Charitable Donation Strategies for Nonprofits During COVID-19

The whole economy is reeling from COVID-19, but few industries have been as impacted by the novel coronavirus as the nonprofit sector. Social distancing restrictions have forced some charities to shut down their programs or operations. Others have experienced a major decrease in funding from both governmental and private sources as the nation navigates through challenging financial waters. In addition to all this, a recent Johns Hopkins University study found that ~1.6 million nonprofit jobs have been lost since March.

These obstacles all arrive at a time when the demand for help from vulnerable populations has skyrocketed. To continue aiding these groups,

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FASB Proposes Increased Transparency of In-Kind Donations to Not-for-Profits

On February 10, 2020, the Financial Accounting Standards Board (FASB) proposed a new accounting standard that would increase the transparency of certain types of in-kind donations to not-for-profit entities (NFPs). The proposal is in the form of an exposure draft that will be open for public comment through April 10, 2020. A full copy of the proposal may be obtained from the FASB’s website.

Why is the FASB Proposing Changes?

The FASB is proposing these changes to respond to ongoing concerns from stakeholders about the lack of transparency around the valuation of in-kind donations received by NFPs, and the impact those donations have on the reported expenses of not-for-profit entities.

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The Impact of Overseas Operations and Fundraising on the Form 990

Oftentimes, organizations that work across borders will come to Clark Nuber with their federal return, only to discover there are a lot more foreign operations reporting requirements than they anticipated. This article will cover the commonly overlooked areas, and we’ll note what questions you should be asking if you have international operations. A quick reference guide for navigating the Form 990 for foreign operations can be found at the end of the article.

Number of Employees

The first commonly misunderstood section concerns the number of people employed by your not-for-profit. On Page 1 of the Form 990, Line 5, the number of employees is highlighted for readers.

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Requirements for the Donor Receipt

Issuing a donor receipt seems like a simple task, especially in today’s technological era. Many online giving platforms used by charities issue a receipt automatically, taking the burden off the development staff and reducing a charity’s overhead costs. Around the beginning of each calendar year, charities receive numerous requests from donors for receipts to support a tax deduction on their personal income tax returns. It is crucial that these receipts issued by the charity include all the required elements. Failure to include the proper elements may cause a disallowed tax deduction for the donor.

Am I Required to Issue a Donor Receipt?

Usually the burden of obtaining a donor receipt falls on the donor.

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Update on Donor Disclosure Regulations – The Law and Practical Considerations

In July of 2018, the IRS issued Revenue Procedure 2018-38. This new procedure reduced donor disclosure requirements on all organizations exempt under Internal Revenue Code §501(a), other than §501(c)(3) charities; §501(c)(7), (8), and (10) organizations accepting gifts for charitable purposes; and §527 political action committees. Thus, for all other tax-exempt organizations, the contributors’ names and addresses on the Form 990, Schedule B, Schedule of Contributors may be redacted even when submitted to the IRS.

Although reportedly implemented to relieve burden, the relief was not universally well-received. Two states sued. Montana was the first to prevail winning in District Court (Bullock v.

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