Daniel Dennis & Company LLP

CONGRATS to our supervisor, Sheenia McHayle, on passing all four parts of the CPA exam!!

For-profit companies pursue … profits. But how, besides the obvious, are nonprofits financially different from their business brethren? Your new staffers and board members may need a quick tutorial. Click here for a summary of the main differences: https://bit.ly/4eVVdt6

We are happy to welcome four new hires to the firm that started this month - Aishwarya Daware, Alexandra Clersaint, Michael Veliotis and Coleman Moynihan. Welcome!!

Please join us in congratulating Val Marcal, who was promoted to Manager! Congrats, Val!

Because pledges are promises to contribute later, not immediate contributions, accounting for them can be challenging. If a pledge is unconditional, meaning the donor has promised it with no reservations, your not-for-profit usually can recognize the revenue right away. If, on the other hand, a pledge is conditional and there’s some uncertainty about whether it will materialize, you may need to wait to recognize it. Another complication: Accounting for pledges’ future value can require accounting staffers to apply a “discount” rate when reporting them. Contact us for help with what can be a tricky process.

Your nonprofit’s monthly board meetings should ideally fall short of two hours. If they routinely run longer, they could undermine members’ confidence in leadership. Planning is essential. Once you’ve set a date, prepare an agenda with timetables and assignments. During the meeting, impose limits on discussions, and if members need to think about an issue, postpone decisions. Be sure to follow up after the meeting by finding answers to questions that arose and placing unfinished business on future agendas. Also, consider adopting a consent agenda, which consolidates routine items into one vote. Contact us for more information.

When it comes to investment income, nonprofits must comply with complex rules. For example, although much investment income, dividends, interest, rents and annuities aren’t subject to unrelated business income tax (UBIT), income from debt-financed property generally is. Income produced from such property usually is taxable in the same percentage as the debt is to the property’s full acquisition cost. However, some debt-financed property income isn’t typically taxable, such as property related to your exempt purpose, property used in certain activities and real property covered by the neighborhood land rule. Contact us for information.

Some nonprofit leaders mistakenly believe that board member independence is only about addressing conflicts of interest. But when evaluating board member independence, the IRS looks at factors such as whether the nonprofit compensated board members as employees or paid them more than $10,000 as independent contractors. It also considers whether the nonprofit has been involved in certain types of financial transactions with the board members or their close family members. To avoid conflicts and the appearance of poor governance, make sure a majority of your board members are independent. Contact us for details.

To reduce rent expenses, your not-for-profit might want to consider sharing a workspace. Options include teaming up with another nonprofit to share space, utilities, equipment and even staffers. Or you might join a commercial shared workspace that houses many types of organizations, including for-profit businesses. Some spaces offer back-office services such as HR and IT. Or a private foundation may have more space than it needs and be willing to rent part of it to you at a reduced rate. Of course, in some areas, office space is ample and you may be able to find a deal. Contact us to discuss the best course of action.