Monthly Archives

September 2019

Sep 17
0

Cryptocurrency Donations: Unraveling the Mystery

By | Cryptocurrency | No Comments

Cryptocurrency made headlines over the past several years as bitcoin jumped in price then plummeted. Now on the rebound, the ubiquitous altcoin (short for “alternative coin”) is just one of hundreds of cryptocurrencies listed on exchanges such as Bitifinex, Binance, and Kraken.

Are cryptocurrencies “money”? Do they have intrinsic value? Can you accept them as gifts to your nonprofit? Here’s our guide to accepting the new money as gifts to your organization.

What Is Cryptocurrency?

Cryptocurrency is a term for digital money. This money isn’t backed by a government. Instead, the coinage occurs on a digital transaction called the blockchain. Each coin has its own blockchain, which is a permanent, public, and immutable ledger of transactions.

Any company, individual, or entity can launch a cryptocurrency. The field is currently unregulated, with no global standard, so it is ‘buyer beware’ when purchasing cryptocurrencies. Typically, each coin launches with a lengthy white paper which details the purpose of the coin, the blockchain it is based on, and the plans the company has for its future. Most companies launching cryptocurrency also produce a website which links to the exchanges the coin is listed on and where you can buy or sell it. The exchange also contains the current trading volume and value for any coin.

When a new coin arrives on the trading scene, its value is set by the number of coins minted on the blockchain. As trading demand rises and falls, value increases and decreases similar to stocks or traded commodities like gold or silver.

Can Nonprofit Accept Cryptocurrency as Gifts?

Yes, but it is essential to research any coins offered as gifts and designate the gift appropriately in your accounting system. The U.S. Treasury classifies altcoins as intangible property or a commodity. Don’t let the term “coin” or “cryptocurrency” confuse you – these are not legal tender like dollars, euros, or pounds, but intangible property, more akin to patents, trademarks or similar intangible assets.

To accept cryptocurrencies as gifts, you will need to update your nonprofit’s policies to state your position on digital money. Then, the nonprofit will need a digital wallet. Because cryptocurrency is a digital asset, it must be transmitted electronically into a virtual ‘wallet’ which stores the coins securely. Then, after the transfer is confirmed on the blockchain (which may take up to several days), you can exchange the coin for the currency of your choice or hold it in the digital wallet to see if it increases in value.

Security

Each wallet includes a private “key” and a public key which unlocks the wallet for transfers. Setting up two-factor authentication is a smart move for any online transaction requiring high security, but especially crucial for cryptocurrency. There is nothing backing your altcoins; if they are stolen, and they can be, then you have no recourse as you would if a bank failed. There is no such thing as FDIC insurance on cryptocurrency.

Like any digital asset, cryptocurrencies and related secure information, such as keys to unlock the wallet, can be compromised, especially if the computer where the data is kept is linked to the web. You may wish to upgrade security or store everything in a cold computer (one not connected to the internet) to prevent hackers from breaking in to steal the information.

Banking Concerns

Banks sometimes freeze accounts that accept cryptocurrency. To prevent your accounts from being temporarily frozen, you may wish to establish separate bank accounts for cryptocurrency gifts and another for your organization’s general needs.

It’s a cliché to say that young people are more open to using cryptocurrency than other demographics, but it is true. If your organization serves the 20-something crowd, consider adding crypto to the list of assets you can accept as gifts. Although it may seem strange to accept alt currencies, it’s no stranger than people donating funds with credit cards. It’s just a new way of thinking about money and donations.

Welter Consulting

Welter Consulting bridges people and technology together for effective solutions for nonprofit organizations. We offer software and services that can help you with your accounting needs. Please contact Welter Consulting at 206-605-3113 for more information.

Sep 11
0

MIP Fund Accounting 2019.3 Releases on September 19, 2019

By | MIP Fund Accounting | No Comments

Here’s what you need to know about the MIP Fund Accounting update, v2019.3.

