Contracts vs. Grant Agreements

When a nonprofit organization receives funding, it’s important for it to know if it should classify those incoming funds as receipts from a contract, or receipts from a grant.  How the funds are categorized can lead to very different outcomes for the nonprofit organization. For example, the characterization will...

How Independent Audits and Audit Committees Protect Nonprofits

A nonprofit’s viability may depend heavily on the organization’s financial credibility. Proper financial management is essential to the health of any nonprofit and may be pivotal to the protection of the organization’s mission and consequent effectiveness and efficiency. Independent audits and audit committees can help nonprofits make informed financial decisions...

FASB Updates Not-for-Profit Accounting Standards

  The Financial Accounting Standards Board (FASB) released its Accounting Standards Update (ASU) 2016-14, Presentation of Financial Statements of Not-for-Profit Entities, on August 18, 2016. The Update modifies previous accounting standards and Generally Accepted Accounting Principles (GAAP) that have been in place for more than 20 years. According to the American...

UPMIFA: One Year Later

On January 14, 2009, Jill S. Dodd of Manatt, Phelps & Phillips, LLP and Bert W. Feuss of the Silicon Valley Community Foundation presented "UPMIFA: One Year Later" for the Northern California Planned Giving Council.  UPMIFA is the acronym for the Uniform Prudent Management of Institutional Funds Act, which...

Minimizing Financial Fraud

Despite the strong ethical culture of the nonprofit sector, the EthicsResource Center (ERC) has reported that financial fraud is more prevalent in nonprofits than for-profit businesses or the government. In their article, “Minimizing financial fraud” (Nonprofit Observer, Fall 2008), San Francisco Bay Area CPA Firm Lautze & Lautzeprovides a...

Avoid Common Accounting Missteps

In their Fall 2008 Nonprofit Observer publication, San Francisco Bay Area CPA Firm Lautze & Lautze offers advice on how to avoid 8 common accounting mistakes among nonprofits (summarized below): 1. Follow accounting procedures Every nonprofit, large or small, should establish a formal, documented, and detailed accounting process that...