Nonprofit Organizations Articles

Cost allocation procedures for nonprofit organizations are necessary to comply with GAAP standards and provide transparency to donors and funders. It outlines the need to analyze expenses by nature and function, categorize supporting activities, and disclose the methods used for expense allocation. Proper cost allocation ensures accurate financial reporting and helps nonprofits manage their resources effectively.

Charitable fundraisers featuring games of chance, such as bingo, raffles, baccarat, and roulette, are popular ways for nonprofits to raise money. However, hosting gambling events comes with certain tax-related responsibilities, including reporting participant winnings and ensuring compliance with IRS rules and state regulations. To remain compliant, nonprofits should plan accordingly.

A federated nonprofit organization is a network of independent entities that operate under a common mission and brand, allowing for both autonomy and collaboration. This structure offers benefits such as scalability, increased fundraising potential, and enhanced advocacy, making it an attractive option for nonprofits looking to expand their reach and impact.

Exit agreements are essential for nonprofit organizations to manage leadership transitions smoothly and fairly. These agreements, developed by the board of directors, outline the terms of a leader's departure, focusing on compensation and the ongoing relationship with the organization.

When starting a new 501(c)(3) nonprofit organization, you have two options for applying for tax-exempt status with the IRS: the traditional Form 1023 and the streamlined Form 1023-EZ. The traditional Form 1023 is more comprehensive and available to all organizations, but it is time-consuming and costly. In contrast, Form 1023-EZ is shorter, cheaper, and designed for smaller nonprofits, but it has strict eligibility requirements.

Balancing competition and collaboration is crucial in the nonprofit sector. Nonprofits often collaborate on events and campaigns, but they also compete for resources like donations and volunteers. Understanding when to compete and when to collaborate is essential, and the article offers strategies for managing both.

The election of Donald Trump and the Republican control of Congress are expected to bring significant changes to the not-for-profit sector. Key issues include potential legislation to revoke the tax-exempt status of organizations deemed to support terrorism, anticipated spending cuts affecting federal grants, and possible tax law changes that could impact charitable giving. Nonprofits should plan ahead to navigate these challenges and explore new funding opportunities.

To ensure your nonprofit’s special events are safe and successful, create a crisis management plan to address potential risks like bad weather, technology failures, and attendee needs. Review insurance policies and vendor contracts for adequate coverage and liabilities. Plan for travel delays by providing emergency contact information and maintaining a comprehensive contact list for all event participants. In case of a crisis, refer to your plan, communicate openly with attendees, and seek support from staff and board members. If your fundraiser falls short, explore ways to adjust for budget shortfalls.

Proper documentation is essential for deducting charitable donations on your taxes. Cash donations require bank records or written communication from the charity, while noncash donations have additional requirements based on the donation amount, including receipts, written acknowledgments, and qualified appraisals for larger donations. Ensuring compliance with these rules helps secure your deductions and avoid issues with the IRS.

Learn how to maintain strong internal controls to prevent fraud during peak seasons. Key measures include segregating accounting duties, supervising cash handling, and being vigilant about gift card security to protect your nonprofit’s revenues and holiday spirit.