Anders Virtual Not-for-Profit Symposium 2020

Welcome to our 4th annual Not-for-Profit Symposium!

Insights for Associations

Associations are facing a multitude of unique challenges and opportunities, from cash flow concerns to building and retaining members. Below are resources and insights from our advisors to help you navigate the new normal and beyond.

Keep Cash Flowing by Increasing Membership in Associations

The middle of a pandemic might seem like an unlikely time to embrace the recruitment and retention of association members. However, this should be one of your highest priorities and a way to manage your budget and keep your association financially sound in 2020.

COVID-19 has had adverse impacts on almost every association, so now is the time to re-visit your strategic plan. To advance your organization in a virtual environment, you will need to make appropriate changes and then analyze and align your budget with those changes.  At the very top of your list should be membership.

Check out 6 ways to boost recruitment and retention of members.

 

Donna Erbs
Donna M. Erbs
Chief Marketing Officer

What Associations Need to Know About Sales and Use Tax

When it comes to not-for-profit organizations, each state may treat them differently from a tax perspective. Some not-for-profit organizations may be nontaxable on their purchases and taxable for their sales, or vice versa. Some states will tax both sales and purchases or treat both as nontaxable. It’s important to know that being exempt from federal income tax does not always translate to being exempt from sales tax. There are many factors that come into play when a not-for-profit organization is paying or collecting sales tax.

What is Sales and Use Tax and What Determines if I Owe?

Sales tax is a tax on the retail sale of tangible personable property and enumerated taxable services. For not-for-profit entities, where they are located, their main activities or functions, and type of entity can determine whether they pay or collect sales tax.

Find out what is subject to sales and use tax in Missouri and Illinois.

 

Robert v. Willeford | State and Local Tax
Robert V. Willeford, Jr., CPA, Esq.
Director + State and Local Tax

How Associations Can Build an Online Community to Retain Members

Now more than ever associations need to find a way to connect with their members. Peer support is an exclusive need that only your association can deliver for your professional or industry-based community. As we continue to wade through the effects of COVID-19, online community is one of the best ways to engage your membership.

3 Ways to Stay Connected

In today’s content-saturated environment, associations need to offer members online resources and designated spaces for dialogue. Some leverage tools such as LinkedIn or Facebook, and others host their own platform to bring members together. How can your association build the community it needs to retain members?

Find out three ways to create a space for real relationships.

 


Destinee E. Penigar
Marketing Coordinator

How Labor Unions Can Benefit from the CARES Act

The CARES Act enabled various relief programs for business and exempt entities. While some of the provisions for not-for-profits were limited to 501(c)(3) charitable organizations, there are several provisions labor unions can take advantage of.

Paycheck Protection Program (PPP) Loans

Unfortunately, the union itself will not be eligible to apply as the program is limited small businesses and to 501(c)(3) charitable organizations. For most unions, PPP loan funds will only be available for payroll dollars in a 501(c)(3) training fund. These loans are administered by banks and have forgiveness features if the loan is spent on qualified expenses.

Read more benefits available for labor unions.

 


Jeanne M. Dee, CPA/CGMA
Partner + Audit and Assurance

Insights for Charitable Organizations and Foundations

Charitable organizations and foundations have been impacted greatly this year. Below are resources and insights from our advisors to answer your questions about the CARES Act, sales and use tax treatment and more to help you navigate the new normal and beyond.

In-Kind Donations: How Not-for-Profits Should Treat Non-Cash Contributions

Not-for-profit organizations love cash contributions, but donors may also want to contribute a variety of non-cash items including food, clothing, supplies, long-lived assets and items used for fund-raising purposes, services, utilities or the use facilities and much more. How does a not-for-profit handle all of these items?

Implementing a Gift Acceptance Policy

Organizations should consider implementing or updating their gift acceptance policy. The National Council on Nonprofits has wonderful resources and sample policies to help you get started. This will prevent you from being stuck with a well-intentioned, but costly-to-maintain and hard-to-sell gift, such as a track of land in another state.

