Debt is an integral part of the strategic plans of many organizations, yet it has traditionally carried a stigma in the not-for-profit industry. That view is changing, as more organizations borrow money for major capital purchases, new program funding — even to manage current cash flow.
But if you're hoping to borrow funds, know that not all nonprofits qualify. And even if you're able to find a lender, it takes prudent financial management and reliable donor support to pay back a loan.
In the News
Tuesday, January 24, 2023
Tuesday, January 10, 2023
Games of chance like bingo and raffles are often synonymous with tax-exempt organizations. However, the income from such "gaming" activities operated by charities is not automatically tax-free. The IRS has provided more insight into the key rules in this area in its Publication 3079, Tax-Exempt Organizations and Gaming.
Wednesday, December 21, 2022
To qualify as a tax-exempt entity, a not-for-profit organization must comply with certain federal income tax laws. And to prove compliance, you must maintain records. There's no required recordkeeping system. In fact, your organization can choose any system that suits its activities and clearly shows your income and expenses.
Tuesday, November 29, 2022
Organizations that are created to provide goods or services exclusively (or primarily) to Section 501(c)(3) organizations (or governmental entities) may think that this purpose is sufficient to also qualify them under tax law.
Monday, November 21, 2022
Documentation and accountability are always important in business, but possibly even more so for not-for-profits. The sheer number of duties can be daunting. That's why it's critical to have tools that allow you to stay on top of the details.
Wednesday, November 2, 2022
Athletes say "no pain, no gain." The expression also applies to not-for-profit organizations.The point when the growing pains of an organization begin are prompted less by age than by changes in leadership, size, budget or programming. For example, a small nonprofit may receive national media attention that garners a significant, new source of funds. Or a founder may decide to hire an executive director and administrative staff.
Thursday, October 20, 2022
What should you do if your not-for-profit organization is short on employees and you don't have the funds or confidence in the future to return to full staffing? Outsourcing may be the answer.
Skip Steps One and Two
Tuesday, October 4, 2022
A contribution to a charity isn't always a tax-deductible contribution for the donor, as in the case of "quid pro quo" donations. This exchange of one thing for another happens when a charity receives a payment that includes a contribution and, in return, provides the donor with goods or services valued for less than the total payment.
Tuesday, September 27, 2022
It's no secret that the number of not-for-profit organizations is growing while the number of grant dollars is shrinking. Shifting from competing for grant funds to cooperating with other organizations can create substantial value for not-for-profits and the people they serve.
Tuesday, September 6, 2022
As your not-for-profit strives to use its resources as effectively as possible, you might at some point consider outsourcing the functions that fall under your accounting and financial umbrella. But wait: You'll first need to weigh the possible benefits and pitfalls.
