Recently we noticed an enviable problem with several of our clients. What to do with all that cash piling up? Here are stories of three nonprofits with too much cash and how they handled it. At the end of the post we provide more information about reserves and quasi endowment. Organization #1 The first organization…
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Organizations use various types software to help manage customers and the revenue process. But that software is often disconnected from the accounting system. Customer and revenue software programs fall into three major categories: Industry-specific customer relationship management (CRM) software. Examples include: ProCare – for child care centers VETbuddy – for veterinarian clinics TherapyNotes – for…
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Does your organization have more than one major program service? You get a chance to show off the accomplishments of your organization’s top programs in Form 990. Part III of Form 990 contains three generous spaces to write a description of accomplishments for your organization’s top three programs. If you really have a lot going…
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Last week we looked at Bridges for Heroes, an organization that provides assistance to veterans for health insurance and costs of health care not covered by insurance. We determined this type of help qualifies as charitable assistance because: Veterans constitute a “charitable class.” Recipients must show need by meeting eligibility requirements But is the charitable…
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Jean Ryan started a nonprofit organization called Bridges for Heroes to help veterans and their families with the cost of health insurance, co-pays and deductibles. Does Bridges for Heroes qualify as a 501(c)(3) organization? Is this type of help considered charitable assistance? A Little Background The IRS states, “To be tax-exempt under section 501(c)(3) of the…
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“Hey, I have a great fundraising idea. Let’s sell {insert merchandise} to raise money!” Sometimes this can truly be a great idea. And it may be worth pursuing. Just proceed with full knowledge of what you are getting into. Selling merchandise involves a different type of accounting. In fact, it involves a lot of different activities.…
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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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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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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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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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