Shared from IRS.gov In most cases, distributions from a traditional Individual Retirement Account (IRA) are taxable in the year the account owner receives them but there are some exceptions. A qualified charitable distribution (QCD) is one of the few exceptions. A QCD is a nontaxable distribution made directly by the trustee of an IRA to organizations…
Category: Featured
Fundraisers Seek Protection with “Bill of Rights”
The Association of Fundraising Professionals (AFP), which previously developed a “Donor Bill of Rights,” is now looking inward to protect their members’ own “physical, mental and emotional wellbeing” on the job. A recent AFP survey found that nearly a quarter of fundraisers have experienced sexual coercion, meaning pressure from an employer to make themselves vulnerable…
Do You Understand the Public Support Test?
Nonprofits that aren’t careful can stray over the line that distinguishes between public charities and private foundations. This can expose nonprofits to lower tax-deductible donation limits as well as potential excise taxes and penalties. Certain organizations, including universities and churches, automatically qualify as public charities, but others must pass a public support test. Role of…
Lease Accounting Rules Are (Finally) Here
Implementing the FASB’s Accounting Standards Update The updated accounting standard for leases, released back in 2016, is finally taking effect this year for all organizations, including nonprofits, that haven’t already adopted it. You might be surprised at how many “leases” you have under the Financial Accounting Standards Board’s (FASB) Accounting Standards Update (ASU) 2016-02, Leases…
Ways to Improve Your Organization’s Accounting Function
Although nonprofits may be exempt from income tax, they still have financial and accounting requirements. This includes projecting budgets and monitoring the results, preparing financial statements and collecting payroll taxes. Accounting processes can become inefficient over time if you don’t monitor them. Here are some suggestions of procedures your organization should review regularly. Invoicing and…
Virtual Events Remain Vital and Valuable
Pandemic protocols may be loosening, but that doesn’t mean nonprofits should shut the door on virtual events. A recent survey of 1,000 people who attended fundraising events between January 2020 and February 2022 suggests that the flexibility of multiple attendance options attracts supporters. Conducted by Classy, a San Diego-based fundraising platform (that was recently acquired…
Uniform Guidance Compliance: Watch Out for 3 Danger Zones
Federal funding in response to the COVID-19 pandemic has meant that more nonprofits have found themselves subject to the Uniform Guidance for Federal Awards — the rules and requirements for obtaining federal grants. If they spent $750,000 or more in federal awards in a fiscal year, they’re also facing single audits, possibly for the first…
IRS Issues Guidance on LLCs as 501(c)(3) Entities
Nonprofits often use limited liability companies (LLCs) when they want to form subsidiaries to, for example, launch a new service or joint venture. However, federal regulations for tax-exempt organizations don’t specifically address LLCs. This makes new guidance from the IRS on the requirements an LLC must satisfy to be deemed tax-exempt welcome news. Guidance gap…
Updating Collective Impact Initiatives to Include Equity
Large-scale social change involving issues such as global warming, racial justice, economic development or education generally isn’t possible for individual nonprofits. An approach known as “collective impact” coordinates organizations across multiple sectors to tackle these larger issues. Here’s what you need to know before signing on to such an initiative. What is it? Collective impact…
How Federal Legislation May Affect DAF Distribution Timelines
A bipartisan group of legislators has introduced the Accelerating Charitable Efforts (ACE) Act in the U.S. House of Representatives. The ACE Act mirrors a bill introduced in the Senate in June 2021. It would create two new types of donor-advised funds (DAFs) — 15-year (or qualified) and 50-year (non-qualified) — with the timing and availability…