Anyone have any experience with Nonprofit Acctg?

[Hamacher]

As a means of trying to give back to the community... I have agreed to help a couple local nonprofit organizations with their accounting. I have prepared 990s in the past but have never been involved with the accounting side of things. These are SMALL organizations that do not even have a current filing requirement. A couple questions... do they depreciate assets any diffrently that profit entities? How are donated assets treated? What is the best way to treat the assets that were donated years ago? The organization is made up of all volunteers. They provide services for the local cummunity in return for donations. Are they suppose to be providing the donor with a receipt for their contribution? What would be the value (i.e. contribution vs value of services received... if so, how would the value be determined)? Are there any rules in regards to what expenses are allowed? Currently the volunteers have to buy their own shirts with the organizations name, etc. on them. Can the organization pay for these for them? If the volunteers buy the shirts, can they receive a charitable contribution deduction? BTW - this is a 501(c)(3) organization. Any other advise would be appreciated.

Thanks in advance.

[Gretel]

A lot of good questions. It's a good post for after 4/15. but maybe then a bunch of people are gone from the board.

Hope, you get some responses.

[Dervis]

NP accounting

A couple questions... do they depreciate assets any diffrently than profit entities? How are donated assets treated? What is the best way to treat the assets that were donated years ago? The organization is made up of all volunteers. They provide services for the local cummunity in return for donations. Are they suppose to be providing the donor with a receipt for their contribution? What would be the value (i.e. contribution vs value of services received... if so, how would the value be determined)? Are there any rules in regards to what expenses are allowed? Currently the volunteers have to buy their own shirts with the organizations name, etc. on them. Can the organization pay for these for them? If the volunteers buy the shirts, can they receive a charitable contribution deduction? BTW - this is a 501(c)(3) organization. Any other advise would be appreciated.

Thanks in advance.

That's a lot of questions. I'll try to answer as many as I can.

As I recall from my n-p accounting class, non-profits are not required to depreciate assets, but you can if you want to get a more accurate picture of finances. If you do depreciate, use the same method you would use for a for-profit. Donated assets are booked at FMV at the time of donation. Organizations can give receipts to donors, but it is up to the donor to value the donation, which may not be the same as what the org books. The only exception that comes to mind is donated vehicles, in which case a 1099-? must be issued if the car is sold. Donated services are not deductible for donors, so no receipt for these. I would keep a separate spreadsheet for in-kind donations, as some granting organizations like to see these and there is a place on the 990 (but not the 990EZ) to report these. Expenses usually are the same for for-profits, i.e. ordinary and customary. So it would probably be OK to buy shirts for the volunteers as a way of advertising the organization. If they bought them on their own, they wouldn't get a tax deduction because they are receiving something for their "donation" that is equal to the value of their contribution, therefore no deduction.

The only other special situations involve gifts designated for special purposes. You need to set up a special spreadsheet to track expenses related to those funds separately so you can show you spent the money for the designated purpose.

[RLymanC]

Go to Amazon.com and search for Murray Dropkin, scroll down till yoiu find "Bookkeeping for NonProfits. It's should be a big help to you.

[Davc]

Actually, a Not For Profit should issue an acknowledgment of services provided for volunteers who are likely to have spent over $250 out of pocket.

[ecb34691]

Actually nonprofits must depreciate property, but they can't take sect 179. If you look at a 990 there is a line for deprection and you must attached a detail listing including accumulated depreciation. Been through an audit with a 501 c4 and got "digned" until they furnished a detail depreciation list.

[Lion]

Sleeter Group

If your nonprofit uses QuickBooks, the Sleeter Group has a good book re nonprofits and QB and seminars and e-newsletters and...

[CarolToppCPA]

Agree with Dervis answer

Hamacher,
Good for you!

I've worked with several small NPOs and I agree with Dervis' answers.
Just to chime in:
Depreciation suggested. I was treasurer for an small NPO that depreciated any item costing them more than $500, under $500 was expensed. This was on the advice of their auditor and I thought it was reasonable. My church depreciated assets and then put the money in a saving account to be a replacement fund for the equipment. Smart idea I thought.
Donor receipts: Yes, the charity should give receipts with the value of the gift and amount of goods or services given in exchange.
Donation of services are not deductible, so don't give the donor a receipt for donation of services. We'd get entertainers that would say, "I'll perform for no charge, just give me a donation receipt for the $500 I would have charged you".. Nothing doing. Their donation had to be cash or goods to get a donation receipt.
Shirts: The NPO should be buying them. If not, the volunteers could deduct them as out-of-pocket expenses of doing charity work which is allowed as a charitable donation. I had out of pocket expenses in purchaseing books and a newsletter to help me be a better volunteer church treasurer. I added it to my total cash donations and deducted it on Sch A.

The Dropkin Bookeeping for NPOs is good. I have it on my shelf. Also www.realitycheckonline.com, a QB training firm has free downloadable books on using QBooks in a NPO. Very good and easy to read (and FREE!)

http://www.realitycheckonline.com/freemanuals.html

HTH,
Carol