This release contains high-quality updates, expanded reporting capabilities, more flexibility and usability and a number of improvements within the Payroll module.
Improvements in the release:
  • Reports:
    • Financial Statements – Statement of Cash Flows – added the default format for the indirect method
    • Financial Statements – Statement of Activities – added option ‘Include Unposted Transactions’ in the report
    • Accounts Payable – Vendor Activity – added filter ‘Zero Activity’ to get vendors with no activity
  • Payroll:
    • Added additional columns for more flexibility in reporting within payroll module
  • Organization:
    • Data Integrity Checks – Removed exclusive access requirement and replaced with a system lock search (disallowed when posting or close-year is in progress)
  • Improved Help experience:
    • Changed Help to be accessible via the web, enabling us to provide documentation updates between releases
  • Enhanced audit trail:
    • Activities – Reconcile Cash Accounts - added logging to the Summary Organization Audit when an existing Reconciliation ID is deleted
  • Quality improvements across MIP
Microsoft Support Changes

Please note the MIP v19.3 workstation installation will take additional time due to Microsoft .Net 4.8 framework being required. If your machine already has .Net 4.8 installed or your IT professional installs .Net 4.8 prior to the MIP workstation installation, please disregard this message.

Windows Versions of MIP released after January 31, 2020 will no longer be supported on Windows 7 SP1.

Support trending topics:

Ready to move your MIP to the cloud?

Even if you haven’t joined the group of cloud adopters, you’ve probably considered it, researched it, or discussed it with your peers. If your organization is ready for a deep dive, now is a good time to check out the benefits of MIP Cloud. Or, request a custom demo with us now.
Sep 10
0

Five Tips for Accurate Form 990 Reporting and Filing

By | Tax | No Comments

One of the most important financial filings nonprofit organizations must complete annually is IRS Form 990. For smaller nonprofits, this form may be the only action it takes each year to provide comprehensive financial information to the public and other organizations, such as grantors or charity watchdogs.

According to the Journal of Accountancy, Form 990 is one of the more challenging IRS forms. It’s complex, lengthy, and intimidating. The following tips may make reporting on 990 easier for your organization.

Which Version Should You File?

As with the personal income tax form 1040, there is an “EZ” version and a standard version. Nonprofits with gross receipts of less than $50,000 may wish to consider completing the EZ version. It’s always a good idea to meet with your accountant or with Welter Consulting to discuss which form may suit your nonprofit better and the advantages and disadvantages of each.

If your organization earns gross receipts between $50,000 and $200,000, you can choose between 990 EZ and 990. Any organization earning more than $200,000 should complete the standard 990. Private foundations, regardless of income status, must complete 990-PF.

Prepare for Filing

Gather your financial information, calculator, pens, paper, and records before sitting down to work on your 990. Some like to print a paper copy of the form and use it as a draft version. Once they are satisfied they have completed the form, they can then transfer it to the online filing system.

If you are using a not-for-profit accounting system such as Abila MIP Fund Accounting, it is easy to review the financial information needed for form 990. Others still using spreadsheets or general small business accounting software may need more time to review the numbers, find all the information, and prepare their report.

5 Tips for IRS Form 990

As you work on form 990, keep the following in mind:

  1. Do not include unnecessary personal information: Form 990 is made public and often shared with other organizations. Including personally-identifying information should be avoided as much as possible. In today’s world, with rampant identity theft, thieves find information through many sources, including published data. Don’t make their job any easier than it already is – do not disclose anything other than what is required.
  2. Complete parts I through XII: You can’t skip any parts between I and XII if you are filling out form 990 standard. Some mistakenly believe sections do not apply to their organization, but the IRS requires completion of the entire form.
  3. Include required schedules: After completing Part IV, you will have a list of all required schedules for your form. The IRS recommends double-checking the schedules to ensure they are complete. Be sure to include “0” on lines without an entry and answer “yes” or “no” to each question as required.
  4. Complete Schedule A: Speaking of Schedules, all 501(c) 3 organizations should complete Schedule A. Organizations with a designation of 4947(a) should also complete Schedule A. Failing to complete this schedule can result in penalties.
  5. Sign the return: You’d be surprised at how often people forget this simple step. Sign, date, and file the return!

