Volunteer Executive Director

Question from a recent Boot Camp attendee:
For a volunteer Executive Director, can the value of the salary they could be earning be included as in-kind professional service?

And the answer is: Not according to GAAP and IRS rules, it does not meet the characteristics of a donated professional service. BUT you could list this time on a proposal or funding request as an in-kind service, something to show them the value of the organization. It just is not an official contribution to the organization.

Donation Transactions

There were some questions at the latest boot camp on the specific journal entries for donations to be auctioned off or re-sold. From the great PPC Guides, I recommend them to any nonprofit finance professional, an excerpt:

"Organizations may receive contributions of gifts-in-kind to be used for fund-raising purposes. A common example is where an organization receives tickets, gift certificates, or merchandise from donors to be sold to others during an auction. An organization should recognize the donated item to be used for fund-raising purposes as a contribution and record it at its estimated fair value. When the item is subsequently sold (such as at auction), any difference between the item'’s initially estimated fair value and the amount ultimately received should be recognized as an adjustment to the original contribution amount.

For all practical purposes, the initial estimation may not be that important - the eventual contribution amount that is recognized will be what someone was willing to pay for the donated item. Organizations should use their best estimates when initially valuing the donated items and adjust the amounts later when the actual auction takes place. As a practical matter, the time period between the donation of items for an auction and the actual auction may be short. Accordingly, some organizations may wait to record the items until they are actually sold. That would not be appropriate, however, if the items were received before year-end and the auction was held after year-end.

Example: An organization is given a piece of jewelry valued at $3,000 to be auctioned off to the highest bidder at the organization's annual fund-raiser. The journal entry to record the initial gift-in-kind contribution is as follows:
Debit - Asset $ 3,000
Credit - Contribution revenue $ 3,000

At the fund-raiser, an individual purchases the jewelry for $5,000. The journal entry to adjust for the sale is as follows:
Debit - Cash $ 5,000
Credit - Asset $ 3,000
Credit - Contribution revenue $2,000

If the jewelry sold at auction for only $1,000, the journal entry to record the sale would then be as follows:
Debit - Cash $ 1,000
Debit - Contribution revenue $2,000
Credit - Asset $ 3,000"

Hope that helps! And you should check out PPC's guide to Expenses as well.

Multi State Solicitation Rules

Thaks to Shannon at Public Law Center for the information and link to filing for charitable solicitation in multiple states. Unified Registration Statement Kit

www.360financialliteracy.org

The AICPA's 360 Degrees of Financial Literacy can help you nonprofit accounting professionals talk about money with your family, help you plan your life's finances. Good stuff!

Something light...

Granted this really has nothing to do with nonprofit accounting but when I find a comic that mentions financial services I want to remember it!
qwantz.com - dinosaur comics - September 15th 2006

What resources do you use?

What blogs do you read, what websites do you visit that have resources for nonprofit accounting and finance?

CAN in the news

MercuryNews.com | 09/12/2006 | Local non-profits need fiscal oversight after peers' crises

An op-ed piece promoting and encouraging adequate fiscal oversite by nonprofit boards.

Fun Facts!

According to May 2006 data from the National Center for Charitable Statistics :

1. California has almost 11% of filing nonprofit organizations in the country (organizations who are required to file a form 990 tax return), 60,729, more than any other state.
2. CA nonprofits are third highest in gross receipts ($233,990,322,869) reported on the 990, just behind New York and Michigan.
3. CA nonprofits are first in total assets ($335,975,355,076) reported on the 990.

With numbers this big it really shows how valuable good financial tracking and reporting is.

Orange County Boot Camp

The event location has just been confirmed. Thanks to the nice folks at Citigroup who have funded this particular event for us for two years now!

Question for all you readers out there

From an email that was forwarded to me:

We are paying for a former employee's COBRA coverage. Normally, the carrier would bill us, and a third party associated with the carrier would bill the former employee and that third party would reimburse us.

All that is occuring in this case, but in addition, we are reimbursing the employee for the amount the third party is billing. This employee is also receiving severance checks through our payroll.

Would the COBRA reimbursements be subject to payroll taxes, workers comp, etc.? Currently, we are paying the COBRA out of A/P as a separate check from the severance payroll.

Any ideas?