Tag Archives: gift planning

A New Creative (and Possibly Simple) Way for Fundraising

please give jarWe have all seen which way the winds are blowing. We are all witnesses to the aggressive rate at which social media permeates daily operations of virtually all nonprofits. For those nonprofits that hesitate to embrace online fundraising, it may be time to consider taking that first step. Online fundraising keeps growing at a bellicose rate and many nonprofits are finding that crowd-funding is a worthy means of using the Internet to raise much needed funds.

Crowd-funding sites such as Razoo, CauseVoxFundly, and Fundraise.com are specifically designed to support nonprofits by raising money. There are other crowd-funding websites that are not specific to nonprofits however have been used by charities to raise money including indiegogo, and Kickstarter. At the very core, these sites provide a means for nonprofits to design online fundraising campaigns based around a unique fundraising page. Nonprofits are then able to accept money directly through the webpage using the webpage host’s credit card processors.

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Does Permanently Restricted Mean ForEVER-Ever? L.A. Judge Thinks So

The Los Angeles Times is reporting that a Superior Court judge has blocked the sale of property given to UCLA under a 1964 agreement that stipulated the university would maintain the garden in perpetuity. In November 2011, UCLA put the property up for bid with a starting price of $9mil for the residence and $5.7mil for the Japanese garden on the property located in Bel-Air.

The university has been dealing with steep budget cuts and determined that the resources would be better directed towards their academic programs. Judge Lisa Hart Cole agreed with the donor’s heirs when they filed to block the sale and she noted that failing to notify the heirs of the university’s intent was “duplicitous”.

UCLA is considering its legal options and considers the judge’s ruling to be a “setback”.

Source: Los Angeles Times

Lack of Proper Appraisal Results in $18.5mil Charitable Deduction Denied

The Tax Court recently denied a taxpayer’s large charitable contribution deduction for donated real estate valued at $18.5 Million.  The Court denied the deduction because the taxpayer did not have the proper substantiation of the value under the tax code rules. The Court acknowledged the taxpayer did make the donation and also stated that the property’s value was probably greater than the amount the taxpayer was claiming.  (TC Memo 2012-152)

In order to take charitable deductions of more than $5,000 worth of noncash property, there are very strict substantiation rules that must be followed.  Among the rules is the requirement for the taxpayer to obtain a qualified appraisal for any noncash single item or grouping of items donated and valued by the taxpayer at over $5,000.

If you are a nonprofit 501(c)(3) receiving noncash donations, or a taxpayer who wishes to donate such items and take the charitable deduction applicable, we strongly advise you talk to your nonprofit tax specialist early in the process to make sure the taxpayer meets all the substantiation requirements so the desired tax deduction can be taken.

Giving Trends & Expectations Report

The Philanthropy Journal has released its special report on Corporate and Foundation Giving for 2011 which examines trends and expectations, along with providing information about what corporates, foundations, and nonprofits need from each other now.

After the economy collapsed in 2008, foundations and corporations seriously cut back on their funding of nonprofits. Many of the plans put in place after the fall-out have become an ongoing business strategy even after some bounces towards recovery. The fact that I’ve seen the word “austere” (defined as a rigorous economic approach of no luxuries or comfort) used more in the media over the last 24 hours than I have in years is just an indication of current attitudes.

So how to approach corporate and foundation grantors in this climate? The Philanthropy Journal’s study urges grantseekers to be clear, candid and work on building purposeful partnerships.

For more detail on their advice and the study findings, visit the Philanthropy Journal.

#giving #philanthropy #nonprofit #taxexempt #grantseeking

Restricted Revenue (avoiding management letter comments, part 2)

Recording restricted contributions can be a confusing topic, so it shows up often as a management letter comment.  Depending on the extent of the matter this could range from a significant deficiency to a material weakness. Below are some suggestions on how identify and record restricted contributions and avoid getting a management letter comment from your auditors.

First, what is a restricted contribution and what isn’t?

  • When a pledge is received and will be paid in future year(s), it is temporarily restricted for time. If it is for a specific program it may also be purpose restricted. These would be recognized as temporarily restricted revenue in the year pledged.
  • A contribution received in the current year that is intended for specific purposes is temporarily restricted. If it is for core or general operations, it is unrestricted.
  • Payments received relating to future memberships or conference revenue are not temporarily restricted as they are not contributions. These would be deferred revenue.
  • Payments received for contract services not yet rendered would be deferred revenue, not temporarily restricted.
  • Advances on exchange transactions when the expenses have not yet been incurred, are deferred revenues.

An important concept to note is that you can’t defer a receivable and vice versa. Deferring is a way of not recognizing the revenue yet. You defer things received but not yet earned. A receivable is revenue you’ve earned and rightly recognized, but not yet received. A temporary restriction is to identify funds received and recognized as revenue, but not yet expended in accordance with donor intent. It’s easy to forget all of that in the face of a confusing revenue event.

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