Sales and Use Tax Exemption Applied for Georgia’s Fine Arts Organizations
Jan 29,2019
On January 15, 2019, the Georgia Department of Revenue issued a letter ruling on the sales tax exemption for certain ticket sales to fine art performances. The sales of tickets to fine art performances held in a venue owned and operated by a §501(c)(3) organization are exempt from Georgia sales tax even if the nonprofit organization co-presents the performances with a for-profit organization. The sales tax exemption (in effect until July 1, 2020) applies to the sales of tickets, fees or charges for admission to certain fine arts performances or exhibitions in Georgia. The exemption is to be applied to §501(c)(3) organizations whose mission is to advance the arts in Georgia, and provide arts, educational, and culturally significant programming and exhibits for the benefit and enrichment of Georgia citizens. For purposes of the exemption, “fine arts” means poetry, photography, ballet, dance, opera theater, dramatic arts, painting, sculpture, ceramics, drawing, watercolor,...
Are Grants Subject to Revenue Recognition?
Nov 06,2018
Nonprofits received long-awaited clarification on a key accounting question from the Financial Accounting Standards Board. As discussed in the article on page 1, the FASB released a final accounting standards update (ASU), Not-for-Profit Entities (Topic 958): Clarifying the Scope and the Accounting Guidance for Contributions Received and Contributions Made. The ASU aims to standardize how grants and other contracts are classified across the sector, as either an exchange transaction or a contribution. Classifying grants as either a contribution or exchange transaction is the first step in implementing revenue recognition. The clarified guidance in ASU 2018-08 aims to help nonprofits complete that first step in a consistent way across the sector. This article outlines a practical example of the process to evaluate a grant under the new ASU. Practical Example: How to Evaluate a Grant Under the New Guidance Description of ‘Nonprofit A’: A large research association that specializes in space exploration. Its mission...
5 Things to Know About Substantiating Donations
Nov 06,2018
There are virtually countless charitable organizations to which you might donate. You may choose to give cash or to contribute noncash items such as stock, personal property or real estate. Whatever you donate, once you do the good deed, you owe it to yourself to claim a tax deduction (provided you itemize rather than taking the standard deduction). One requirement is documentation. And precisely what you’ll need depends on the type and value of your donation. Here are five things to know about substantiating charitable donations: Cash contributions of less than $250 are the easiest to substantiate. A canceled check or credit card statement is sufficient. Alternatively, you can obtain a receipt from the recipient organization showing its name, as well as the date, place and amount of the contribution. Bear in mind that unsubstantiated contributions aren’t deductible. So you must have a receipt or bank record. Noncash donations of...
Nonprofits’ New Commuter Headache: Tax on Transportation Benefits
Oct 09,2018
Does your tax-exempt organization provide transportation and parking benefits to employees? If so, you may have another commuter headache: a new tax. Under the tax reform law, a provision was added to the Internal Revenue Code that will likely require many tax-exempt organizations to pay unrelated business income tax (UBIT) on transportation benefits. Certain costs of qualified transportation, including transit passes, qualified parking and more, will now be taxed as unrelated business income at 21 percent. The law added the following provision to the Internal Revenue Code: Internal Revenue Code (IRC) Section 512(a)(7): Increase in unrelated business taxable income by disallowed fringe. This provision was an attempt to put exempt organizations on the same footing as taxable organizations that will no longer be able to deduct these costs as a result of the tax reform law. The provision is effective for amounts paid or incurred after Dec. 31, 2017. Under...
Sean Taylor’s Article Published in Nonprofit Information
Jul 11,2018
With the passage of the Tax Cuts and Jobs Act (TCJA) this year, nonprofits are steeling themselves for increased competition for decreased donations – an anticipated result of the change in charitable contribution deduction rules. Some nonprofits looking for an edge are exploring the option to accept cryptocurrency for donations. The most commonly referred to cryptocurrency is Bitcoin, but there are numerous currencies available. While adding this as an option for donors may increase the organization’s reach and its reputation for being on the leading edge, it comes with some cautions and important safeguards. Read Sean’s full article here.
