More Questions and Answers

Posted on January 19, 2009 | 2 comments

Questions?When I present trainings and workshops I always get at least one question I can’t answer on the spot and need to look up.  Here are the Questions and Answers from the week of January 12th, 2009:

  1. If our organization awards scholarships do we list that on the form 990?

    Yes you probably do.  For information about what kinds of grants and other assistance is listed in the updated Form 990 and Schedule I please click here.

  2. How long do we keep records for donations to our nonprofit?

    At least seven years after the donation.  Many organizations keep them permanently but that is up to the organization.

  3. When we pay someone a stipend do we have to give them a 1099 at the end of the year?

    Yes you do as it is considered “non-employee compensation.”  Please check out the IRS’s 1099-Misc information here.

  4. Where can I find more sample policies and procedures?  Specifically ones that the IRS is asking for?

    updated Form 990 The Yolo Community Foundation has put theirs online to promote good governance, please check them out here.
    Also the National Council of Nonprofits has some good samples as well.

  5. Do raffle and auction winners get a donation thank you?

    Yes, if they end up paying more than market value for the item they recieved.  Check out this nice piece from the IRS that is all about contributions and specifically take a look at the examples that start on page three.

Did I miss any?  Ask them in the comments below or email me.

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Posted in Governance, IRS, Nonprofit Accounting, Policies and Procedures, Q&A, Tax Forms

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Workshop Resources

Posted on January 12, 2009 | 3 comments

Box 'o resourcesThanks to all of you who attended the workshops.  As promised I have put together all of the resources that were mentioned in the trainings in one area.  These are listed elsewhere on the site but I thought it would be nice to organize them into one place.  Scroll down the page for the list of all the resources and please post a comment or email me if you have any questions.

  • The Unified Chart of Accounts (UCOA) and Key Word Index – The UCOA (pronounced yoo-KOH-uh) is an activity-based accounting system that incorporates the reporting requirements of many institutional funders and can be tailored to each nonprofit’s changing needs and existing system. The UCOA is designed to allow nonprofits to add as many reporting requirements as necessary while still allowing you to use just one system for accounting and reporting. Click here for more information.
  • The payment requisition form mentioned in the workshop.
  • Time-sheet and cost allocation samples – click here if you would like to download the excel worksheets to play with.
  • Joint Costs – When you send out something that is both educational AND a solicitation for funds you run the risk of having the total cost of the activity listed as fundraising and not program unless you meet certain criteria. This article will help guide you through the process.
  • The 2004 Nonprofit Integrity Act, SB 1264 – For all the details please see the overview of 2004’s Nonprofit Integrity Act (pdf), and go here and here.
  • Pub. 1771, Charitable Contributions Guidelines for Donors (PDF)
  • An article on Cost Allocation I mentioned.
  • IRS & 990 – All of the IRS and updated Form 990 resources are here, take your pick!
  • Information on putting together an operations manual or financial policies can be found here.
  • Budgeting and other Financial Management resources are on this page.
  • How to create a financial policy manual and financial management plan.
  • Other resources including the donation and auction item journal entry guidance and fraud prevention articles can be found in the General Resource page

For those who missed the presentation handout or want another copy I have the most recent events on Not-for-Profit Accounting Groups page.  Please click to get them and feel free to join the group and start some discussions.  If you don’t see them there contact me and I will make sure to upload them.

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Conditional Contributions

Posted on January 6, 2009 | 1 comment

hurdlerA condition is effectively a barrier that must be overcome before a promised gift becomes a contribution. A part of the definition of a contribution is that it is an unconditional promise to transfer assets to a nonprofit.

I received a question about conditional contributions that went along the lines of “is a contribution conditional if the promised contribution is not paid until the end of the year and the work is completed?” What you could have here is an exchange transaction, and not technically a contribution.

But assuming it is a contribution you can recognize the revenue in two ways depending on the donor/grantor’s instructions. The first would be piecemeal. As you do a portion of the work a portion of the condition of the contribution is met and therefore you can count it as revenue and a receivable. So as you do the work, you recognize a bit of the grant at a time. The second would be to recognize it all at once after the work is done. Once the work is done (the condition is met) then you have a contribution and book the receivable (assuming you do not have the funds yet).

When you get the actual cash does not factor into the discussion in any case, just when you get conformation from the donor that at some point you will be getting the cash.

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Posted in Nonprofit Accounting

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