Learn how to treat non-cash contributions.

 


Jeanne M. Dee, CPA/CGMA
Partner + Audit and Assurance

How the CARES Act Encourages Charitable Giving in 2020

To encourage more charitable giving in 2020 and to help charitable organizations recover from the pandemic, the CARES Act provides additional tax relief for donors on their 2020 tax return. Below we explain the new above the line deduction and eliminated contribution limit for charitable giving.

Above the Line Tax Deduction for Charitable Contributions

As a result of the Tax Cuts and Jobs Act of 2017 (TCJA), fewer taxpayers were able to itemize and receive a tax benefit from their charitable contributions because of the increased standard deduction. In turn, some donors lowered the amount of their contributions. The CARES Act re-incentivizes charitable giving by creating a $300 above the line deduction for qualified charitable contributions. This deduction is available to all taxpayers that take the standard deduction on their 2020 return.

Find out what qualifies for this deduction.

 

Nick Dall | Tax Associate
Nicholas E. Dall
Associate + Tax

What Not-for-Profits Need to Know About Sales and Use Tax

When it comes to not-for-profit organizations, each state may treat them differently from a tax perspective. Some not-for-profit organizations may be nontaxable on their purchases and taxable for their sales, or vice versa. Some states will tax both sales and purchases or treat both as nontaxable. It’s important to know that being exempt from federal income tax does not always translate to being exempt from sales tax. There are many factors that come into play when a not-for-profit organization is paying or collecting sales tax.

What is Sales and Use Tax and What Determines if I Owe?

Sales tax is a tax on the retail sale of tangible personable property and enumerated taxable services. For not-for-profit entities, where they are located, their main activities or functions, and type of entity can determine whether they pay or collect sales tax.

Find out what is subject to sales and use tax in Missouri and Illinois.

 

Robert v. Willeford | State and Local Tax
Robert V. Willeford, Jr., CPA, Esq.
Director + State and Local Tax

How Labor Unions Can Benefit from the CARES Act

The CARES Act enabled various relief programs for business and exempt entities. While some of the provisions for not-for-profits were limited to 501(c)(3) charitable organizations, there are several provisions labor unions can take advantage of.

Paycheck Protection Program (PPP) Loans

Unfortunately, the union itself will not be eligible to apply as the program is limited small businesses and to 501(c)(3) charitable organizations. For most unions, PPP loan funds will only be available for payroll dollars in a 501(c)(3) training fund. These loans are administered by banks and have forgiveness features if the loan is spent on qualified expenses.

Read more benefits available for labor unions.

 


Jeanne M. Dee, CPA/CGMA
Partner + Audit and Assurance

General Insights for
Not-for-Profits

From managing cash flow to understanding the new revenue recognition treatment and PPP loan forgiveness, Anders is here to help not-for-profits face a multitude of unique challenges and opportunities. Below are resources and insights from our advisors to help you navigate the new normal and beyond.

Uniform Guidance Updates For Organizations With Federal Grants

Organizations that receive greater than $750,000 of federal grants are usually subject to additional audit requirements, commonly referred to as a single audit, or Uniform Guidance audit. The federal government’s response to the COVID-19 pandemic has created some new programs and relief packages for non-governmental agencies, and some may now be subject to the single audit requirement. Here are some guidelines and updates for Organizations that receive federal grants:

  • Paycheck Protection Program (PPP) Forgivable Loans administered by the US Small Business Administration do NOT count toward the $750,000 threshold and are NOT subject to the single audit rules.
  • Provider Relief Funds (CFDA 93.498) administered by the US Department of Health and Senior Services are subject to the single audit rules.
  • Economic Injury Disaster Loans (EIDL) administered by the US Small Business Administration are subject to the single audit rules.

Read more details of the single audit rules.

