Online Donations OK By IRS

The IRS released an Information Letter on March 29, 2013 stating that there is no prohibition against a 501(c)(3) utilizing an internet fundraising platform to raise funds. Which is good because that’s been around for a few years.

They did include some good suggestions.

• Be sure to consider any state laws and regulations that may apply.
• Be sure to make it clear on the website the status as a 501(c)(3).
• Providing something of value to donors may violate the rules against private benefit or inurement, so be sure to disclose the value and a statement that it is de minimus (unless it isn’t).
• Be sure to disclose whether or not, and how much, of a donation is tax deductible for the donor.

Read the letter here.

Charity Overstated Revenue by $222-Million and You Thought Your Restatement Was Bad

A Christian relief charity, World Help, grew rapidly in recent years but not as rapidly as originally reported. The organization’s Form 990 reported $239-million in revenue for 2011. The audited figure came in at $17-million. That’s 1400% off-base for those of you punching your 5-key along.

Once again, we have an issue of claiming value for donated medicine which is an ongoing blight in the nonprofit community, but in this case, the donors say they never gave any donation. The finger-pointing is heated and people are no longer cooperating with the press.

A significant impact is to the recipients of the donated medicine. The restatement has caused organizations that received goods from World Help to go scrambling to ensure their valuation is accurate and supportable.

Restatements are never fun but just think of World Help to help you keep perspective when you feel scandalized by one. Read more about the story here.

Man Admits to Embezzling $1.1Mil from Atlanta Non-profit

Ralph Clark was the Director of Facilities at the Woodruff Arts Center in Atlanta, GA, comprised of the Atlanta Symphony Orchestra, Alliance Theatre,  High Museum of Art, and Young Audiences. He plead guilty to charges of embezzling over $1.1 million from the organization over approximately 8 years.

A few different schemes were in place. As part of his leadership position, he was allowed to authorize any vendor contracts up to $50,000.  He arranged for kickbacks  from vendors that totaled $168,000. He signed off on $780,000 worth of invoices for services that were not performed by his wife’s cleaning company. He billed $41,000 for services supposedly performed by students and $153,000 for services supposedly performed by himself after hours. It is unlikely much of any of that will get repaid.

According to the Atlanta Journal-Constitution, “some observers in the city questioned [the organization's] management oversight.”

Read more about the case here.

Ace Your School’s Annual Audit!

All public charter schools, and many private schools and parochial institutions, undergo an annual audit. While best practice is to structure work throughout each year to ensure a clean audit, now is a good time to assess where you are and address potential deficiencies. A little preparation goes a long way in ensuring a smooth and painless audit.

 Join Craig Stevens and Rob Eby of Aronson LLC for a free webinar led by Brad Olander, CEO of GoldStar, on May 16th at 11am.  During this convenient 30-minute session, we will address common questions including:

•  What does working throughout the year with the audit in mind look like?
• How do you assess potential deficiencies now?
• Who should be involved in the audit planning process?
• What are typical key audit tasks, processes, and deliverables?

 Executive directors, controllers, CFOs, principals and other school professionals serving in an administrative or finance role should register today for this important webinar!

 If you missed April’s webinar: “Financial Reporting-Support your board so they can support you,” be sure to visit our resources page to download the webinar!

Webinar: Financial Reporting at Schools – Support Your Board, So They Can Support You

Effectively communicating financial performance to your Board is a critical skill.

Your board is the fiduciary of your school and a key resource for your management team. Your Board must understand your school’s financial performance—and where it is likely headed—to perform their oversight role and to support management in achieving organizational goals.

What does an effective financial presentation to a Board look like? How do you convey information that supports decision making, keeps the conversation on point and out of the ‘weeds,’ and is accessible to Trustees without a financial background? How do you ensure your board has the understanding to help you build the financial strength that will in turn support achieving educational goals?

Join Craig Stevens and Rob Eby of Aronson LLC for a free webinar led by Brad Olander, CEO of GoldStar, on April 17^th at 11am. During this convenient 30-minute session, we will address these critical questions including:

• What information should you present?
• How should it be presented?
• How detailed should it be?
• How to balance discussion of current results with forecasts?

 Executive directors, controllers, CFOs, principals and other school professionals serving in an administrative or finance role should register today for this free event!

Register HERE

Type: Webinar

Date: April 17, 2013

Time: 11:00-11:30AM

Price: FREE

Location: Via WebEx

Webinar on Compensation in Faith-Based Organizations

The Evangelical Council for Financial Accountability (ECFA) is having a webinar this Thursday, February 21, 2013 on setting compensation for top leaders of faith-based organziations.  

 The first 50 people to register for this webinar using promo code CompSet will receive a $10 discount.  

