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Welcome!
Ever
wonder
if
your
organiza'on
is
scally
safe
and
nancially
healthy?
Do
you
fully
understand
your
organiza'ons
policies
regarding
nancial
management?
Are
you
aware
of
Non-Prot
start
up/on-going
regula'ons
and
repor'ng
requirements?
Is
your
organiza'on
a
bona
de
501(c)3?
Financial Management
Major responsibility of the Board and
Treasurer.
Have basic skills in critical areas of
developing & maintaining budgets,
bookkeeping, financial controls, cash
management and creating finance statement
reports.
Utilize a Finance committee to assist in
reviewing income, expenditures and budget.
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Bookkeeping
Recording various financial transactions
including keeping track of income and
expenditures.
Can be prepared by someone who's doing
basic clerical work in the organization. The
board treasurer can help by developing and
carrying out the bookkeeping system.
Chart of Accounts
Budgets
An operating budget (or annual budget) shows
planned revenue and expenses, usually for the
coming year.
Board is responsible to authorize the yearly
budgets.
Every organizations budget will have different
needs and wants. Plan conservatively.
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Financial Statements
Statement of Activities
(Income Statement)
A nonprofits statement of
activities is issued instead of the
income statement which is issued
by a for-profit business.
The statement of activities
focuses on the total organization
(as opposed to focusing on funds
within the organization) and
reports the following:
1. Revenues such as
contributions, program fees,
membership dues, grants,
investment income, and amounts
released from restrictions.
2. Expenses reported in
categories such as major
programs, fundraising, and
management and general.
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Advantages
Eligible for Income Tax Exemption and Tax
Deductible Donations
Corporate Agents Generally Not Liable
Disadvantages
Administrative Burden
Limitations on Permitted Activities
Can be Costly to Form
16
$ 10
(vary states)
$ 30
$ 850
$ 25
$ 20
$ 25
Total
$ 960
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Articles of
Incorporation
!
What are the Articles of Incorporation?
"The corporations basic organizational document
the Articles create the corporation.
Filling starts the clock running on tax deadlines.
!
What must the articles include?
1) the corporate name;
2) a statement that the corporation is established for public or
charitable purposes (or both);
3) The name and address of the initial agent for service of service;
4) A provision dedicating the corporate assets to charitable purposes and
restricting the corporation from political campaigning or lobbying.
Helpful Reminders
!
When you file articles to form the corporation, you will start the
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By-Laws
!The
of Directors
"Time, Place, and Manner of Director
Meetings
"Voting Procedures
"Director and Officer Duties
"Committee Structure
"Amendment Procedures
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Managing
Taxes
Know Key Steps to Apply for Tax-Exempt
Status
What do you need to know about filing federal
tax forms (990-N, 990-EZ or 990)
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"Form 990
Nonprofit organizations
withatleast$200,000 in annual gross
receipts or at least $500,000 in total
assets are required to file Form 990
with the IRS.
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"Form 990-EZ
Organizations that have gross
receipts
between $50,000 and
$199,999
and
total assets of less than $500,000 at
the
end of
the
yearmusteitherfileForm
990-EZ orfile
the full Form 990.
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General Resources
www.guidestar.org
Provides
nancial
data
and
basic
informa'on
on
every
IRS
registered
non-prot
organiza'on
(NPO).
Not
a
charity
watchdog
or
evaluator.
Easy
to
use
and
anyone
can
join
for
free.
Addi'onal
data
can
be
purchased
if
necessary.
If
an
NPO
is
not
listed
here,
most
likely
the
organiza'on
is
not
considered
a
bona
de
501(c)3
organiza'on
or
is
no
longer
recognized
by
the
IRS.
hGp://www.irs.gov/Chari'es-&-Non-Prots/Charitable-Organiza'ons/
Exemp'on-Requirements-Sec'on-501(c)(3)-Organiza'ons
Go
To
website
for
seing
up
a
non-prot
organiza'on,
links
for
applica'on
forms,
trainings,
etc.
32
hGp://www.stayexempt.irs.gov/
This
website
will
help
your
NPO
u'lize
its
tax
exemp'on
status
appropriately.
hGp://www.stayexempt.irs.gov/Exis'ng-Organiza'ons
Many
NPOs
fail
to
follow
IRS
guidelines
set
for
maintaining
their
tax
exempt
status
and
as
a
result
lose
their
right
to
claim
tax
exemp'on.
This
page
has
helpful
'ps
to
be
aware
of
with
regard
to
important
compliance
informa'on.
hGp://www.stayexempt.irs.gov/Star'ng-Out
Helpful
informa'on
for
new
NPOs
needing
assistance
with
following
IRS
guidelines
to
qualify
and
maintain
their
new
tax
exemp'on
requirements
hGp://www.stayexempt.irs.gov/Resource-Library
Chock
full
of
informa'on,
including
a
glossary
of
terms
in
learning
more
about
NPO
tax
exempt
rules.
33
hGps://www.councilofnonprots.org/tools-resources/nancial-
literacy-nonprot-boards
Financial
Management
Self-Assessment
Tool
may
be
helpful
for
NPOs
looking
to
strengthen
internal
controls.
Smaller
grassroots
organiza'ons
or
state
associa'ons
will
not
need
to
cover
every
area
listed
in
this
document.
hGp://www.npccny.org/Form_990/990.htm
If
your
organiza'on
les
a
yearly
IRS
990
form,
this
document
will
help
explain
some
of
the
important
details
that
board
members
and
related
par'es
should
be
aware
of.
Too
omen
board
members
are
unaware
of
what
kind
of
informa'on
is
contained
within
the
990
form.
Small
organiza'ons
with
less
funds
are
not
required
to
complete
the
full
990.
There
are
several
versions
for
these
organiza'ons
to
u'lize.
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