Has your nonprofit had an outside audit recently? If so, did your organization act on the findings? The cost of not responding to audit results can be steep. Read on to learn why constructive follow-up is in your organization’s best interest. Reviewing the draft report Once outside auditors complete their work, they typically present a…
The IRS has released new guidance on excess benefit transactions (EBTs). So-called disqualified persons and organization managers who engage in such transactions with nonprofits face stiff excise taxes — also known as intermediate sanctions — under Section 4958 of the Internal Revenue Code. But not every transaction between disqualified persons and nonprofits is prohibited. Here’s…
Tax-exempt status isn’t necessarily forever. It may not happen frequently, but the IRS does revoke the status when nonprofits engage in substantial disqualifying or nonexempt activities. In fact, the agency recently updated the audit guidance for its examiners regarding such tax-exempt status violations. If your organization is venturing into business activities these days, know what…
Make balance sheets and income statements understandable A nonprofit organization’s board of directors might include accountants, bankers or investment managers. It also might include business or community leaders with expertise in your nonprofit’s niche or in fundraising, marketing and publicity. How can you best share your organization’s financial results with the board members who aren’t…
A bipartisan group of U.S. senators has introduced legislation to expand and extend the non-itemized deduction for charitable giving. Dubbed the Charitable Act, the bill would increase the previous $300 deduction permitted in 2020 and 2021 (or $600 for married couples filing jointly in 2021). The bill would allow taxpayers who don’t itemize their deductions…
In the shadow of a tight labor market and the so-called Great Resignation, nonprofit organizations reported overall average salary increases of almost 6% for all staff in 2022, with projections for increases of more than 5% for 2023. That’s just one of the tidbits in The NonProfit Times’ nearly 600-page “2023 Nonprofit Organizations Salary and…
Deciding whether to merge with another nonprofit isn’t a straightforward decision. Although some nonprofits struggled through the COVID-19 years, others prospered. Now, with high inflation rates and a possible recession, many nonprofits are again left with questions about their futures. A merger can help organizations share expenses and weather economic storms. But there are also…
Many employers, including nonprofits, are turning to independent contractors and freelancers as a way to deal with the continuing tight labor market. If your organization is among them, you need to take steps to ensure you collect the necessary paperwork — including IRS Form W-9, “Request for Taxpayer Identification Number and Certification.” In a nutshell…
The IRS can initiate an audit of your nonprofit organization for any number of reasons. But perhaps the most common is a red flag sent up by your annual filing of Form 990, “Return of Organization Exempt From Income Tax.” Read on to learn the potential trouble areas and how you can reduce your audit…
It’s easy for disaster planning to fall by the wayside when your nonprofit is focused on pursuing its mission. But taking the time to prepare now can help you avert mission-threatening consequences later. From hurricanes, wildfires, active shooters and cyberattacks — to events as seemingly minor as a burst pipe — your operations are vulnerable….
