Moving On

Just a quick note to say that I am moving on from the California Association of Nonprofits (CAN). My last day in the office will be this Friday, December 12. After the first of the year, I will continue my work as a consultant and trainer in the area of nonprofit accounting and finance and continue blogging and providing resources as well.

It has been my pleasure to work with CAN for nine years to help the nonprofit sector, to develop and lead the Nonprofit Accounting Boot Camps and other financial trainings (1,300 trainees across the state and nation!) and to speak with thousands of you on our helpline and at our events around the state. I look forward to continuing my relationship with you in the years to come and I want to say thanks to all of you for helping me learn about and grow with this sector over the last nine years. It has been an interesting journey, and I could not have done it without you.

It is hard to believe that this blog has been up and running for over a year and a half, and that we get almost 2,000 readers a month. Thank you for that as well. I'm not sure what the status of this blog will be in the weeks and months ahead but I will continue my interest in the area of nonprofit finance and accounting in another forum for those of you who are interested in reading yet another not-for-profit accounting blog.

I wish you a happy and relaxing holiday season.

Alan J. Strand
Interim Executive Director, California Association of Nonprofits (until 12/31/08)
Principal, Strand Financial Services (starting 1/1/09)
www.notforprofitaccounting.net

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News from the IRS

For those of you who don't subscribe to the IRS's Exempt Organization Update here are some highlights:

1. Nothing revolutionary but they seem to have reorganized some of their existing resources into a new spot. Seems to be a bit better laid out, all in one place.
2. Commissioner Miller's latest remarks about nonprofit governance can be found here, a PDF of his remarks at the Western Conference on Tax Exempt Organizations in November 2008.
3. The IRS's 2009 Exempt Organization Work Plan. Read this PDF to find out what the Internal Revenue Service will be up to in 2009 with regards to nonprofits.

2009 Mileage Rates

Heads up! The IRS has released its 2009 mileage rates. Here is an excerpt from the news release:

The Internal Revenue Service today issued the 2009 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes. Beginning on Jan. 1, 2009, the standard mileage rates for the use of a car (also vans, pickups, or panel trucks) will be:

• 55 cents per mile for business miles driven
• 24 cents per mile driven for medical or moving purposes
• 14 cents per mile driven in service of charitable organizations

For the full press release click here. To learn more about efforts to raise the reimbursement rate for miles driven in service of charitable organizations please click here.

More Resources

Two more resources and links that I remembered I said I would share with all of our workshop participants.

The first is the the organization called BoardSource, a nonprofit dedicated to helping and improving nonprofit governance. They have a nice series of short books on governance, called the New Governance Series that touches on topics such as board organization, structure and financial management.

The other resource asked for was a sample gift acceptance policy which the new form 990 asks us for. It seems like those are pretty unique to the nonprofit but here is a list of ones that can be found on line from the Foundation Center. These could be used to help us get started crafting our own. If anyone has other sample policies they would like to share let me know and I will put them up here too.

Nonprofit Accounting Questions

Here are some more questions and answers from recent nonprofit accounting trainings trainings I have done.

Q: What is the difference between a 501c3 and a trade group?
A: Check out these publications from the CA Attorney General's office and this listing of resources from the IRS.

Q: What is admin? Just what are administrative costs:
A: Please read this from the National Center of Charitable Statistics.

Because of the diverse characteristics and accounting practices of non-profit
organizations, it is not possible to specify the types of cost which may be classified as indirect cost in all situations. However, typical examples of indirect cost for many non-profit organizations may include depreciation or use allowances on buildings and equipment, the costs of operating and maintaining facilities, and general administration and general expenses, such as the salaries and expenses of executive officers, personnel administration, and accounting.

Q: What is the minimum reporting threshold for filing a w2-g?
A: Please read this from the IRS (opens in a PDF).

Q: What is deferred revenue?
A: Check out these search results for the answer.

Q: Where to find compliance questions and answers from the IRS? How do we stay exempt?
A: The IRS has some good information here.

Q: Where can I find more information on the rules governing commercial fundraisers?
A: From the CA Attorney General's office here and here.

Q: Where are some discussions regarding excessive fundraising costs?
A: In the above commercial fundraiser links and here and here.

Again, if you have any other questions please let me know.

New 990 Resources and Links

Thanks to all the people who have come to our recent, "New 990" workshops. Below are a list of questions from them and resources I said I would post. If I miss any or you have other questions please feel free to put them in the comments below.

