New stats and trivia

Well, kinda new. The IRS release its Fall 2007 Statistics of Income Bulletin. The "new" info is from tax year 2005, here is a taste:

• A look at private foundations: The number of private foundations that filed Form 990-PF remained nearly the same between tax years 2003 and 2004,while the number of nonexempt charitable trusts treated as private foundations that filed the return increased by 12 percent. In tax year 2004, private foundations distributed $27.6 billion in contributions, gifts, and grants and other outlays for charitable purposes, while nonexempt charitable trusts distributed $314 million.
• Recent data on charities: For tax year 2004, nonprofit charitable organizations exempt from income tax under Internal Revenue Code Section 501(c)(3) filed more than 276,000 information returns, an increase of 5 percent from 2003. These organizations held more than $2.0 trillion in assets, a real increase of 5 percent from the previous year and 52 percent over the past decade.

2008 Mileage Rates

Heads up for 2008, the changes have been announced:

Beginning Jan. 1, 2008, the standard mileage rates for the use of a car (including vans, pickups or panel trucks) will be:

• 50.5 cents per mile for business miles driven;
• 19 cents per mile driven for medical or moving purposes; and
• 14 cents per mile driven in service of charitable organizations.

More info on the whys and hows can be found here.

5th Annual "Stop Spam Today!" Campaign

Do you like Spam? No? Then the following from TechSoup may be for you:

Join the 5th Annual "Stop Spam Today!" Campaign at TechSoup Stock. Sign up for free anti-spam software from Mailshell.

For just 24 hours on December 5, nonprofit organizations and public libraries can request free anti-spam desktop software, donated by Mailshell, at TechSoup Stock. This special offer is part of the 5th annual "Stop Spam Today!" campaign.

You will need to register with TechSoup to get the free software. Sometimes that can take awhile so get it done in advance to be ready.

Boot Camp Q & A - Gifts-in-kind Valuation

Several questions from the last book camps have been about non-cash donations and how to value them. The PPC Guide to Contributions has the best guidance out there on the subject and I still highly recommend them, a worthy investment for your nonprofits financial well being.

Q: How do we value food donations for our, "Taste Of..." event?

A: Fair value must be determined. According to SFAS 157, Fair Value Measurements, the fair value is, "the price that would be received to sell an asset or paid transfer of liability in an orderly transaction between market participants at the measurement date. The quoted price for identical assets in an active market is the most reliable evidence."

For this question, if a restaurant is providing you with 300 deserts, what do they sell the deserts for? If they are catering at your event, what do they normally charge for catering? Those quoted prices (or better yet and invoice) would be what you would use to value the donations.

Q: Can the suggested starting bid on an item to be sold at auction be used as the fair value?

A: Yes, with exceptions. If a vendor gives you something to auction for your charity event and places a "suggested starting bid" sticker on it, that can be used. But if you have sold similar items before and what they suggest doesn't match what you have used in the past that suggestion won't work. Checking other resources on how the item might be valued would also be a good idea.

Q: We have a golf tournament where everything is donated. Donors then buy tickets for the event. Is the whole ticket deductible to the those donors?

A: From what I can tell it is not. The non-deductible portion of the ticket represents the estimated fair market value of the goods or services received by the donor in return for the contribution. How much would the donor normally have had to pay to play golf at the location? The fact that the nonprofit did not incur any costs for the facility is irrelevant to the benefit received by the donor.

Q: What are some resources for valuing donations?

• Association of Evangelical Relief and Development Organizations

• Determining the Value of Donated Property (IRS pub. 561)
  
  
• eBay.com
  

• Salvation Army's Donation Valuation Guide

• SFAS 157, Fair Value Measurements

• TurboTax ItsDeductible

Financial Risk Management

CAN has been a satellite office of the Nonprofit Risk Management Center for years. They are a great organization and know how to take something that many would consider boring and make it interesting, captivating and relevant to nonprofits.

They have a new book coming out, Financial Risk Management: A Guide for Nonprofit Organizations:

This brand-new book explores the topic of financial risk management in the nonprofit world. Subjects covered in this practical, how-to guide include financial accountability, fraud prevention and board-staff communication on financial management issues.

It is available for pre-order now, I can't wait to get my copy!

e-Postcard - Proposed Regulations

From the IRS website:

"The IRS and Treasury Department propose to adopt temporary regulations on the electronic notice requirement for certain small tax-exempt organizations as final regulations. The temporary regulations describe the time and manner in which certain small organizations not currently required to file annual returns are required to provide an annual electronic notice."

To find out about the regulations and to comment on them should you so desire go here. Please feel free to share your comments here in our comments section as well.

Boot Camp Questions & Answers

Some questions from the latest boot camps. More to come!

Q: What is the pay rate for comp time?

A: According to HRCalifornia.com you must pay at the rate the time is used, not when it was accrued. Compensatory time off is a very tricky issue and any employer currently offering it or thinking of offering it needs to be aware of all the issues surrounding it. HRCalifornia.com recommends you not offer it for the most part, and be sure never to give comp time to exempt employees.

Q: Do internal transfers count as income under SB 1262 rules for determining when we need to get an audit?

A: No, not according to the text. Only "gross revenue." But be careful how you are booking and describing the transfers to be sure that you are not calling it income, if indeed it is not.

Q: Do we have to pay California state sales tax on auction items?

A: Check out this earlier post.

Employment Eligibility Verification (I-9 form)

Assuming that the person keeping the books at your nonprofit is also doing some or all of the HR work I give you this: The I-9 Employment Eligibility Verification form was updated in June of this year. It includes changes to what documents are consider OK to prove eligibility to work.

All employers are required to fill these out for new employees and after November 7th 2007 you have to use the new form, not any old ones you have laying about.

So take heed and get the new form here.

Thanks Kim!

Updated Form 990 Update

So word from the Independent Sector Conference in Los Angeles last month is that the IRS has listened to some of the requests for changes that you, me and others made.

Two changes I am happiest about are that the summary ratios will be dropped from the front page and that the program service explanations will be moved to the front. The above link will also take you to a PDF of the speech that Steve Miller, Commissioner of the Tax-Exempt and Governmental Entities Division of the IRS made.

They are still set to roll it out for fiscal years ending 12-31-08 and we should get final word about what is happening by the end of the year.