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A Nonprofit Parking Tax???

By CarolCarrie / March 4, 2019 /
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Yes, starting Jan. 1, 2018, Congress is implementing a nonprofit parking tax. Hidden in the 2017 Tax Cuts and Jobs Act is a provision taxing employer-provided parking for nonprofit organizations. Nonprofits have long been subject to tax on unrelated business income (UBI), which is reported on Form 990-T. This new tax, however, is a tax…

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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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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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Main Sources of Nonprofit Income

By CarolCarrie / July 16, 2018 /
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In last week’s post, we saw that major sources of nonprofit income for public charities include (from largest to smallest): Fees from private sources (also called program service fees) Government grants and contracts Private contributions Investment income Other sources The above “big picture” is from Forms 990 and 990-EZ filed with the IRS. These income…

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Nonprofit Income Streams: An Introduction

By CarolCarrie / July 9, 2018 /
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Over $1.85 trillion dollars of income was reported by public charities filing Form 990 or 990-EZ, based on 2016 IRS data compiled by The Urban Institute, National Center for Charitable Statistics.  Where does all that money come from? Specifically we are focusing on income of 501(c)(3) public charities. For comparison’s sake, here are common types…

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