• Form 8734 - the end of advance ruling form is no longer required for groups who's advance ruling periods expire on or after June 8th 2008. Click here for the details.
• The IRS's recent 990 webinar is still available on line for folks who want to know more.
• Here is a link to SOP 98 2 issues regarding joint costs (costs that have BOTH a fundraising component and a program component. be careful with these, they can get you into trouble if you do not know the rules and the IRS is looking closer at this stuff.
• Here is the complete list of new 990 forms, instructions and schedules including J which list all the types of reportable compensation
• Other websites I referred to:
  www.stayexempt.org - helpful IRS resource
  www.guidestar.org - where our 990's reside
  hrcalifornia - labor and employment issues
• There was a question on schedule G part II. the text reads, "Events. (Complete this part if the organization reported more than $15,000 on Form 990, Part VIII, line 8a or
  Form 990-EZ, line 6a. List events with gross receipts greater than $5,000.)" The questioner asked why the 990 amount was $15,000.00 and the 990-EZ amount is $5,000.00. I had no idea until I looked at it now and realized there is a period that separates the two sentences. The $15,000.00 amount is for both the 990 and 990-EZ.
• Another question was asked about question 6 of part I of the core form, why does the IRS need to know the number of volunteers a nonprofit utilizes? I'm not really sure, maybe someone out there knows? Here is the text from the form 990 instructions:
  

  Line 6. Number of volunteers. Provide the number of volunteers, full-time and part-time, who provided volunteer services to the organization during the reporting year. Organizations that do not keep track of this information in their books and records or report this information elsewhere (such as in annual reports or grant proposals) may provide a reasonable estimate, and may use any reasonable basis for determining this estimate. Organizations may, but are not required to, provide an explanation in Schedule O of how this number was determined, and the types of services or benefits provided by the organization’s volunteers.

If I missed any question please let me know.

Accounting Boot Camp Questions

Below are some questions and answers from recent nonprofit accounting trainings I've led.

• Is there a minimum dollar threshold for registering our nonprofit's raffle with the state of California?
  No but click here for more.
  
• Does the charity report the raffle winners to the state?
  No it does not.
  
• Can a nonprofit accept a donation of the use of a donor's timeshare?
  Yes, but the donor will not get a tax deduction for the donation of the use of the time share. See Publication 526, all about contributions to nonprofits.
  
• Where can I find more information on the new 990?
  At the IRS website stayexempt.org the have a series of mini-courses on various topics including several on the new 990, walking you through the whole form. They are 20 to 30 minutes each and free.

Contact me if you asked a question and I didn't get to it.

CAN Confernece Session Update

For those of you who attended CAN's 17th Annual Conference and my session on Accounting for Non-Accountants, thanks for coming! Here are some additional resources and links:

• The IRS Guide to Good Governance can be found here, sorry I forgot to add it to the handouts.
• Those of you interested in sample Auditor's reports please click here.
• The details on California's Nonprofit Integrity Act as it relates to Commercial Fundraisers (opens a PDF).
• Has the 990 PF Changed? Not yet.
• For those interested in the potential shift from GAAP to IFRS click here.
  
• When do we file the new 990? Read below or click here for a PDF of a general overview of the instructions.
  

  Calendar year - Use the 2008 Form 990 to report on the 2008 calendar year accounting period. A calendar year accounting period begins on January 1 and ends on December 31.
  
  Fiscal year - If the organization has established a fiscal year accounting period, use the 2008 Form 990 to report on the organization’s fiscal year that began in 2008 and ended 12 months later. A fiscal year accounting period should normally coincide with the natural operating cycle of the organization. Be certain to indicate in the heading of Form 990 the date the organization’s fiscal year began in 2008 and the date the fiscal year ended in 2009.

Let me know if you have any other questions.

More 990 Resources

The last post listed an IRS webinar for the new 990 and I put up a to-do list a while back. You think I would be done touting new 990 resources but you would be wrong! In the spirit of making sure there are enough resources noted out there to satisfy as many people as possible I give you one more. A big hat tip to Nancy at Non-profit accounting help for pointing out this resource from avenue2possibilities. It includes samples of many of the policies the new form 990 will be asking about and a workbook and checklist to go through to help make sure you are ready. So now all you have to do is put the policies in place!

And if they ever create a New 990 Comic Book you will hear about it here first thing, promise.