Survival Tips for the New Era of Fundraising
Jul 09,2018
For nonprofits looking to stand out in an increasingly crowded giving landscape, experimenting with new giving models and integrating new technology into your current campaigns could help you stand out from the crowd. If the bulk of your fundraising budget is still directed toward age-old direct mailing campaigns, consider diversifying and exploring a few of the following emerging trends. Match Donor Behavior What influences someone to donate to an organization? While many Americans make regular contributions to priority causes, successfully converting new donors takes a combination of two elements: (1) A compelling case for why your organization’s work matters, and (2) a clearly articulated value proposition, or the impact of their individual donation. But a poignant campaign is only half the battle. If your organization relies solely on wire transfers or other slow processes to accept donations, you’re unlikely to see money pouring in. Nonprofits that limit the barriers to giving and...
Mission Matters
Jul 09,2018
A mission statement is more than mere words plastered on a website or at the top of an annual report – it represents everything an organization stands for and all that it can accomplish. It drives the organization and its work. There is a cyclical ad infinitum relationship between a nonprofit organization’s mission, its impact, and its fundraising efforts. Developing a powerful mission statement is critical to clarifying: the core purpose for why the organization exists and its goals what makes the organization different than the other 1.5 million nonprofits operating in the U.S., and directional focus, serving as a guidepost for decision-making to keep actions on-point and avoid mission creep While a powerful mission is critical to a nonprofit’s success, mission alone won’t bring funding to your door. Prove Your Worth How is your organization delivering on its mission? With fewer donors giving to fewer organizations today and donor retention declining, it’s more important than ever...
Is Your Nonprofit Financially Fit?
Jul 09,2018
Being financially fit and stable is critical to any business, including a nonprofit. If a nonprofit has a weak financial position, it may not be able to sustain its operations. While the perception by many in today’s society is that most nonprofits are generally financially healthy, this is not always the case. For example, a recently published report noted that 41 percent of charities do not expect to make a profit over the next three years. A nonprofit’s liquidity is an important story to convey to the users of its financial statements. To determine the overall financial health of an nonprofit, you need to understand its financial statements. You should be able to find a copy of the nonprofit’s financial statement that you are interested in analyzing on the nonprofit’s website or obtain it by requesting it. Evaluating these documents will provide insight into the nonprofit’s financial health and the basis on...
Six Tax Reform Issues Impacting Nonprofit Organizations
Jul 09,2018
The Tax Cut and Jobs Act of 2017 (the “Act”) will have a profound impact on tax-exempt organizations. Even those that don’t report unrelated trade or business income or pay their executives over $1 million may still be affected. Here are the top six tax reform-related issues nonprofits will need to address: 1. Internal Revenue Code (IRC) Section 512(a)(7): Certain qualified transportation fringe benefits, including those relating to parking garages, must be reported as unrelated business income (UBI). All tax-exempt organizations will have to include as unrelated business taxable income (UBTI) any amount paid or incurred for any qualified transportation fringe benefit or any parking facility used in connection with qualified parking. If an organization has a parking garage that offers free parking to its employees, the new law says that the costs paid or incurred by the organization for providing the parking must be included in its UBTI. However,...
How to Set the Stage for a Successful Event
Nov 27,2017
Even with all the ways we interact online, meeting and interacting in person fosters positive shared experiences that devices can’t match. Those positive shared experiences create the context for trusted relationships, whether that’s with business partners, current or prospective customers, organization members, constituents, or donors to your nonprofit. One approach to creating an environment for these shared experiences is hosting or sponsoring events.At Smith & Howard, the development and execution of seminars and networking events is a key marketing and business development strategy in our organization. We stage multiple events each year and these serve as the cornerstone of our client and business associate community.If you stage events yourself – or are considering launching an event – we offer these tips for planning an event that will not only create a return on your investment but do so with as little stress as possible.First, Know the “Why”Starting with why has...

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