Tax on Unrelated Business Income of Exempt Organizations - An exempt organization is not taxed on its income from an activity substantially related to the charitable, educational, or other purpose that is the basis for the organization's exemption. (IRS)
Overhead or administrative spending has become a way that many funders measure how well a grantee is doing, but a growing number of funders and nonprofits are finding that it does not paint an accurate picture of a nonprofit’s financial health, sustainability, or overall effectiveness.
An audit committee is considered a best practice for nonprofits. It helps the governing board perform its fiduciary and financial oversight roles, reduce risk, and maintain donor confidence.
© North Carolina Center for Nonprofit Organizations, Inc. From Common Ground, a publication of the North Carolina Center for Nonprofits, www.ncnonprofits.org.
Additional resource:
Tracking volunteer time: sounds like another chore? Actually it can help you meet match requirements, improve your financial statement presentations, and reduce liability. This article explains why and how to include volunteer time in your budgets and financials. (Blue Avocado)
Tracking Volunteer Time to Boost Your Bottom Line: A Complete Accounting Guide
Healthy nonprofit organizations employ financial management practices that build stability and flexibility both today and in the future. In Nonprofit Finance: 12 Golden Rules, Propel Nonprofits sets out the twelve golden rules for nonprofit finance, including budgeting, diverse funding sources, and interdependence.
An Employer Identification Number (EIN) is also known as a Federal Tax Identification Number, and is used to identify a business entity. It is a nine digit number that the IRS assigns to organizations in the following format: 00-0000000 (en español).
Top 5 Missteps to Endowment Management under UPMIFA - "UPMIFA completely overhauled the rules for managing donor-restricted endowments and the accounting standards were also updated in response. However, many organizations have still not realized that the rules have changed; they have continued to follow the principles of the old rules and may not even realize that they are out of compliance." (PBMares, 2021)
Your organization may be growing and need extra hands on deck to maintain the recordkeeping. Or, maybe it's small and needs external help to manage finances. Either way, working with outsourced accountants may benefit your operations and save you money.
© North Carolina Center for Nonprofit Organizations, Inc. From Common Ground, a publication of the North Carolina Center for Nonprofits, www.ncnonprofits.org.
This piece is good to share with board members as a base of commonly understood information that will help them manage loans better against the blips, delays and growth tracks in nonprofit finance.
Knowing your nonprofit’s actual costs is common sense. Fortunately, an increasing number of enlightened donors, grantmakers, and government partners are recognizing the reality that essential costs include not only direct program costs, but other costs too – whether referred to as "overhead," "management and general," "administrative," or "indirect costs."
What does it cost to deliver your nonprofit's mission?