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...
FASB Nonprofit Financial Statement Analysis
Nov 10,2017
In August 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2016-14, Presentation of Financial Statements of Not-for-Profit Entities (“ASU”). FASB’s agenda was separated into two phases of which Phase 1 has been included in the ASU. Currently, the FASB does not have a projected timeline for Phase 2. The financial statement project was initiated to ensure nonprofit reporting continues to meet the dynamic needs of users. Our nonprofit team has put together an analysis on the Accounting Standards Update 2016-14.
Cybersecurity Controls for Nonprofit Organizations: Mitigating Risks and Implementing Safeguards
Aug 08,2017
According to the Identity Theft Resource Center, U.S. companies and government agencies incurred a record 1,093 breaches in 2016, a 40% increase from the previous year. Breaches from widely known companies like Wendy’s and Target may grab the headlines, but the truth is, all enterprises are at risk, and nonprofit organizations are not exempt when it comes to being vulnerable to cybersecurity risks.Why would hackers target nonprofits specifically? Think about the treasure trove of sensitive information your organization may collect from donors and volunteers; it’s likely that you have plenty of Social Security numbers, bank account information and credit card information—especially if you take online payments and/or donations. At the same time, many nonprofit leaders acknowledge they do not know enough about the risks of failing to adequately protect personal information collected from employees, volunteers, clients and donors.According to the Ponemon Institute’s 2017 Cost of Data Breach Study, nearly half...
Series 2: FASB Nonprofit Financial Statement Project – Liquidity and Available Resources
May 19,2017
In continuation of our series on the impact of Accounting Standards Update 2016-14, Presentation of Financial Statements of Not-for-Profit Entities (“ASU”), issued by the Financial Accounting Standards Board (“FASB”) in August 2016, this article focuses on the topic of liquidity and available resources.  The ASU requires qualitative and quantitative information on the available cash flow for a nonprofit. These disclosures include the following: Qualitative disclosures: information in the notes to the financial statements that is useful in assessing a nonprofit’s liquidity and that communicates how a nonprofit manages its liquid resources available to meet cash needs for general expenditures within one year of the date of the statement of financial position. Quantitative disclosures: information either on the face of the statement of financial position or in the notes, and additional qualitative information in the notes as necessary, that communicates the availability of a nonprofit’s financial assets at the date of...

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