A Plan to Keep Public Charity Status

By CarolCarrie / October 8, 2018 /
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Congratulations if your organization has achieved 501(c)(3) public charity status! Now what is your plan to keep it? Public Charity or Private Foundation? Organization founders are usually focused on obtaining 501(c)(3) status. Most likely they want to be a special type of 501(c)(3) – a public charity. The alternative is to be classified as a…

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Handling Deposits Net of Fees  

By CarolCarrie / October 1, 2018 /
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Recently we received a question about how to handle deposits that come into the bank account net of fees. Since we are in the midst of covering income accounts on our Chart of Accounts Grand Tour, now seems like a great time to cover this topic. Here is an example:  A donation of $100 is…

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Nonprofit Income Accounts Part 3: In-Kind Donations

By CarolCarrie / September 24, 2018 /
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In the last few posts we have been talking about contribution income and the kinds of income accounts you need. Our Chart of Accounts Grand Tour travels through in-kind donation income accounts today. In-kind donations are one of the more confusing and difficult areas for nonprofits. And that’s unfortunate because in-kind donations are so common.…

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Contributions Under the New Tax Law

By CarolCarrie / September 17, 2018 /
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How will the new tax law affect charitable giving? Are there any tax breaks left for donors? Our friends and income tax experts, Lou Lauteria and Greg King at Lauteria & King, PLC, sent out a client alert to explain. We reprint their explanation below, which includes a great idea for your donors, then add…

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Nonprofit Income Accounts Part 2: Contributions

By CarolCarrie / September 10, 2018 /
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In our last post we took a brief look at the nature of contributions, and all the many names that contributions go by. We distinguished contributions from exchange income. Today we look at accounts for contributions of cash. In-kind contributions, such as gifts of securities or other in-kind goods, services or rents, are for another…

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Names for Contributions

By CarolCarrie / August 27, 2018 /
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A gift by any other name would smell as sweet… Last week our Chart of Accounts Grand Tour began to explore income accounts. We covered federated campaigns and membership contributions. Before we continue with income accounts for general contributions, let’s talk terminology. Defining a Contribution Contribution income goes by many names: Donation Contribution Membership Gift…

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Nonprofit Income Accounts – Part I

By CarolCarrie / August 20, 2018 /
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Our Nonprofit Chart of Accounts Grand Tour continues – with income accounts! As an introduction to nonprofit income, over the last few posts we explored where nonprofits get their income as reported on IRS Form 990. We also explored the concept of income diversification. Unlike balance sheet accounts, income accounts can vary widely. Reasons for…

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Alternatives to Diversification

By CarolCarrie / August 13, 2018 /
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Before your organization seeks to diversify income, consider three ways you may be able to move toward financial sustainability. This post continues a series on income diversification before we continue our Nonprofit Chart of Accounts Grand Tour on income accounts. 1. Reduce expenses Before you consider new sources of income, make sure you are not spending…

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Nonprofit Income Diversification: A Cautionary Tale

By CarolCarrie / August 6, 2018 /
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In 2014 one of our clients derived about 25% of income from one Federal pass-through grant. This grant substantially plugged the shortfall between the program service fees they charged to clients and their costs to provide the program. That year the notes to their audited financial statements cautioned (details changed): “The Organization received substantial support…

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Nonprofit Revenue Diversification

By CarolCarrie / July 30, 2018 /
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We’ve all heard the adage, “Don’t put all your eggs in one basket.” How does this advice hold up for nonprofit income? Before we continue our Nonprofit Chart of Accounts Grand Tour into income accounts (here’s the guide to the Tour of balance sheet accounts), first let’s consider the concept of income diversification. Income accounts…

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