Money and How to Get it

Allocation methods. SOP 98-2 prescribes that the cost allocation methods used to allocate joint costs should be rational and systematic, resulting in an allocation of joint costs that is reasonable. The method should be applied consistently given similar facts and circumstances. Appendix F of SOP 98-2 describes three commonly used allocation methods for allocating joints costs. Read the rest of this entry »

Basic guidance. SOP 98-2 establishes the criteria of purpose, audience, and content, which if met, permit the costs of a joint activity that are identifiable with a function to be charged to that function and the joint costs to be allocated between fund-raising and program and management and general functions. If any of the criteria are not met, all costs, including those costs that might have been considered program or management and general costs if they had occurred in a different activity, are Read the rest of this entry »

A joint activity is an activity that is part of the fund-raising function and has elements of one or more other functions, such as program, management and general, membership development, and any other functional category used by not-for-profit organizations. Read the rest of this entry »

Many not-for-profit organizations solicit financial support from the public through a variety of fund-raising activities, including direct mail, door-to-door canvassing, telephone solicitation, telethons, and special events. Some of the costs incurred by such organizations are clearly identifiable with fund-raising, such as the cost of fund-raising consulting services. However, Read the rest of this entry »

Overview
Fund-raising expenses are those expenses incurred to induce donors to contribute to an organization. Such expenses must be reported separately in the financial statements of organizations that solicit significant amounts of gifts from the general public. The FASB standards require such disclosure by all not-for-profits (except where these costs are immaterial to an entity). Issues relating to these expenses include what types of expenses should be called fund-raising, when they should be reported as expenses, and when and how to allocate multiple-purposes expenses. Read the rest of this entry »

Operating:

A shares with R many of the following operating functions:

personnel/payroll

purchasing

professional services Read the rest of this entry »

Governance:

A’s board has considerable overlap in membership with R; common officers.
Little or no overlap.

A’s board members and/or officers are appointed by R, or are subject to approval of R’s board, Read the rest of this entry »

Factors Related to Control Which May Indicate That an Affiliated Organization (A) Should Be Combined with the Reporting Organization (R), if Other Criteria for Combination Are Met (per AICPA SOP 94-3)

SOP 94-3 defines control as “direct or indirect ability to determine the direction of management and policies through ownership, contract, or otherwise.” Read the rest of this entry »

In addition to the above guidance, SFAS 136 also specifies that a transfer of assets to a recipient organization is not a contribution and should be accounted for as an asset by the resource provider and a liability by the recipient organization if one or more of the following conditions exist: Read the rest of this entry »

The following is a summary of the disclosure requirements of SFAS 136 when a not-for-profit organization transfers assets to a recipient organization and specifies itself or an affiliate as the beneficiary: Read the rest of this entry »