GEORGE JOHNSON & COMPANY
Dear Clients and Friends,
Welcome to the summer issue of the GJC Advisor. Today’s nonprofit organizations are faced with evolving challenges. In this issue, we focus on three critical privacy issues; board governance; and compliance with the substantiation requirements for charitable donations.
If you have any questions regarding this issue of the GJC Advisor Nonprofit & Foundation Update, please feel free to contact us. At GJC, we are committed to assist nonprofit clients in meeting their compliance obligations and contribute to their organization’s long-term success.
Three Critical Privacy Issues Every Nonprofit Entity Should Consider
Most nonprofit organizations collect, use and store “personal information” of donors and staff. There are well over 200 laws, just in the United States, that mandate protections of this information and apply, in whole or in part, to nonprofits. All nonprofit entities should understand the requirements that TCPA, GDPR and U.S. state data breach/protection laws impose upon their organizations.
Just a few years ago, many entities were largely unaware of the impact data privacy and cybersecurity could have on their organization overall. Most categorized these issues as belonging to the IT or HR departments. Now, data-privacy class-action litigation has erupted and data breach announcements dominate the headlines. Currently, in almost every survey conducted of boards and senior management, data issues rank as one of their three top concerns, if not their single greatest concern. Nonprofit entities would be well advised to tend to this important area which is often overlooked until it becomes a crisis.
Board Governance: A Board Member’s Perspective
A nonprofit’s governing body is integral to the success and effectiveness of the organization. Boards play an instrumental role in setting strategy and overseeing the use of an organization’s assets to carry out its mission. The overall strength of a nonprofit board depends on the contributions of each individual board and committee member. That said, what exactly does it take to excel as a board member?
In a recent BDO KNOWLEDGE Nonprofit & Education webinar, a discussion on board governance was held with panelists Michael Forster, CFO of The Woodrow Wilson International Center for Scholars, and Thomas Waite, CFO of The Humane Society of the United States. Over the course of our conversation, Mike and Tom drew upon their in-depth experiences with nonprofit boards-serving as board members themselves and as liaisons in a management role.
This article highlights insights from the panelists into board member responsibilities and how nonprofits can position their boards for success.
IRS Focused on Charitable Donation Substantiation Compliance
Recent Tax Court cases have demonstrated the Internal Revenue Service’s (IRS) increase in strict compliance with the substantiation requirements for charitable donations. For example, a $64.5 million charitable contribution was recently disallowed because there was no written acknowledgment from the recipient at the time the return was filed. After the donation was made and prior to the return filing, the charity sent the taxpayer a letter acknowledging receipt of a donated facade easement. Unfortunately, this letter did not state whether the charity had provided any goods or services to the taxpayer, or whether the charity had otherwise given the taxpayer anything of value, in exchange for the easement. The taxpayer did include a copy of the appraisal report for the amount of the donation, a copy of the charity’s letter, and Form 8283, Noncash Charitable Contributions, executed by the appraiser and by a representative of the charity with the return. The only item missing was the statement “No goods or services were provided in exchange for your donation” on the acknowledgement letter. (15 West 17th Street LLC v. Commissioner, 147 T.C. No 19, December 22, 2016). These eleven missing words caused the disallowance of the $64.5 million contribution. Only $5.8 million per missing word.
GJC would like to congratulate its team members, David Esshaki, Manager and Eric Bonk, Staff Accountant, whom were recent recipients of the GJC Five-Star Award.
The goal of a five-star corporate culture is to provide the highest level of communication and service both internally among team members, and externally to its valued clients. Additionally, GJC’s Five-Star Award suggests that the way we treat each other, our internal clients, translates into how we treat our external clients. This continues to be a philosophy that our firm fully embraces.
Congratulations David and Eric for your hard work and team dedication!
Managing Partner, Anthony McCree recently contributed to Crain’s Detroit Business.
The article focuses on new accounting rules for Nonprofit Organizations to take effect in December 2017.
Read the full article here!
If you have any questions, please feel free to contact us.
We hope that the contents of this issue of the GJC Advisor will provide you with valuable information. As always, if you have any questions or comments, please do not hesitate to share them with our team members.
This general information should not be acted upon without first determining its application to your specific situation. For further details on any article, please contact us.