By Diane Freda, reporter, Daily Tax Report Bloomberg BNA |
Jan. 7 — The IRS has withdrawn proposed rules that would have allowed charities to directly report donors’ contributions to the agency, saying it won’t implement an exception to the current “contemporaneous written acknowledgement” (CWA) requirement for substantiating contributions of $250 or more.
The Internal Revenue Service had been flooded with comment letters opposing the proposal released in September (180 DTR G-7, 9/17/15).
In withdrawing the rules (REG-138344-13) Jan. 7, the IRS cited the substantial number of public comments it has received questioning the need for donee reporting, and especially, the collection and maintenance of Social Security numbers for use on a new information return.
By Anna Cielinski,Senior Policy Analyst, Center for Postsecondary and Economic Success |
As the New Year begins, states have an opportunity to set policies that will improve employment and training services for low-income adults through their Workforce Innovation and Opportunity Act (WIOA) State Plans. These plans are due to the Departments of Labor and Education on March 3, 2016.
According to the updated Information Collection Request (ICR) regarding WIOA State Unified and Combined Plans, state plans must describe strategies to prioritize employment and training services for “public assistance recipients, other low-income individuals, or individuals who are basic skills deficient.” CLASP applauds this clear call for robust implementation of the priority of service provision for high-need adults. This strengthened policy, for which CLASP has advocated, will help ensure that states serve low-income people.
By John D. Macomber, senior lecturer Harvard Business School, HBR |
Today’s mega-cities have a footprint problem. They are developing horizontally, not vertically, with vast areas of low sprawl reaching out for miles from Sao Paolo, Lagos, New Delhi, Guangzhou, Jakarta, and many others. A central question our civilization must address is how we can avoid becoming a planet of informal slums.
Every year, hundreds of millions of people across the globe move from rural to urban environments in search of opportunity. In a perfect world, governments would have the cash and the consensus to fund and coordinate the construction of the infrastructure required to sustainably accommodate a rapidly urbanizing world. But few governments appear to have the money or the political will to foot the up-front costs to prevent or fight fragmentation.
Recently, Tomer Barel, the chief risk officer at PayPal, share his five fraud predictions for 2016 with CNBC and talked about the evolving interplay of technology and fraud. Here are the highlights.
Social networks will help fraudsters get more sophisticated.
Major social networksare becoming more searchable, allowing fraudsters to learn more about their intended targets. This will lead to more successful social engineering attacks as targets will be led to believe they’re interacting with legitimate entities with whom they have an established relationship. Even the strongest network security is only as strong as its weakest link — which often is the employee. Now may be a good time to remind employees of these tips:
Do not provide data (confidential or not) and credentials via email, chat messenger or phone or in face-to-face conversations with unknown or suspicious persons or entities.
Avoid clicking on that link to an unknown site in an email. Take a closer look at the URL and the sender’s email address. They may be similar to but not exactly what you anticipate. Check for misspellings, @ signs and subdomains.
Beware of “baiting,” when an attacker tempts the user with a free or found USB or thumb drive, hoping someone will pick it up and plug it into their computer. Once you do, you’re hacked.
Shauna Woody-Coussenshas more than 20 years of experience providing dispute analysis, forensic investigations and valuation services to the business and legal communities. Her dispute analysis experience includes litigation consulting, trial, deposition and arbitration testimony and prelitigation financial analysis.
NFF’s 2015 State of the Nonprofit Sector Survey focuses on the underlying causes of these dynamics by exploring the programmatic, financial, and operational issues facing nonprofits across the U.S. It launched the Survey in 2008, when economic crisis threatened the viability of many organizations.
Seven years later, results from 5,451 respondents show some indications of recovery, stabilization, and growth. Nonprofits are adding jobs, engaging in strategic conversations such as leadership succession planning, and looking to retain their workforce. Yet as they raise their sights from the focus on short-term crisis, many are confronting the troubling reality that current practices cannot sustain organizations in the long-term or meet the needs of the communities they serve now. Many organizations have stumbled out of crisis looking to make the necessary investments to secure their long-term future. And it is a hard road ahead.
Key findings
Under-resourced communities are going without because nonprofits can’t meet demand. Americans — particularly those in low-income communities — are still struggling to secure jobs, affordable housing, and healthcare.
76 percent of nonprofits reported an increase in demand for services — the 7th year that a majority have reported increases.
52 percent couldn’t meet demand — the third year in a row that more than half of nonprofits couldn’t meet demand.
Of those who reported that they could not meet demand, 71 percent said that client needs go unmet when they can’t provide services.
