation from PAC?
r/nonprofit·1 mo. ago
Donation from PAC?
JV_CPA·1 mo. ago
It is basically a contribution from Company X. If you would normally accept a contribution from Company X - it should be fine. Company X has an incentive for people to donate to the PAC. Company X probably already has a charitible giving program so this perk for their PAC contributors doesn't really cost them anything because they prob already give out large sums to Charities etc. For your records, and Form 990 Schedule B, it's a contribution from Company X. But you could send a thank you (not a tax acknowledment letter) to the person (employee) that directed this contribution to you.
3 votes
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3 votes · 2 comments