 


Thomas S. Helm, Jr., CPA, MBA
Principal + Audit and Assurance

How the New Revenue Recognition Treatment Will Affect Not-for-Profits

The way most organizations recognize revenue under U.S. Generally Accepted Accounting Principles (GAAP) was set to change this year due to a Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) 2014-09. Below we dive into what this means for not-for-profits going forward.

What does this mean for my organization?

For traditional, charitable type not-for-profits, the good news is that pure donations and contributions are considered voluntary and nonreciprocal, or “non-exchange”, and these types of revenues do not fall under the new standard. The standard also provides for some exemptions beyond typical donations. For example, lease and insurance contracts as well as investment income are excluded from the scope of the standard.

Learn what is subject to the new standard.

 


Jeanne M. Dee, CPA/CGMA
Partner + Audit and Assurance

PPP Loan FAQ: What Not-for-Profits Need to Know About Forgiveness Timing and Tax Planning

With the end of the year looming closer, many organizations are focused on ensuring they receive forgiveness for their Paycheck Protection Program (PPP) loan. Businesses and not-for-profits are wondering if and when they should apply for loan forgiveness, and what changes are coming from Congress, the SBA and banks. Below we answer common questions around PPP loan forgiveness timing, year-end tax planning and talks of another stimulus package.

Q: Should I submit my application now? Why or why not?

A: Anders is advising clients to wait until further guidance is released by the SBA and IRS. We do not see any benefits to applying early, and we see more changes as Congress gets closer to passing another stimulus package.

Find answers to more PPP questions, including the idea of automatic forgiveness.

 

Paul Rhea | Banking Advisory St. Louis
Paul C. Rhea
Director + Strategic Growth

4 Ways Not-for-Profits Can Be Flexible and Cost-Effective Using Technology 

If your not-for-profit is looking for ways to empower staff and continue with your mission during this time, but are concerned about spending, you’re not alone. New technology can and should be accessible, flexible and cost-effective to implement and managing going forward. With these goals in mind, below are five ways not-for-profit organizations can implement new technology to help move their mission forward while staying on budget.

1. Stay Productive in the Cloud

By moving to the cloud, not-for-profit organizations can stay on top of the latest tools, applications, and innovations. In the past, expensive server hardware was required to be purchased every 3-5 years, or longer depending on budgets. Organizations can now move to the cloud with little to no licensing costs. Companies such as Microsoft offer free or heavily discounted licenses for not-for-profits to move to the cloud. Microsoft ® Azure and Office 365 allow employees to work from anywhere in a secure network.

See how your organization can collaborate and connect in one place.

 

Julia Deien
Julia A. Deien, MCTS
Solutions Architect + Technology

GAAP Financial Reporting Considerations Related to COVID-19

There’s no doubt that not-for-profits have been thrown into a “new normal”. For the past few months, board members and executive directors have worked to understand the aspects of the CARES Act and PPP loan forgiveness while trying to rework budgets, cash flow projections and other important forecasts to help weather this crisis. In conjunction with the financial work being done, there are several important accounting and reporting rules under Generally Accepted Accounting Principles (GAAP) that should be considered.

Subsequent Events

GAAP often requires disclosure of events or circumstances occurring after the balance sheet date, but before the financial statements are issued. Events that provide evidence about conditions that did not exist at the balance sheet date but arose subsequent to that date are called “Type 2” events. For many organizations in the US with a December 31 year end, the COVID-19 crisis was considered a Type 2 event. Generally, Type 2 events are not recognized in the financial statements but are disclosed in the footnotes to keep the financial statements from being misleading.

Read more about GAAP affects on not-for-profits.

