emerging trends in the nonprofit industry · proposed budget changes . in president trump’s first...
TRANSCRIPT
Emerging Trends in the Nonprofit Industry
Is Your Organization Prepared?
Robert W. Albrecht, CPA
Audit Partner
Jennifer Arminger, CPA
Audit Partner
Presented by:
GELMAN, ROSENBERG
& FREEDMAN Certified Public Accountants www.grfcpa.com |
Contact Webex at 1-866-229-3239
Event #628-863-995 / Event Password: GRF2017
The webinar will be recorded and made available after the event
Please use the “Chat” function for any technical questions
2
Housekeeping Technical Difficulties?
GELMAN, ROSENBERG
& FREEDMAN Certified Public Accountants www.grfcpa.com |
• Attendees seeking CPE for this presentation must complete and submit a short evaluation survey that
will pop up on their screens after the webinar ends
• Three words will be shared during the webinar; the survey will ask you for those words
• Attendees cannot claim CPE unless we receive a completed evaluation with the correct words
• Technical questions about the survey can be addressed to Alina Stone at [email protected], or at
301-664-9357
• Turn off your pop-up blocker
• This presentation is available to download at www.grfcpa.com/media/519.pdf
3
Housekeeping CPE Credit Information
GELMAN, ROSENBERG
& FREEDMAN Certified Public Accountants www.grfcpa.com | 4
Housekeeping Webinar Objectives
Learning Objective To provide attendees with a better understanding of
emerging trends in the nonprofit industry.
Instructional Delivery Methods Group Live; Group Internet-based
Recommended CPE 3.0 CPE
Recommended Fields of Study Accounting
Prerequisites None required
Advance Preparation None
Program Level Intermediate
Course Registration Requirements None
Refund Policy No fee is required to participate in this session.
Cancellation Policy In the event that the presentation is cancelled or rescheduled,
participants will be contacted immediately with details.
Complaint Resolution Policy Gelman, Rosenberg & Freedman is committed to our seminar participants’ 100% satisfaction and will make every reasonable
effort to resolve complaints as quickly as possible. Please contact [email protected] with any concerns.
GELMAN, ROSENBERG
& FREEDMAN Certified Public Accountants www.grfcpa.com | 5
Our Team Meet your instructors
Mr. Albrecht specializes in auditing and consulting for nonprofit
organizations that receive funding from agencies of the US
Government. Recognized as the firm’s leader with respect to
international non-governmental organizations, Mr. Albrecht has
traveled to over 100 countries on behalf of the firm’s international
clients.
Robert W. Albrecht, CPA
Nonprofit Audit Partner
Jennifer Arminger, CPA
Nonprofit Audit Partner
Ms. Arminger has spent her career specializing in financial
management, accounting and auditing for tax-exempt organizations
with a concentrated expertise in compliance with Uniform Guidance.
She is responsible for managing all phases of nonprofit audit and
consulting engagements in accordance with both generally accepted
and government auditing standards.
GELMAN, ROSENBERG
& FREEDMAN Certified Public Accountants www.grfcpa.com |
Agenda
6
1 | New Administration Changes
2 | Foreign Government Funding
3 | Millennial Donors & Social Media
4 | Donor-Advised Funds
5 | Phishing Scams
6 | New Accounting Standards
Emerging Trends in the Nonprofit Industry
New Administration Changes
GELMAN, ROSENBERG
& FREEDMAN Certified Public Accountants www.grfcpa.com |
Emerging Trends in the Nonprofit Industry
Uncertainty for nonprofits
The new administration has brought a lot of uncertainty to Washington,
D.C. (and the nation), and nonprofits are not immune to the
unpredictability of the Trump presidency. The two most trending topics
that have potential impacts on the tax-exempt community include:
• Proposed budget changes
• Tax reform
8
New Administration Changes
GELMAN, ROSENBERG
& FREEDMAN Certified Public Accountants www.grfcpa.com |
Emerging Trends in the Nonprofit Industry
Proposed Budget Changes
In President Trump’s first proposed federal budget, we saw deep cuts in discretionary spending to many
departments that impact nonprofits, while financial resources were increased for defense, homeland security
and veteran’s affairs.