Find out more and register here.

Coping with the Change in Mailing Rates

Non-profits may lose the discount for postage rates but could that be just the push they need to focus on using the internet to raise funds? In early October 2012, the United States Postal Service (USPS) announced their proposal for postage increases to take effect on January 27, 2013 and which has since passed the Postal Regulatory Commission (PRC) review.

Opposition to the new rates includes among its leaders Jason Lee, General Counselor for the Association of Fundraising Professionals, and the Alliance of Nonprofit Mailers, a US national coalition of nonprofit organizations. Opposition retorts that nonprofits are besieged from a budget standpoint as our nation’s leaders attempt to rein in federal spending and this assault will impede the efforts of nonprofits to fill in the gaps for state and local government aid programs for the poor. The argument is that the legislation will punish nonprofits and the people they serve, and the USPS should not punish nonprofits for its own inability to control its own costs. Ultimately, in the long run, nonprofits will end up using less mail as a response to the change in rates, which will in the end hurt the USPS. Continue reading »

Ways and Means Hearing on Charitable Contribution Tax Deduction

Just in time for Valentine’s Day, the House of Representatives Ways and Means Committee held a hearing featuring over 40 witnesses testifying in favor of protecting the charitable contribution tax deduction.

Large nonprofits were in attendance, including: Council on Foundations, Meals on Wheels, Jewish Federations of America, and the United Way, among others. Participants in the hearing were pushing the committee to not institute a cap on charitable deductions and discussed other topics including valuation of noncash donations and mileage reimbursement incentives for volunteers.

United Way Worldwide President & CEO Brian Gallagher testified, “Don’t be fooled into thinking that limiting the deduction will only impact wealthy taxpayers. If the deduction is reduced, expect donors to withhold the difference necesary to cover the tax from their donations.” Estimates of the impact of a 28% cap to United Way’s donations projected a reduction in donations of more than $100 million annually.

Read more about the seven hour hearing here.

New Markets Tax Credit Benefits Nonprofits

The New Markets Tax Credit (“NMTC”), under IRC §45D, was created as part of the Community Renewal Tax Relief Act of 2000. This act encouraged qualified equity investments (“QEIs”) in community development entities (“CDEs”) directed towards low-income communities. President Obama recently extended the NMTC in January of 2013 as a part of the American Taxpayer Relief Act of 2012. The NMTC rewards investors with a 39% tax credit of the total QEI, which is split over a seven year period. There is also additional return to investors who make a low-return project viable.

The CDEs also benefit with a 25% reduced cost of borrowing and lower interest rates than could otherwise be attained. Programs must apply to become CDEs; awards totaling up to 3.5 billion are announced annually. The stimulated investments lead to job and material improvement in the residents of struggling communities. Many CDEs serve as intermediaries for providing loans and investments in low income areas, which lead to increased economic activity.

To qualify as a CDE, the program must be located in a distressed community which displays at least one of the following characteristics:

• The poverty level is above 20%.
• The median family income less than 80% of the average family.
• The community is composed of a specified targeted population.
• The population is less than 2000 people.
• It is a rural county with high migration.

The Aronson Foundation Donates $5K to So Others Might Eat (SOME)

Aronson LLC and the Aronson Foundation were pleased to announce that they have made a $5,000 donation to So Others Might Eat (SOME), a DC nonprofit that has “helped thousands of people get off the streets, transform their lives, and live independently.”  The donation was made as part of Aronson’s holiday party and 50^th Anniversary celebration. 

“Our work wouldn’t be possible without generous support such as this gift from Aronson LLC and the Aronson Foundation.  With nearly 7,000 homeless men, women and children living in the District, there is a great need that they are helping to fulfill.”  -Fr. John Adams, President of SOME.

SOME is an interfaith, community-based organization that exists to help the poor and homeless of our nation’s capital. They meet the immediate daily needs of the people they serve with food, clothing, and health care. SOME helps break the cycle of homelessness by offering services, such as affordable housing, job training, addiction treatment, and counseling, to the poor, the elderly and individuals with mental illness.

Jeff Capron, Aronson LLC’s Managing Partner and President of the Aronson Foundation, commented, “SOME is an amazing group of people who for years have been a steady, committed and transforming influence on the community.  We are happy to be able to support their efforts as part of our mission of providing assistance to organizations that help make the Washington Metro area such a great place to live and work.”

The Aronson Foundation, established in 2004, is a public charity that grants charitable contributions to organizations like SOME that have dedicated themselves to providing services that enhance our community and help the people in it thrive and succeed. All of this is made possible through the generosity and enthusiasm of the partners and employees of Aronson LLC.