The 2015 NFF Survey Analyzer at survey.nff.org allows you to investigate questions that cut across sub-sectors, budget size, geography and other dimensions.
By Bruce DeBoskey, The DeBoskey Group, for The Denver Post |
With record levels of giving, new approaches to marshaling philanthropic assets for impact, and better approaches to philanthropic strategy, 2015 was a great year for philanthropy. This trend will continue in 2016.
Increasingly, leaders in businesses, foundations and families understand that philanthropy is more than the merely transactional act of writing checks to favorite nonprofits. Today, philanthropy is seen as a strategic investment that is transformational for both society and the donor.
In the coming year, expect to see: The increasing impact of women
Women continue to demonstrate innovation and leadership in the field of philanthropy — and with big impact. Women now control more than half of the private wealth in the United States.
Looking forward, women are expected to inherit 70 percent of the $41 trillion in inter-generational wealth transfer that will take place over the next 40 years. By 2025, women will comprise 60 percent of U.S. billionaires.
Last winter was the third round of the INNovation Fund, a micro-grant program managed by the Investigative News Network to help with business experimentation in nonprofit and public-media newsrooms across the country.
Unlike for-profit organizations, nonprofit news organizations do not have equity to leverage when seeking capital for business investment. Furthermore, most grantmaking puts limitations on the amount of overhead allowed on any given grant.
Yet nonprofit newsrooms are expected to iterate and innovate to increase the amount of engagement with their target audiences, reduce their dependence on existing funders and diversify their revenue streams to become sustainable.
When auditors examine a nonprofit’s financial statements, they spend a lot of time on the revenue figures. They look at the accounting methods used to record revenues and perform a detailed income analysis to gain a true understanding of the organization’s revenue profile. All of this helps them get up to speed on the nonprofit’s financial health.
Whether or not you employ external auditors, you can use auditors’ techniques, including year-to-year trends and benchmarking to other nonprofits, to get a better understanding of your organization’s revenue. In particular, consider the following:
Individual contributions. To some degree, almost all nonprofits rely on contributions from supporters. Compare the dollars raised to past years and see if you can pinpoint any trends. For example, have individual contributions increased since the peak of the recession? What campaigns have you implemented during that period? Go beyond the totals and determine, for instance, if the number of major donors — say, those who give $1,000 or more a year — has been rising.
You get more bang for your fundraising buck when you’re able to add major donors to your roster of supporters. In most cases, it takes the same amount of time, effort and money for your organization to solicit a large donation as it does a smaller donation.
Also estimate what portions of contributions are restricted by the donor as to how or when they can be used. If your organization has a large percentage of its donations tied up in restricted funds, you might want to re-evaluate your gift acceptance policy or fundraising materials to make sure you’re pursuing contributions that give your organization the most flexibility.
Grants. Grants should include funding from corporate, foundation and government sources. They can vary dramatically in size and purpose, from grants that cover your operational costs, to monies for launching a program or payment for services to clients. For example, a state agency may pay you $500 for each low-income, unemployed individual who receives your organization’s job training.
Pay attention to trends here, too. For instance, did a particular funder supply 50 percent of your total revenue in 2013, 75 percent in 2014, and 80 percent last year? A growing reliance on a single funding source — an example of a “concentration” that will increase your risk — is a red flag to auditors and it should be to you, too. In this case, if this funding stopped, your organization might be forced to close its doors.
Fees for services. Fees from clients, nonprofits in a joint venture or other third parties can be similar to fees for-profit organizations earn. Fees are generally considered exchange transactions because the client receives a product or service of value in exchange for its payment. Some nonprofits charge fees on a sliding scale based on income or ability to pay. In other cases, fees (such as rent paid by low-income individuals) are subject to legal limitations set by government funding agencies.
On an ongoing basis, your nonprofit will need to assess if these services are paying for themselves. For example, fees set five years ago for a medical procedure may no longer be sufficient to cover costs. A decision to raise fees or discontinue the service will probably need to be made.
Membership dues. If your nonprofit is a membership organization, you likely charge membership dues. Has membership grown or declined in recent years, and how does this compare with similar groups? Make informed predictions about the future of membership dues, especially if you relied on for substantially for revenue. If you suspect that dues income will continue to decline, your organization might consider dropping dues altogether and restructuring. If so, examine other income sources for growth potential.
Apply what you’ve learned Once you’ve gained a deeper understanding of your revenue picture, you can apply that knowledge to various aspects of managing your organization. For example, you can implement additional controls where financial exposure is identified and educate your management team on how to make pricing decisions.
You also will likely acquire information that can help you set annual goals and prepare your budget. For example, if your organization is too dependent on a single government funder, make boosting individual contributions one of your nonprofit’s strategic objectives. Be sure to commit staff hours and dollars to achieving that goal.
