Category: Not-for-Profits

Most not-for-profit executives are aware of the prohibition against private inurement. Generally, not-for-profit directors and executives — and their family members — aren’t allowed to personally benefit from their positions while putting their organization at a disadvantage. Penalties for violating the private inurement mandate could include financial sanctions for violators and, in the rare worst-case scenario, loss of the organization’s tax-exempt status. Usually, violations involve large organizations, yet smaller charities aren’t immune. But whether a not-for-profit is large or small,… Read more ›

Many not-for-profit directors serve on boards for altruistic reasons. But it can be a huge commitment and the issue of compensation often comes up. Compensating not-for-profit board members is rare. One survey suggested that just 2% of organizations pay their directors. Another study found that 96% of not-for-profit boards are voluntary. Survey results and anecdotal experience indicate that compensating directors is more common among private foundations, professional and trade associations and educational and cultural institutions. Note: This article deals only… Read more ›

Not-for-profits including trade and membership associations that charge for digital product sales should take note of the new sales and use tax on digital products passed by the Maryland General Assembly on March 14, 2021. The new law extends the existing 6% sales and use tax to digital goods. A tax tip published by the State of Maryland addresses the impact on not-for-profit organizations in this manner: There is no general exemption for all sales made by exempt organizations under… Read more ›

  Several months into the COVID-19 crisis, most not-for-profit organizations have formulated at least a temporary plan for sustaining operations. But short-term solutions should be complemented by long-term strategic planning that reprioritizes objectives. Specifically, your not-for-profit needs to focus on three areas: social impact, economic viability and capacity to deliver. Let’s take a look. Social Impact What social impact do you hope to achieve? Your answer to this question may have changed since the beginning of the pandemic. To respond… Read more ›

CBM’s Director of Not-for-Profit Services Dan Weaver, Senior Vice President Judy Barnhard, and Senior Advisor Tony Cuozzo are scheduled to present at the 2020 Greater Washington Society of CPAs’ (GWSCPA) Nonprofit Symposium from Monday, December 14 through Wednesday, December 16. The Symposium is an annual two-day event that delivers networking and professional education opportunities for hundreds of financial professionals in the not-for-profit sector throughout the Washington, DC metropolitan region. Due to COVID-19, this year’s Symposium will be held virtually. Mr…. Read more ›

During these financially challenging times, many not-for-profit organizations have had to get creative to raise adequate revenue to sustain operations. But new activities, however well-intentioned, can lead to tax trouble. Your nonprofit risks exposure to the unrelated business income tax (UBIT) if it operates outside its usual charitable scope. Here’s how to avoid unwanted tax exposure. Regular and Unrelated For tax-exempt organizations, unrelated business income generally is defined as the profits generated by regular trade or business activities that aren’t… Read more ›

In response to increasing public pressure, the Small Business Administration announced on June 19 that it would release the names of Paycheck Protection Program (PPP) loan recipients awarded at least $150,000 in funds. No timeline for the disclosure has been announced, but the SBA said it would “disclose the business names, addresses, NAICS codes, zip codes, business type, demographic data, not-for-profit information, jobs supported, and loan amount ranges as follows:” $150,000-$350,000 $350,000-$1 million $1-2 million $2-5 million $5-10 million Participants… Read more ›

Since passage of the Paycheck Protection Program Flexibility Act of 2020 on June 5, 2020, the Small Business Administration has continued to bring current and prospective borrowers up to speed through a series of interim rules for the program, as well as the release of a revised loan forgiveness application, a revised loan borrower application, and a new EZ form of the loan forgiveness application. Updated PPP Loan Forgiveness Application (and a new EZ Version) On June 17, the Small… Read more ›

The U.S. Senate has passed the bipartisan Paycheck Protection Program Flexibility Act of 2020, which loosens several of the Paycheck Protection Program’s (PPP’s) more onerous restrictions regarding loan forgiveness. President Trump has signed the bill into law. The new law follows the May 22, 2020, release of an interim final rule from the U.S. Department of Treasury and the Small Business Administration (SBA) on PPP loan forgiveness requirements. Among other areas, that guidance addresses the calculation of full-time employees and… Read more ›

Last week, the Small Business Administration clarified which businesses can expect to be audited once they certify in good faith that they received Paycheck Protection Program loans based on economic need. The SBA also delivered requirements for Maryland employers whose furloughed workers refuse to accept a recall to work. Read more below. Good Faith Certification and the Safe Harbor Deadline Extension The goal of the Paycheck Protection Program since it was established in late March under the CARES Act has… Read more ›