I’m either asked these questions or I come across them in my work. Here are three somewhat common ones.
Our nonprofit is getting ready for our first audit. What are we supposed to do, and what does the auditor do?
You should receive a letter of engagement from the auditors that helps spell out the relationship. You’ll also get a lists of things to do and get ready before the auditors come to your offices for the field work. This article also talks about the process. But if you have any questions you should ask your auditors before things get going to avoid any confusion and additional cost.
Should board members be allowed to contact staff directly? Or should all contact go through the Executive Director?
This was a question on an email listserv and the answer that I liked was posted here.
I would like to have “Gross Receipts” defined. Would this include the value of our volunteer labor? Or is it strictly cash value of donations received?
Gross receipts would typically not include the value of general volunteer labor for IRS reporting. Contributed services to a nonprofit that do qualify as a contribution, hence reportable income and a related expense to the organization, must fit a narrow category as defined by the IRS. More details can be found here.
Even for regular GAAP accounting gross receipts would generally only be monetary income to the organization; earned income, contributions, grants, interest, royalties, rents, donations, etc. But for internal purposes, board reporting, management reports and perhaps even donor and funder reports, you could include the value of your volunteer labor in a foot note. Perhaps with a statement along the lines of,
The organization receives donated labor at an estimated value of $XXX, without which the organization would…
Even the new form 990 has a place to list that, in the section that describes program activities. If you need help in estimating the value of volunteer time this page may be a good starting place.
Have any questions you would like answered? Click here and fire away. Want to see other Q&A posts? Check out this link.