 


Jeanne M. Dee, CPA/CGMA
Partner + Audit and Assurance

Internal Controls for Not-for-Profits in the New Normal

As stay-at-home orders and social distancing have shifted the workforce in many ways, not-for-profits are left with many changes to their accounting and financial reporting environments. Many of these changes were expected, but some changes may have unintended consequences. Pre-pandemic policies were designed to set up effective and efficient controls. However, the controls that were designed may not be effective, or even applicable in the current environment. These changes present the perfect opportunity for management to reevaluate their control environment, begin assessing and updating the risks that lie within that environment, and redesign their policies and procedures.

How to Assess Your Internal Controls

The first and most important step in the process will be assessing where risk lies within the accounting and financial reporting systems. Management should consider where and how fraud or misstatements could occur. Once management knows where the potential risks are, management can insert the needed controls to deter and reduce those risks.

Learn how to segregate duties and strengthen the review process.

 

Brian Loose | Anders CPA
Brian C. Loose, CPA
Manager + Audit and Assurance

How Not-for-Profits Can Manage Cash Flow in a Crisis

Not-for-profits have to walk a delicate line even in the best financial situation. Now with more financial strain on organizations as a result of COVID-19, executive directors, boards and leadership teams need to not only focus on income streams and reducing costs, but they need to concentrate on the balance sheet to optimize cash and maintain liquidity. It’s imperative to keep an eye on your cash flow, regularly monitor your cash position and develop some survival strategies to get you through the crisis.

Developing a Cash Flow Management Strategy

Instituting an effective cash flow management strategy may be the most important action you can take to navigate through these challenging times.

Read our useful tips to control cash.

 

Scott Hoffmann | Outsourced Accounting
Scott A. Hoffmann, CPA
Partner and Director + Outsourced Accounting

Using Form 990 to Market Your Not-for-Profit

While tax-exempt not-for-profit organizations don’t typically have federal tax liability, most are still responsible for filing an annual information return with the IRS. The IRS Form 990 is a public document that includes information about the organization’s mission, programs and financials. Not-for-profits can and should make their 990 work as a marketing tool to appeal to donors, grant makers and volunteers.

Why Your 990 Matters Beyond Taxes

Form 990 is publicly disclosed, so anyone can see it. You can use it as a marketing tool to educate readers about your cause and enhance your fundraising efforts. Many potential donors and volunteers will look at the 990 and use it to help decide whether to support an organization.

Find out who looks at a 990 and how to convey your message. 

 

Tracy Hutter
Tracy M. Hutter, CPA
Supervisor + Tax

Investing During COVID-19

Over the years, myself and many of my evidence-based investing colleagues have noticed interesting reactions from newer not-for-profit clients during times of market distress. Frequently, we will be asked something along the lines of, “yeah, I know that’s what you’re telling everybody, but really, what should WE be doing right now?” The implication, of course, is that those with a very large pool of assets can get access to little known investments or insights that have the ability to avoid market downturns while somehow still participating in the upswings. There is, nor has there ever been, a shred of evidence that these investments or insights exist. Fortunately, mountains of academic evidence give us a playbook detailing what the finance committees of not-for-profits should do in times of distress. And here’s a little spoiler: those with massive portfolios should be doing roughly the same thing as those with not-so-massive portfolios.

Find out what not-for-profits should be doing.

 

Scott Iverson, CFP®, ChFC, CEBS, CRPS
Member and Wealth Advisor at Claris Advisors, an affiliate company of Anders CPAs + Advisors.

Founded in 1998, Claris Advisors is an investment advisor committed to helping individuals, institutions and retirement plan sponsors become smarter investors.

How Anders Can Help

COVID-19 Recovery

From navigating the Paycheck Protection Program (PPP) loan process to proactive cash flow planning, our advisors can help you get back to focusing on the mission.

Learn More

Technology

From taking on those IT projects your staff doesn’t have time for to fully managing your technology, you’ll know your company is in good hands with Anders Technology.

Learn More

Outsourced Accounting

Using advanced cloud-based systems, Anders can automate your accounting functions in a seamless, scalable process that is accessible online in real-time.

Learn More

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