The budget proposes defunding 18 agencies including the National Endowment for the Arts, National
Endowment for the Humanities, Corporation for National and Community Service and Corporation for
Public Broadcasting.
9
New Administration Changes
GELMAN, ROSENBERG
& FREEDMAN Certified Public Accountants www.grfcpa.com |
Emerging Trends in the Nonprofit Industry
Other Agency Cuts/Changes • EPA: Geographic watershed programs, as well as 50 other EPA programs
• DHHS: Health professionals and Nurse training, Community Services Block
grants
• USDA: Water and Wastewater Disposal Program
• HUD: Community Development Block Grants
• DOS & USAID: Global Climate Change, Emergency Refugee & Migration
Assistance
• DOE: Effective Instruction Program, Community Learning Centers,
Educational Opportunity Grants
10
New Administration Changes
GELMAN, ROSENBERG
& FREEDMAN Certified Public Accountants www.grfcpa.com |
Emerging Trends in the Nonprofit Industry
Tax Reform
While the anticipated tax reforms will not directly address nonprofit organizations, there are
two main changes that could have a potential effect on the community:
• Increase in the standard deduction
• Caps on taxpayers write-offs
11
New Administration Changes
GELMAN, ROSENBERG
& FREEDMAN Certified Public Accountants www.grfcpa.com |
Emerging Trends in the Nonprofit Industry
Increase in the standard deduction
At face value, a higher standard deduction is a win for the majority
of taxpayers. However, the larger standard deduction (more
money available instead of itemizing) could potentially deter
people from making charitable contributions for the purpose of
increasing and gaining the benefits from itemizing.
12
New Administration Changes
GELMAN, ROSENBERG
& FREEDMAN Certified Public Accountants www.grfcpa.com |
Emerging Trends in the Nonprofit Industry
Caps on taxpayer write-offs
President Trump has suggested that his proposed tax plan would include a
cap on the amount taxpayers can write off (proposed: $100,000 for singles
and $200,000 for couples). Although this proposed change would only
affect the top 1% of Americans, the impact could potentially be significant
for those “big donors”.
13
New Administration Changes
Emerging Trends in the Nonprofit Industry
Foreign Government Funding
GELMAN, ROSENBERG
& FREEDMAN Certified Public Accountants www.grfcpa.com |
U.S. nonprofits seeing more foreign government funding Over the past decade, U.S.-based nonprofit
organizations have seen an increased level of funding
provided by Foreign Governments (DFID, SIDA,
NORAD, and more).
This type of specific funding is provided to international
NGOs focused on combating international issues and
building capacities, globally.
15
Foreign Government Funding
Emerging Trends in the Nonprofit Industry
GELMAN, ROSENBERG
& FREEDMAN Certified Public Accountants www.grfcpa.com |
Emerging Trends in the Nonprofit Industry
What we see
When accepting and implementing programs funded
under foreign government agencies, notable trends
include:
• Increased reporting requirements
• Separate audits
• Managing foreign currency exchange
16
Foreign Government Funding
Emerging Trends in the Nonprofit Industry
Millennial Donors and Social Media
GELMAN, ROSENBERG
& FREEDMAN Certified Public Accountants www.grfcpa.com |
Donor behavior in the millennial generation
Having a mission and programs that appeal to the millennial
generation is a significant factor in any nonprofit’s success in
today’s environment.
More importantly, how can your organization capitalize on
the factors that really motivate millennials?
