By NEO Law Group
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...
Charitable nonprofits organizations must comply with state prudent investment laws that apply to their investment assets. In California, as is the case in 49 of the 50 states, the Uniform Prudent Management of Institutional Funds Act (UPMIFA) sets the rules. Note that there may be some (mostly minor) variation...
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...
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...
In 2013, the White House Office of Management and Budget (OMB) issued historic guidance regarding the policies and procedures of federal grants. Applicable to all new written agreements (contracts and grants) signed after December 26, 2014, government agencies and departments that hire a nonprofit using federal funds must...
A board of a nonprofit is generally empowered to create committees at its discretion, subject to the organization’s bylaws and the laws of the state of its incorporation. For each committee it creates, the board should determine the level of authority to be given to the committee and...
For accounting periods starting on or after January 1, 2010, small California tax-exempt organizations are required to file an annual return with the Franchise Tax Board (FTB) by the 15th day of the 5th month after the close of the organization's tax year. Currently, tax-exempt organizations with annual gross...
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...
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...
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...
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