Monthly Archives: June 2019

Developing a fundraising plan that works

A not-for-profit can have many strengths — a prominent board of directors, dedicated volunteers, committed staff members and effective programs — and still struggle to meet fundraising goals. Often, such nonprofits lack a strategic fundraising plan. Here’s how to develop one that can get better results.

Get the committee rolling

The first step is to form a fundraising committee consisting of board members, your executive director and other key staffers. You may also want to include major donors and active community members.

Committee members should start by reviewing past sources of funding and past fundraising approaches, and weighing the advantages and disadvantages of each. Even if your overall fundraising efforts have been less than successful, some sources and approaches may still be worth keeping. Next, brainstorm new donation sources and methods and select those with the greatest fundraising potential that are also likely to succeed.

As part of your plan, outline the roles you expect board members to play in fundraising efforts. For example, in addition to making their own donations, they can be crucial links to corporate and individual supporters.

Set it in motion

Once the committee has developed a plan for where the funds will hopefully come from and how to ask for them, it’s time to create a functional budget that includes operating expenses, staff costs and volunteer projections. Then, after the plan and budget have board approval, develop an action plan for achieving each objective and assign tasks to specific individuals.

Most important, once you’ve set your plan in motion, don’t let it sit on the shelf. Continually evaluate the plan and be ready to adapt it to organizational changes and unexpected situations. Although you want to give new fundraising initiatives time to succeed, don’t be afraid to cut your losses if it’s obvious an approach isn’t working.

Planning pays off

Developing a strategic plan for successful fundraising can take time and effort. However, it’s been said that every hour in effective planning saves three to four hours of work. Just remember that planning doesn’t replace doing.

Contact us for more ideas on how to meet fundraising objectives and grow your nonprofit’s revenues.

© 2019

IRS raises valuation limit for employer-provided vehicles

One of the most popular fringe benefits for employees at many organizations isn’t an insurance plan or a health club membership; it’s shiny chrome and steel — a vehicle. Providing a car, van or truck that an employee can use for both work and personal purposes can attract better job candidates or just make sense practically. If your organization offers such a fringe benefit, you should know that the IRS recently updated its valuation limit for employer-provided vehicles.

Read the Notice

Generally, you must include the value of an employer-provided vehicle that’s available for personal use in an employee’s income and wages. The personal use may be valued using the cents-per-mile or fleet-average valuation rules for the 2019 calendar year.

Because of tax law changes under the Tax Cuts and Jobs Act (TCJA), the maximum dollar limitations on the depreciation deductions for passenger automobiles significantly increased and the way inflation increases are calculated changed. In Notice 2019-8, issued early this year, the IRS and the U.S. Treasury Department noted their intention to amend regulations to incorporate a higher base value of $50,000 to be adjusted annually.

Sure enough, in May the IRS issued Notice 2019-34. It provides that, for 2019, the maximum fair market value of a vehicle (including cars, vans and trucks) for use with the vehicle cents-per-mile and fleet-average valuation rules is $50,400.

Expect revisions

Because current regulations haven’t yet been updated to reflect the changes under the TCJA, the IRS provides relief to taxpayers in the form of interim guidance for 2019 in the notice. The agency (along with the Treasury Department) intends to revise the rules for the 2018 and 2019 tax years.

One example of the intended revisions addresses what an employer should do if it didn’t qualify to adopt the vehicle cents-per-mile valuation rule on the first day on which a vehicle was used by an employee for personal use because, under the rules in effect before 2018, the vehicle had an FMV more than the maximum permitted. In such cases, the employer will be allowed to first adopt the vehicle cents-per-mile valuation rule for the 2018 or 2019 tax year based on the maximum FMV of a vehicle for purposes of the vehicle cents-per-mile valuation rule.

Another intended revision noted in Notice 2019-34 will permit an employer to adopt the fleet-average valuation rule for the 2018 or 2019 tax year if the employer didn’t qualify to use the fleet-average valuation rule before January 1, 2019, because the maximum value limitation before 2018 couldn’t be met.

Rely on the guidance

Until revised final regulations are published, taxpayers may rely on the interim guidance provided in Notice 2019-34. Our firm can help you fully understand both the interim guidance and any future revisions to the rules for employer-provided vehicles. Contact us today with any questions you may have!

© 2019

Adult Care News

Adult Care Homes (ACH) and other types of Group Homes in North Carolina have compliance requirements under the General Assembly’s Statute 131 D-4.1-4.3.  In May, DHHS sent out letters to all affected providers to remind them of this obligation.  These legislative changes mandate that cost reports be filed for these facilities every two years.  2019 is an on year for facilities licensed as an Adult Care Home (131D), Nursing Home with Adult Care beds (131E), or Mental Health living facility (122C).  Facilities that do not receive State/County Special Assistance revenue can file an exemption.

Along with the cost report, facilities with over 7 beds are additionally required to have Agreed-Upon-Procedures (AUPs) performed.  Depending on the type of facility, determines the extent of the procedures.  The Office of the Controller just released the procedures required for 2018-2019 which can be found here.

Langdon & Company has an extensive history with these requirements and we keep a great rapport with the acceptance bodies to ensure that our reports are filed correctly and timely.  We would love the opportunity to discuss the obligations of your facility and assume the responsibility of this mandate.  If you have additional questions, please contact us.

Holding on to your nonprofit’s exempt status

If you think that, once your not-for-profit receives its official tax-exempt status from the IRS, you don’t have to revisit it again, think again. Whether your organization is a Section 501(c)(3), Sec. 501(c)(7) or other type, be careful. The activities you conduct, the ways you generate revenue and how you use that revenue could potentially threaten your exempt status. It’s worth reviewing the IRS’s exempt-status rules to make sure your organization is operating within them.

Hot buttons

There are many categories of tax exemption — each with its own rules. But certain hot-button issues apply to most tax-exempt entities. These include:

Lobbying. Having a Sec. 501(c)(3) status limits the amount of lobbying a charitable organization can undertake. This doesn’t mean lobbying is totally prohibited. But according to the IRS, your organization shouldn’t devote “a substantial part of its activities” trying to influence legislation.

For nonprofits that are exempt under other categories of Sec. 501(c), there are fewer restrictions on lobbying activities. Lobbying activities these groups undertake must relate to the accomplishment of the group’s purpose. For instance, an association of teachers can lobby for education reform without risking its tax exemption.

Campaign activities. The IRS considers lobbying to be different from campaign activities, which are completely off limits to Sec. 501(c)(3) organizations. This means they can’t participate or intervene in any political campaign for or against a candidate for public office. If you’re not a 501(c)(3) organization, campaign restrictions vary.

Excess profit and private inurement. The cardinal rule about profits is that a nonprofit can’t be operated to benefit private interests. If your fundraising is successful and you have extra income, you must put it back into the organization through additional services or by creating a reserve or an endowment. You can’t use extra income to reward an individual or a person’s related entities.

Unrelated revenue. If you’re generating income through a trade or business you conduct regularly and it’s outside the scope of your mission, you may be subject to unrelated business income tax (UBIT). Examples include a university that rents performance halls to nonuniversity users or a charity selling advertising in its newsletter.

Almost all nonprofits are subject to this provision of the tax code, and, if you ignore it, you could risk your exempt status. That said, losing an exempt status from unrelated business income is rare.

Know the rules

IRS Publication 557, Tax-Exempt Status for Your Organization, outlines the rules for all nonprofits that qualify for exempt status. We can help your nonprofit interpret and apply the information based on its specific situation. Contact us today!

© 2019