18
Millennial Donors and Social Media
Emerging Trends in the Nonprofit Industry
GELMAN, ROSENBERG
& FREEDMAN Certified Public Accountants www.grfcpa.com |
Emerging Trends in the Nonprofit Industry
19
Millennial Donors and Social Media
What we see:
Access to Information – This generation has
unlimited resources for researching organizations
The “Experience” – The younger generation is more
apt to buy an experience
Accountability – Millennial donors want to know
their money is being used in the best way possible
Impact – One of the top reasons they become part of
or contribute to an organization
Impulse “buyers” – There is a certain level of
unpredictability to the generation
Social Collaboration – Being part of a social
network/group with exclusive access
GELMAN, ROSENBERG
& FREEDMAN Certified Public Accountants www.grfcpa.com |
Engaging through social media
• Online giving
• Embracing various social media outlets
• The next big campaign
20
Millennial Donors and Social Media
Emerging Trends in the Nonprofit Industry
Emerging Trends in the Nonprofit Industry
Donor-Advised Funds
GELMAN, ROSENBERG
& FREEDMAN Certified Public Accountants www.grfcpa.com |
Grant-making
• Grant-making from DAFs increased 16.9%
• 2015 fastest growing
• Five year average is 14.5%
Contributions
• 2016 reached an all-time high
• Five year average is 20%
22
Donor-Advised Funds
Emerging Trends in the Nonprofit Industry
Source : https://www.nptrust.org/daf-report/recent-growth.html
GELMAN, ROSENBERG
& FREEDMAN Certified Public Accountants www.grfcpa.com |
Emerging Trends in the Nonprofit Industry
The Appeal of Donor-Advised Funds
23
Tax Deduction
Receive an immediate
tax deduction for full
gifted amount
Capital Gains
No capital gains tax on
the donated
shares/amount
Time
Allows additional time
for donor to choose a
charity to fund
Donor-Advised Funds
Emerging Trends in the Nonprofit Industry
Phishing Scams
GELMAN, ROSENBERG
& FREEDMAN Certified Public Accountants www.grfcpa.com |
“ IRS Notification on W-2 Phishing Scam
Targeting Nonprofits
On February 2, 2017, the IRS issued an urgent alert to all
employers that the Form W-2 email phishing scam has
evolved beyond the corporate world and is spreading to other
sectors, including nonprofits
This is one of the most dangerous email
phishing scams we’ve seen in a long time. It can
result in the large-scale theft of sensitive data…
Emerging Trends in the Nonprofit Industry
25
Phishing Scams
“
GELMAN, ROSENBERG
& FREEDMAN Certified Public Accountants www.grfcpa.com |
Emerging Trends in the Nonprofit Industry
How it works
Cybercriminals use spoofing techniques to disguise an email to make it appear as if it is from an
organization executive. The email is sent to an employee in the payroll or human resources
departments, requesting a list of all employees and their Forms W-2.
In the latest twist, the cybercriminal follows up with an “executive” email to the payroll or
comptroller and asks that a wire transfer be made to a certain account.
26
Phishing Scams
GELMAN, ROSENBERG
& FREEDMAN Certified Public Accountants www.grfcpa.com |
Emerging Trends in the Nonprofit Industry
Actions to take
• Employee education and training
• Reporting suspect instances to the IRS
• Identity theft monitoring
27
Phishing Scams
Emerging Trends in the Nonprofit Industry
New Accounting Standards
GELMAN, ROSENBERG
& FREEDMAN Certified Public Accountants www.grfcpa.com |
Nonprofit Financial Statements
FASB 2016-14
Effective fiscal years beginning after December
15, 2017, non-profit financial statements will
have several changes to include a change in net
asset categories (from 3 to 2), and enhanced
disclosures on liquidity, endowments, etc.
Revenue Recognition
FASB 2016-20
Effective fiscal years beginning after
December 15, 2018, revenue
recognition from contracts with
customers should depict the transfer of
goods/services in an amount it expects
to be entitled using a 5-step process.
Emerging Trends in the Nonprofit Industry
29
New Accounting Standards
Lease Accounting
FASB 2016-02
Effective fiscal years beginning after
December 15, 2019, operating
leases, greater than one year, will be
included on the Statement of
Financial Position as a “Right-of-use
asset” and corresponding liability.
4550 Montgomery Avenue,
Suite 650N, Bethesda, MD 20814
(301) 951-9090
www.grfcpa.com
twitter.com/grfcpas
facebook.com/grfcpas
linkedin.com/company/gelman-
rosenberg-&-freedman-cpas
instagram.com/grfcpas/
Robert W. Albrecht, CPA [email protected]
(301) 951-9090
Jennifer Arminger, CPA [email protected]
(301) 951-9090
Get In Touch
Join us again at our next webinar
“The Road to Audit Readiness: Best Practices for Closing the Books at Year-end”
May 24th, 2017, 11:00 a.m. to 12:00 p.m.