Session 4 of Borenstein's Form 990 Foundational Series: Most exempt organizations undertake fundraising sales and events, but GAAP reporting of the underlying transactions and results is at odds with the Form 990’s demands! Preparers need know both how these activities are defined for Form 990 purposes, and the extent to which their underlying components need be isolated and disclosed to meet the form's financial reporting parts (including inputting results on both Schedules G and M). It is not uncommon for preparers to incorrectly report upon these revenue items, failing to detail their distinct revenue streams, direct expenses, and associated solicitation expenses.
Public accounting tax and audit staff, and nonprofit organization's Treasurers, CFOs and other finance/compliance advisors
After attending this presentation you will be able to...
- Recognize the correct tax (Form 990) reporting of fundraised revenue via sales or events by both their separate character and timeframe
- 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
- Apply the unyielding 990 definition of "noncash contribution" and associated data capture needs for Part VIII reporting as well as amplification on Schedules G and M
- Identify when disbursement of pre-fundraising event or pre-sales goods (or other-acquired noncash contributions) constitute a direct expense of fundraising 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 noting companion Schedule G reporting) and noting insufficiency of GAAP reporting
- Handling PPP loan forgiveness as a revenue stream
- 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