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Blogging Beyond the Numbers

Allocating Expenses
Posted by: Danielle Moyer 4 weeks ago
Nonprofit organizations are required to present expenses by their functional classification, such as major classes of program services and supporting activities, but some organizations wait to allocate their expenses functionally until they are required to for financial statement purposes. Below, you will find some of the reasons that it is important to allocate expenses throughout the year, as wel...
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Posted by: Kyle Ager 1 month ago
Nonprofits CAN legally engage in lobbying activity to influence legislation. However, the extent to which nonprofits can lobby without endangering their exempt status has caused many to shy away from lobbying activity altogether. The Internal Revenue Code states that no substantial part of the activities of a nonprofit can be to influence legislation. Therefore, a nonprofit can engage in a non-substantia...
Posted by: Yingying Yuan 4 months ago
As the plan sponsor of your company retirement plan, you have a fiduciary obligation to manage the plan assets and oversee operation. The fiduciary guidelines of the Employee Retirement Income Security Act of 1974 (ERISA) require the named fiduciaries of the Plan to carry out due diligence in administering Plan operations. Fiduciaries have responsibilities and are subject to standards of conduct because th...
Key Financial Performance Indicators
Posted by: Steve Kleiss 5 months ago
"So how are we doing?" A common question from management and governance of nonprofit organizations. Here are a few financial indicators for a clearer understanding of the financial health and performance of your organization.  Operating Reserve How much do we have for the lean times? Ample reserves are often discussed and often harder to make a reality, but it helps to start with a defin...
Income Tax
Posted by: Brian Dahlk 7 months ago
Nonprofit organizations generally conduct nonprofit activities.  That’s pretty obvious and self-explanatory.  However, nonprofits occasionally do enter into the for-profit domain, and these endeavors often generate Unrelated Business Income Taxes (UBIT).  Such activities by a nonprofit are permitted and acceptable, as long as its for-profit ventures 1) are not so excessive that they supersede the organ...
Books
Posted by: Jolene Giese 11 months ago
Year end has come and gone.  Your auditor is contacting you about the upcoming audit.  Are you ready and anticipating the audit or do you dread it?  You probably feel like you are back in school and prepping for an exam.  Read on to make sure you make the grade. Coursework The day to day transactions, internal control documentation, and filing of supporting documents are the material you will be teste...
Exchange Transaction vs Contribution
Posted by: Danielle Moyer 11 months ago
Although grants are one of the most common revenue sources for non-profit organizations, the term "grant" has no accounting definition and is used interchangeably with both of the accounting terms "exchange transaction" and "contribution". It is important for organizations to determine whether their grant is an exchange transaction or a contribution, as the classification will determine the accou...
Promise to Give
Posted by: Kyle Ager 12 months ago
Many non-profit organizations struggle determining whether the communication they received from a donor represents a conditional promise to give, an unconditional promise to give, or an intention to give. This article will help to shed some light on a complicated subject. Promises to give, which are commonly referred to as pledges, represent an agreement for a donor to contribute cash or other assets to an...
Posted by: Jillian Runde 1 year ago
The holiday season is known as the time for giving, and who better to give to than your favorite non-profit organization. These year-end contributions may not come in the form of cash as expected, but rather as a promise from a contributor to give in the future. As a non-profit, how does your organization account for these promised contributions? The timing of revenue recognition is tied to the date of...
Posted by: Derek Hilst 1 year ago
The Financial Accounting Standards Board (FASB) has issued "Not-for-Profit Entities (Topic 958) and Health Care Entities (Topic 954)." This is the biggest change to Not-for-Profit (NFP) reporting since 1993. The changes will provide the users of the financial statements with better information about the financial health of an NFP. This standard will affect net asset classifications, liquidity, and financial...