Not-for-Profit

How valuable are volunteers? The quantifiable answer is $22.55 per hour.* But that number doesn’t account for the intangibles, such as enthusiasm, creativity, and dedication, that volunteers may bring to the table.

Tax-exempt organizations generally don’t have to pay any federal income tax. But an organization that has paid employees must collect payroll taxes and timely remit them to the IRS. As tempting as it may be to use those funds to relieve financial pressures, don’t do it.

When it comes to executive compensation and benefits, the public expects charities to be transparent and accountable. The idea that organizations that receive public support would provide executives with exorbitant compensation packages does not sit well. Appropriately documenting the process for determining executive compensation is crucial to satisfying public and regulatory concerns regarding excessive compensation. Here are some steps to help minimize risk and avoid the potential problems associated with awarding excessive executive compensation packages:

In February, the U.S. Bureau of Labor Statistics published data on volunteering in America.* According to the report, approximately one in four Americans (25.3%) volunteered between September 2013 and September 2014

Organizations that are tax exempt under IRS Section 501(c)(3) vary significantly in size and mission. But they all have one thing in common. All must comply with federal tax laws, including the requirement to make certain documents available to the public upon request. If someone makes a request and your organization fails to comply, an IRS audit and substantial penalties could result.

Public companies have been required to have an audit committee for about a decade now (due to the Sarbanes-Oxley Act of 2002), and many nonprofits have started their own such committees during that time. The result? Some organizations have learned the hard way that good intentions aren’t enough to ensure an effective audit committee — both the nonprofit and committee members must fully understand the committee’s role and responsibilities.

Nonprofit organizations typically depend on a variety of funding to keep them alive and well. They need funds to pay their bills, pay their staffs and pay for the costs of running their programs. But savvy nonprofits know that not all that’s green has equal value and flexibility. Types of funding vary greatly in how they can — or cannot — be used.

If your nonprofit became a victim of fraud, it wouldn’t just hurt your organization’s bottom line — the infraction also could do devastating damage to your reputation. By implementing some simple controls, though, your organization can help protect itself from these risks.

Like other nonprofits, your organization probably has searched for new sources of revenue during the recession and economic slump. Hopefully, though, you haven’t run into problems accumulating too much unrelated business income (UBI). That kind of income can subject your nonprofit to taxes — and even threaten your tax-exempt status. Here’s what to watch out for going forward on the UBI front.