You’re certain to find many other applications based on the information you’ve learned. Remember to look for concentration risks and upward and downward income trends.
Score with auditing techniques Auditors use income analysis methods, such as year-over-year trends and ratio analysis, to gain assurance that the revenue reported on your financial statements is accurate. You can use these tools to do so much more. Income analysis can reveal whether you rely on too few revenue sources or too many restricted donations, and enable you to compete more effectively with others in your field.
Reviewing the same information with an auditor’s eye won’t only help you pinpoint your nonprofit’s strengths and weaknesses, it will also enable you to initiate sensible changes.
Lori L. Robertson is a manager at VonLehman and has 29 years of accounting experience. She joined the firm in 2013, having been with Dunbar, Cook & Shepard, P.C. for seven years. She received her B.S. from Indiana University.
For more information on this topic or many other tax, accounting or business topics, contact your CPA, Business Advisor, or Lori Robertson, CPA, at lrobertson@vlcpa.com.
About VonLehman
Founded in 1946 and with offices in Kentucky, Ohio and Indiana, VonLehman is a leading full-service Certified Public Accounting, business advisory and business turnaround firm.
VonLehman provides forward-thinking accounting, tax, and strategic business advice to closely-held businesses, not-for-profits and governmental entities throughout the Kentucky, Ohio and Indiana region. See http://www.vlcpa.com for more information.
By Tove K. Danovich, founding editor, Food Politic |
As the Good Food Movement has grown over the last decade so too have the number of organizations dedicated to helping more sustainable food find its way to as many people as possible. Though many individuals have worked to raise awareness, numerous victories have been made from collections of people volunteering their time and donations to fund food projects they hope will make a difference.
Though I wish this could be a thoroughly scientific best-of list, there are simply too many great nonprofits around – national and local. (This is a great problem to have!) The purpose of this list is to share some great organizations that you might not have heard of. They appear in alphabetical order within categories.
In 2009, food activists planted the seed of change for hunger relief programs across the country. They said the national system, developed largely in the 1960s and consisted largely of soup kitchens and food pantries, needed to change its delivery systems and get food to people where they live and work.
That same year, Indianapolis-area hunger relief programs banded together as a volunteer coalition and formed the Indy Hunger Network (IHN). Its goal was to find ways to make the system more efficient and effective, while dramatically reducing hunger. One of its efforts was to connect the more than 200 small food pantries in the city run primarily by churches. Through IHN’s work, the number of meals provided in Marion County grew by 40 million.
Today, IHN is still volunteer-led and works to ensure that anyone who is hungry can access nutritious food. It has continued its work with representatives from leading anti-hunger organizations, both public and private, as well as community volunteers.
Its partners include: Connect2Help, CICOA, Department of Education, Elders at the Table (EAT), Elanco, FSSA (SNAP), Gleaners Food Bank, Interfaith Hunger Initiative, the Indianapolis mayor’s office, Meals on Wheels, Midwest Food Bank, Second Helpings, St. Vincent de Paul and WIC.
In 2014, the Indy Hunger Network did a study to better understand the city and its food distribution systems. The group knew that there were many meals being served, but focused its efforts on sustaining the system and improving access to nutrition. They also recognized that this collective effort was key to fighting food insecurity in Indianapolis, but together they could make systemic change.
According to Betsy Whitmore, communications manager from Second Helpings, this collective effort and multiple approaches are helping tackle the community’s hunger.
The network works together in other ways to ensure better use and learning from each other. For example, when a provider gets too much of a type of food, and it is able to redirect or share.
“We work with Gleaners and trade all the time. They’re like, ‘We got a whole bunch of this, can you use it?’ There are things that are canned goods, nonperishables, things that they need. When they show up with their truck, we switch. Some of our re-directed food goes to St. Vincent de Paul,” said Whitmore.
“What I find interesting is that the Indy Hunger Network is people who come at hunger from so many different directions,” said Whitmore. “If there were a silver bullet one way to feed people who were hungry, I think we’d as a society have found it by now. But it takes all of these people to make sure that food banks and food pantries are getting to people.”
And its work hasn’t gone unnoticed. In December, Jim Morris, an Indianapolis civic and business leader, was awarded the 2015 Daniels Prize for his lifetime efforts to push against the status quo to improve the lives of Hoosiers. Morris served as executive director of the United Nations World Food Programme from 2002 to 2007. As the recipient, Morris was able to select a $100,000 grant recipient.
Morris’ choice was the Indy Hunger Network to address the hunger issues involved in infant health.
