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Non-Profit Governance and Compliance

Non-Profit Governance and Compliance. Things that can jeopardize your non-profit status . Private benefit/inurement Lobbying Political Activity Excessive unrelated business income. Should keep records in four categories. Money coming in Money going out Employment tax records

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Non-Profit Governance and Compliance

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  1. Non-ProfitGovernance and Compliance

  2. Things that can jeopardize your non-profit status Private benefit/inurement Lobbying Political Activity Excessive unrelated business income
  3. Should keep records in four categories Money coming in Money going out Employment tax records Asset records
  4. Filing requirements for Federal returns Gross receipts less than 50,000 can file a 990-N (which is an E-Postcard filed to the IRS) Gross receipts less than 200,000 and total assets less than 500,000 can file a 990-EZ or a 990 Gross receipts greater than 200,000 and total assets greater than 500,000 must file a 990 See the attached sample forms at the end of the packet. The highlighted areas of the Form 990 are the IRS’ hotspots. Calendar year end entities - Return is due May 15th. An extension is available if needed.
  5. Three types of audits Correspondence examinations Office examinations Field examinations
  6. Governance policies An organization should be prepared to adopt and enforce a series of basic governance policies and practices as a minimum for best practices Code of Ethics Conflict of Interest (see attached) Donor Gift/Acceptance Policy (see attached) Executive Compensation Expense Reimbursement (see attached) Joint Ventures (see attached) Political Activities (see attached) Record Retention/Destruction (see attached) Whistleblower (see attached) Grant Guidelines Transactions with Interested persons Investments Chapter Branches and Affiliates Fundraising Policies
  7. Guidestar www.guidestar.org Guidestar provides information about all non-profit organizations. Ability to update your profile with information about your organization
  8. IRS Hotspots Unrelated Business Income (UBI) – For example, you run a shelter, but create a new dog grooming service within the shelter. If you charge a fee for the grooming, that income is considered Unrelated Business Income. It is not the original intent of the organization and is “Unrelated” to the organizations mission. Excess Officer/Employee salaries (>$100,000) Excess contractor payments (>$100,000) Party in interest transactions Lack of Governance Policies
  9. Accounting 101 Shoebox of receipts vs. Financial Statement The more organized your material is, the less your accountant/CPA will charge you. Mandatory separation of personal funds and business funds Excel format vs. Software (QuickBooks, Peachtree, etc) Set up of computer software file is crucial. See attached example of Audited financial statements
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