Tag: Nonprofit

A private foundation generally pays a 1.39% excise tax each year on net investment income when filing its annual Form 990-PF. Since this is not a large tax, most small private foundations don’t spend much time (if any) on tax planning.  While the excise tax rate on net investment income is not substantial, below are some tax planning tips your private foundation may want to utilize. Net Capital Loss – What you need to know On Form 990-PF, net capital… Read more ›

As the presidential election approaches, CBM would like to take this opportunity to go over the basic rules that govern 501(c)(3) organizations (“charitable organizations”) pertaining to political activities. To put it simply, the Internal Revenue Code absolutely prohibits all 501(c)(3) organizations from directly or indirectly participating in, or intervening in, any political campaign on behalf of (or in opposition to) any candidate for elective public office. Violating this prohibition could lead to the loss of tax-exempt status and the imposition… Read more ›

This article is part of an ongoing series published by CBM’s accounting and advisory group. Click here to learn more about how the group’s consultative approach to serving for- and not-for-profits can help grow your business. In today’s fast-paced and uncertain financial environment, financial risk management is a crucial discipline that can mean the difference between success and failure. Financial risks can come in various forms, from market fluctuations to unexpected crises. Organizations should always be well-prepared to identify and… Read more ›

The not-for-profit sector is extremely competitive and even a relatively small shift of fortunes can threaten an organization’s future. When events such as the death of a major donor or the loss of grants, organizations turn to their leaders to minimize the damage and restore stability. But all too often there is no plan in place to tackle risks. Astute not-for-profit leaders don’t wait for a storm. By making a risk analysis and confronting the possibilities ahead of time, they… Read more ›

  Does your not-for-profit need to replace a departing board director — or add directors to better handle your growing organization’s governance work? Choose carefully, because although a well-qualified, enthusiastic board addition can help infuse the group with energy and fresh ideas, an unqualified one can create conflict and other problems. Here’s how a nonprofit board should operate and how you can recruit effective board members. Governance and More The board has a duty to ensure the prudent management of… Read more ›

Councilor, Buchanan & Mitchell (CBM) to be a bronze sponsor of the 2022 Greater Washington Society of CPAs’ annual Nonprofit Symposium. The GWSCPA nonprofit symposium, to be held on December 13, 2022, brings… Read more ›

Unlike some fishing enthusiasts, not-for-profits don’t usually “throw back” contributions from the small fry in its donor base. Modest donations, after all, add up. But landing some big fish can make a whale of a difference to an organization’s financial security.Unfortunately, major donors don’t usually knock on a charity’s door and hand over millions of dollars. You have to work to find them and then earn their trust and confidence. Here are seven practical suggestions: Upsize your annual fund. Your… Read more ›

Organizations that are created to provide goods or services exclusively (or primarily) to Section 501(c)(3) organizations (or governmental entities) may think that this purpose is sufficient to also qualify them under tax law. However, providing commercial-type services exclusively to exempt organizations is not by itself an exempt purpose. Much more is required for qualification under the rules of Internal Revenue Code Section 501(c)(3) than just having a mission to assist charitable organizations. Basic Requirements An exemption under tax code Section… Read more ›

Revenue generated by 501(c)(3) organizations is generally exempt from federal income tax. But in some cases, your not-for-profit may incur unrelated business income tax (UBIT) on revenue. The good news is your annual tax return may offer some relief in the form of deductions. The list isn’t as long as the “ordinary and necessary business expenses” for-profit entities can deduct, but here are six common nonprofit deductions to know about: 1. Wages. Just as for-profit businesses, your nonprofit can deduct… Read more ›

Is your organization prepared for a crisis that could threaten its survival? It could be anything from a devastating economic downturn, to a domestic abuse or sexual harassment scandal involving a high-ranking official, to a natural disaster that destroys your main offices. Regardless of the nature and extent of the crisis, prompt action is required. First things first: Don’t panic. Second, this is the time for not-for-profit management, including the board of directors, to step up and provide leadership. The… Read more ›