Tag Archives: Gifts in Kind

Financial Management

MFMP-logoI have written before about creating policies for your nonprofit. Now nonprofits have a new tool they can easily use to create their own financial management policies and plans. The Nonprofit Risk Management Center has a new tool called My Financial Management Plan where users can go through up to 21 different modules on nonprofit financial and accounting topics to create a variety of policies and procedures to help manage, organize and streamline their financial operations. From the Risk Management Center:

Nonprofit leaders have spent countless hours developing the necessary components of a financial management plan. But for many organizations the components, from an annual budget, return on investment strategy, cash flow planning tool and more, remain disparate. The nonprofit lacks a cohesive plan that reflects the organization’s commitment to the effective stewardship of its assets. My Financial Management Plan was created to guide leaders in updating the components of their financial management systems and integrating these components into a cohesive plan. This powerful system features covers topics such as Board Fiduciary Obligations, Managing Fraud Risk, Managing Cash Flow, Return on Investment Analysis, Cost Allocation, Classifying Net Assets, Managing Cash Flow, Budgeting, the form 990 and Grants and Contributions.

My Financial Management Plan is a powerful tool to turn financial management strategies, policies and protocols into a plan that will help your nonprofit demonstrate both competence and accountability. Use the “Plan Modules” feature to go through the 22 system modules. Each module offers the opportunity to upload existing material from your financial management system, create new content (based on our templates or created “on the fly”), or skip sections you don’t wish to use. Use the “Manage My Plan” feature to edit your draft plan, upload supporting PDF files and view/download your plan. The system also features a classroom with easy-to-understand articles and resources on a wide range of financial management topics.

I was fortunate enough to work on this project and create a lot of the module content. I know that this will be a great tool for nonprofits to learn about what they need know about with regards to their nonprofit’s finances and creating the appropriate policies and procedures to ensure good financial stewardship. For those not ready to buy access to the program you can register with the site to receive periodic email updates on nonprofit financial issues.

If you have any questions or comments about the program please let me know via email or in the comments below.

Workshop Resources, Questions and Answers

Questions?As part of my follow-up to recent workshops that I’ve run in the last few weeks I wanted to answer a few questions.  But first I wanted to thank Alltop.com for including this blog in their list of nonprofit blogs.  It feels great to be in such respected company!

Managing the Money, Managing the Organization

For the Managing the Money, Managing the Organization workshop in Long Beach, you can download the handouts from the event here.  For those who are interested in looking at a budget narrative I have linked to a PDF of one here.  An online search of “sample budget narrative” will reveal a lot more.

Building Financial Literacy

From part one of the Building Financial Literacy workshop in Ventura there was a question about vehicle donation guidance.  I would refer all those interested in this to this PDF from the IRS. For other IRS contributions and donation information please check the IRS links and resources to the right. For the folks who wanted information on how to value in-kind donations, please click here.

Nonprofit Summer School

Thanks to all the folks who spent the day with me talking about nonprofit accounting issues at Cal State Fullerton’s event. Many of the questions were about QuickBooks issues, I would direct you to this page of the site for more information and resources.

For more information and resources I usually mention, please check here. And if I missed your question or you have others please feel free to remind me!

More Questions and Answers – Donated Items and Services

I have received a rash of questions lately on donation and valuation information for in-kind gifts.  I mentioned my post about valuation information above.  I have another post about how to enter in donation transactions and another on valuing donated services.  I hope those help.

More Questions and Answers – Employee Time and Cost Allocation

Question: We are just starting our marketing and communications program (hiring a marketing manager, revamping our website, etc.). I do not believe that I should classify 100% of these costs as fundraising (the website is mostly about information sharing and public relations). Rather I consider classifying some as program costs, some as administrative expenses and some as fundraising depending on the activities purpose. Is that correct?

Answer: Yes. Not all of the costs described should be lumped into fundraising. The costs should be allocated between programs, admin and fundraising as appropriate.

For example, the marketing manager spends time designing some promotional materials to get word out about a particular program you do. I’d say that is a program expense. Weather particular funder allows their money to be spent on advertising is a separate matter, but the expense is still a program expense. If that same person is designing something to be used for a fundraising gala, that would be a fundraising expense. If they are designing new signage for your offices? The expenses would probably be administrative.

You can click here for many more questions and answers.

Gifts-In-Kind Valuation

Several questions from my trainings have been about non-cash donations and how to value them. The PPC Guide to Contributions has the best guidance out there on the subject and I still highly recommend them, a worthy investment for your nonprofits financial well being.

How do we value food donations for our “Taste Of…” event?

Fair value must be determined. According to SFAS 157, Fair Value Measurements, the fair value is, “the price that would be received to sell an asset or paid transfer of liability in an orderly transaction between market participants at the measurement date. The quoted price for identical assets in an active market is the most reliable evidence.”

For this question, if a restaurant is providing you with 300 deserts, what do they sell the deserts for? If they are catering at your event, what do they normally charge for catering? Those quoted prices (or better yet and invoice) would be what you would use to value the donations.

Can the suggested starting bid on an item to be sold at auction be used as the fair value?

Yes, with exceptions. If a vendor gives you something to auction for your charity event and places a “suggested starting bid” sticker on it, that can be used. But if you have sold similar items before and what they suggest doesn’t match what you have used in the past that suggestion won’t work. Checking other resources on how the item might be valued would also be a good idea.

We have a golf tournament where everything is donated. Donors then buy tickets for the event. Is the whole ticket deductible to the those donors?

From what I can tell it is not. The non-deductible portion of the ticket represents the estimated fair market value of the goods or services received by the donor in return for the contribution. How much would the donor normally have had to pay to play golf at the location? The fact that the nonprofit did not incur any costs for the facility is irrelevant to the benefit received by the donor.

What are some resources for valuing donations?