Although no one enjoys completing IRS forms, they are necessary to ensure all financial information is reported accurately and promptly to the government.  Nonprofits must adhere to IRS reporting guidelines or run the risk of losing their tax-exempt status. By completing Form 990 promptly and thoroughly, you’ll rest easy knowing it’s done for the year and have a valuable document demonstrating your organization’s financial status.

Welter Consulting

Welter Consulting bridges people and technology together for effective solutions for nonprofit organizations. We offer software and services that can help you with your accounting needs. Please contact Welter Consulting at 206-605-3113 for more information.

Sep 03
0

Myth-Busting: What Grantors Want You to Know

By | Grant Management | No Comments

Would you like to receive more grants for your organization? Who wouldn’t?

Even the most professional grant writer and  nonprofit organization would like to improve their chances of obtaining more grant funds. Grants, especially open grants that can be used for any expenses, are the financial lifeblood of many nonprofits. Some organizations still struggle with achieving their funding goals.

The reason may be as simple as a misunderstanding. If you aren’t familiar with what goes on at foundations or other groups offering grant funds, you may be giving up too soon in your quest for additional funds. Here’s what granting organizations wished their grantees knew before, during, and after the application process.

Five Myths About the Grant Process

Myth #1: Grantors have all the power in the relationship.

Fact: Grantors wish you’d consider them as equals in the partnership. After all, they want to give funds to organizations that support their mission. They want to partner with you to see that goals are achieved on both sides. Treat them as equals and partners in your mission, and you’ll build better long-term relationships.

Myth #2: Make your pitch first, then ask for funds.

Fact: Instead of a pitch, consider dialoguing with the granting organization. Talk about the common interests and issues you both face and how these might be addressed. Then discuss the potential funds to help address the issue. Instead of making a big lengthy sales pitch, conversation and dialogue interests grantors more than being sold an idea.

Myth #3: Our “no” means “no,” so don’t ask again.

Fact: If you receive a negative response, try again another time. It could mean that the mission alignment isn’t right, but it could also mean that funds have already been earmarked for other groups. There’s no harm in trying again, and you may be surprised by the response.

Myth #4:  We don’t mind multiple calls and talks.

Fact: Although grantors do appreciate conversation and dialogue, prepare for meetings with the same care and attention that you would when meeting with any other donor. Don’t waste a grantor’s time during meetings. Check their website or other resources for answers to your questions before asking. Take notes so that you do not ask the same question over again. Be respectful of the grantor’s time. And yes, they should also be respectful of your time. A grantor-grantee relationship is a professional relationship. Mutual respect and a professional approach is part of building such a relationship.

Myth #5:  If you act like you are a large, prestigious organization, you are more like to obtain grants.

Fact:  Grantors don’t care if you are from a small nonprofit or a large global nonprofit. What they do care about is an alignment between their mission and yours. They want to be sure they understand the mission and values of your organization and how their funds will be used to achieve the mission. Grantors value authenticity more than appearance. It’s okay to admit your nonprofit has only three full-time employees or a small budget. “Be yourself” is a good adage in any situation and especially when meeting with grantors.

Finding and Securing Grants Isn’t Rocket Science

It’s hard work, diligence, and common sense. Securing grants means developing relationships over time with grantors, who value the same things that you do.

To track, measure, and monitor your work, grant, or contract management software can help you remain focused and organized. It will also help you measure the real impact of your efforts. Cloud-based (web) software enables you to continually monitor and track grants and related information even while traveling.

Securing grants isn’t a mystery. When too many myths cloud the facts, it can seem like a mysterious process. Once the myths are busted, however, you’ll be in a better position to work with, not against, grantors to find additional funds for your nonprofit.

Welter Consulting

Welter Consulting bridges people and technology together for effective solutions for nonprofit organizations. We offer software and services that can help you with your accounting needs. Please contact Welter Consulting at 206-605-3113 for more information.