Your Nonprofit Advisor

Management, Marketing and Fundraising Consulting for Nonprofit Organizations

.WHO SETS THE RULES ON NONPROFIT ACCOUNTING AND REPORTING


IRS - Grants orgainzations that meet their qualifications 501 (c) 3 charity status and has very specific requirements for nonprofit accounting and contributions.  Almost every document you will ever need for reference can be found on page https://www.irs.gov/charities-non-profits/charitable-organizations/life-cycle-of-a-public-charity        The 990 is considered the last word in comparing nonprofits to each other.   FLA's 990 is automatically posted to a variety of websites (Guidestar).

State of Florida - uses the 990 to publish the online Gift Givers Guide  that people reference for comparitive information on nonprofit performance.     https://csapp.800helpfla.com/cspublicapp/giftgiversquery/giftgiversquery.aspx


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Non profits are supposed to comply with GAAP prinicipals (Generally Accepted Accounting Principles). GAAP policies are set primarily by two entities:
Financial Accounting Standards Board (FASB) - FASB pronouncements are known as SFAS's
American Institute of Certified Public Accounts (AICPA) - AICPA pronouncements are know as SOP's.
This August FASB announced NEW Accounting Standards Update (ASU) No. 2016-14, Presentation of Financial Statements of Not-for-Profit Entities (Topic 958).  This specifies how nonprofits are to present their financial reports.  You do not want to read this document but for reference http://www.fasb.org/jsp/FASB/Document_C/DocumentPage?cid=1176168381847&acceptedDisclaimer=true.The sample financial report (pg 158 of the new guidelines) below shows the existing standards and the new changes for nonprofit financial reports.  In FLA's case I believe the License Plate funds would show up under Government Grants in the Donor Restrictions column.
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 A simplified explanation of what the new FASB Financial Statements are supposed to achieve can be found on the AICPA's website at
http://www.aicpa.org/InterestAreas/NotForProfit/Resources/FinancialAccounting/Pages/new-standard-aims-to-improve-not-for-profit-financial-reporting.aspx


FUNCTIONAL ALLOCATION OF COSTS ( IRS 990 INSTRUCTIONS PG 41)


Management & General


Expenses for overall function and management, rather than for the direct conduct of program or fundraising activities
General legal services
Accounting (including patient accounting and billing)
General liability insurance, office management, audit, personnel, other centralized services
Publication and distribution of an annual report
Investment expenses
Staff time not spent on program or fundraising activities


Fundraising


Fundraising expenses are incurred in soliciting contributions, gifts, grants, etc.
Publicizing and conducting fundraising campaigns
Preparing and distributing fundraising materials
Soliciting bequests and grants

The Overhead Myth -  GuideStar, BBB Wise Giving Alliance, and Charity Navigator have collaborated on a movement to educate the public on the costs of delievering programs and how to evaluate them.       http://overheadmyth.com/faqs/


RESOURCES FOR POLICIES AND STANDARD OPERATING PROCEDURES


The has lots of resources at https://nonprofitsassistancefund.org/resources   This includes a very simpliefied Policy template at https://nonprofitsassistancefund.org/sites/naf-prod/files/publications/financial_policy_guidelines_and_example_2014.pdf


The Wallace Foundation has lots of information on Strengthening Internal Controls   http://www.wallacefoundation.org/knowledge-center/resources-for-financial-management/Pages/Operations.aspx 

 


Nonprofit Financial Policies and Procedures Handbook
Downloadable Nonprofit Policy Samplers
Internal Controls Checklist
RESOURCES FOR BOARD FINANCIAL LITERACY TRAINING


Board Source Financial Literacy for Board Members - 3 files are attached
Nonprofit Assistance Fund

Balance Sheet Basics: What We Have, What We Owe, What We're Worth  Video  
Balance Sheet Cheat Sheet  
Income Statement Basics: What's Behind the Bottom Line Video (This is short and sweet so would be good for a board meeting)


RESOURCES FOR AUDITS
Nonprofit Audit Committees versus Finance Committee Responsibilities
https://www.councilofnonprofits.org/nonprofit-audit-guide/audit-finance-committee

Small Nonprofit Audits
http://www.vscpa.com/Content/Files/vscpa/Documents/2011/Audit.pdf