Most exempt organizations undertake fundraising sales and events, but GAAP reporting of the underlying transactions and results is at odds with what the Form 990 demands! Preparers need know both how these activities are defined and the extent to which their underlying components need be isolated and disclosed to meet the form's financial reporting parts (including Schedules G and A). Most filers report incorrect data related to these revenue items, failing to detail the full array of components of such sales' revenue streams, direct expenses, and separate associated solicitation expenses.
Public accounting tax and audit staff, and nonprofit organization's Treasurers, CFOs and finance/compliance staff
After attending this presentation you will be able to...
- Recognize the correct tax reporting of fundraising revenue related to sales or special events by both their separate character and timeframe tests
- Distinguish between donations for fundraising events or sales (for example, silent auction items, prizes to be awarded at the event, or goods that will be sold) and donations from event participants
- Appreciate and be able to apply the unyielding 990 definition of "noncash contribution"
- Identify when disbursement of pre-fundraising or pre-sales goods and other noncash contributions constitute a direct expense of such events or sales
- Determine what qualifies as fundraising events/sales direct expenses for Form 990 Part VIII Line 8 disclosure versus a solicitation expense that is to be reported upon Part IX
The major topics that will be covered in this class include:
- Definition of "fundraising events and sales" and distinguishing operations that are outside of such characterization
- Address of what constitutes a true gift or contribution when same is paid on top of a purchase of services or goods
- Specifics of Form 990 inputs to be made on Part VIII Lines 1c and 8a (and Schedule G's counterpart) and noting insufficiency of GAAP reporting
- Inputting data in order to bifurcate an event's participant or purchaser's payment to "gift/contribution" versus fundraising event or sale revenue streams
- What constitutes a "solicitation" expense that need be reported on Part IX, and thus cannot be characterized as a direct expense of a fundraising event or sale
- Practical tips for handling revenues from silent auctions and guidance on auction of "rights to use" another's properties or services
- Communicating with filers' managers as to the advance work they can perform to shortcut 990 documentation needs in this arena
- Ramifications and results of 990 Part VIII reporting on each of the two "public support tests"
None, although helpful to have some knowledge of how the Form 990 is structured