In the development of our audit practice over the decades, particularly with a specialty focus on governments, our firm has also developed a significant practice area for Non-Profit Organizations.

The objectives of financial reporting for nonprofit organizations are to provide information to current and potential resource providers and others, so they may assess (a) the services a nonprofit organization provides and its ability to provide those services and (b) how management has discharged its stewardship responsibilities, as well as providing information about (c) the organization’s economic resources, obligations, and net resources and (d) the effects of transactions, events, and circumstances that change those resources (that is the organization’s performance or service efforts and accomplishments). More specifically, nonprofit financial reporting objectives are to:

• Communicate the methods resources have been used to meet the organization’s objectives and external requirements
• Identify an organization’s principal programs and their costs
• Disclose the degree of control over the use of resources exercised by donors and other funding sources
• Help the user evaluate the organization’s ability to carry out its fiscal objectives
• Provide relevant information needed by donors, members, creditors, and others who provide resources to not-for-profit organizations

Groups that are particularly interested in the financial information of a nonprofit organization include:
• Funding sources and contributors to the organization
• Regulatory agencies
• Governing boards (board of trustees or directors)
• Beneficiaries of the services rendered by the organization
• Employees
• Creditors and potential creditors
• Constituent organizations: for example, a local chapter of a national organization

These are only a handful of the many and varied responsibilities and financial matters that non-profits are tasked with managing through financial reporting, audits, and tax returns.

Navigating the Form 990

2008 saw the largest revision to the Form 990 since 1979.  The reporting climate has changed significantly for non-profits as IRS scrutiny as increased.  The Form 990, which was once an afterthought, is becoming an increasingly important document for exempt organizations. The IRS has become concerned with corporate governance, and organizations are required to report significantly more information about the composition and activities of their boards.  The IRS has also added additional schedules to the Form 990 covering certain types of transactions.  Some organizations may be required to modify how they capture their accounting data to comply with the new requirements.

Our staff has extensive expertise in this ever-changing area and the requirements for non-profits are at the forefront of our tax practice.  We have spent many hours researching the changes that will affect your organization, and our staff is attentive to what industry experts are hearing from the IRS regarding exempt organizations. Our staff has made presentations to several community groups outlining changes organizations may need to make and the additional information required. We can unravel the complexities of nonprofit reporting and allow you to focus on the goals of your organization and improving the community.

We can help your organization with all of its non-profit needs including audits, tax preparation, and management consulting.   Please contact us with any questions you may have or to arrange a meeting for a more in-depth discussion.