Lessons Learned at AICPA Not-for-Profit Industry Conference

congressOn June 20th, Eide Bailly professionals descended on Washington, D.C. for the annual AICPA Not-for-Profit Industry Conference.

A month later, here are just a couple of the sessions that still have us thinking:

Brenda Blunt (Phoenix Office): New Consideration of Overhead

In a question-and-answer session with the charity watchdogs, entitled What the Watchdogs are Watching, Charity Navigator President & CEO, Ken Berger, commented that Charity Navigator is in the process of revisiting their charity rating system to, what they dub “CN 3.0”. The revised rating system incorporates a new dimension they call “Results Reporting” that measures organizations’ effectiveness based on their reported outcomes and whether outcomes provide social value. As part of this revision, they will not eliminate, but will reduce, the weight they have historically given to the percent of expenditures on program to total expenditures. This new approach is consistent with the letter they just issued jointly with GuideStar and the Better Business Bureau Wise Giving Alliance on The Overhead Myth. (See our blog post on this topic here.) For more detailed information on the Charity Navigator rating revisions, read this article.

Karen Jess (Dubuque Office): Consideration of What “Counts”

The session titled Bridging the “GAAP” between Development and Finance provided useful scenarios for considering comparisons between what development “counts” as contributions versus what accounting can actually recognize. These differences are important and can include a variety of items, including bequests, multi-year pledges, private stock, naming rights, life insurance, and many more. These differences often create internal confusion for staff and boards of directors. For instance, they might wonder whether they can trust internal reports or whether they can move ahead with funding program activities. Frequent internal communication about these differences is critical to maintain confidence in implementing programs and communicating with stakeholders.

Did you attend the conference too? What ideas and points-to-ponder did you take away?

Social Media Tax Implications

Social-Media-IconsSocial media is a requirement for the nonprofit sector – it allows organizations to reach a large audience with very little cost. However, most organizations are not aware of the potential tax implications. There is little guidance regarding online communications, but the IRS considers online communications to be similar to other forms of communication; thus, a website is considered a form of communication.

Facebook and Twitter have become the norm when it comes to communicating. Both forms allow for links to other websites that may or may not be related to the organization’s tax-exempt purpose. Organizations should be aware and continually monitoring content both on their own website as well as websites to which that they provide links. Organizations must consider whether the link is advertising – does it endorse products or provide qualitative information? Or is it only an acknowledgment? This area continues to change and requires organizations to be aware of potential risks.


OMB Releases 2013 Compliance Supplement

omb_0The Office of Management (OMB) released the final the 2013 OMB Circular A-133 Compliance Supplement on July 2, which can be accessed at http://www.whitehouse.gov/omb/circulars/a133_compliance_supplement_2013.

The revised Supplement is effective for audits of fiscal years beginning after June 30, 2012. Appendix V lists the changes to the Supplement.

Health Care Reform Employer Mandate Extended

congressThe Department of Treasury announced late on July 2 that enforcement of the Affordable Care Act employer mandate, which requires employers with more than 50 full-time employees to provide affordable health insurance coverage or pay defined penalties, will be delayed from its original deadline of January 1, 2014, until January 1, 2015. Visit http://www.eidebailly.com for additional information.