GEORGE JOHNSON & COMPANY
Dear Clients and Friends,
Welcome to the spring issue of the GJC Advisor. Today’s nonprofit organizations are faced with evolving challenges. At GJC, we are committed to assist nonprofit clients in meeting their compliance obligations and contribute to their organization’s long-term success.
A Deeper Dive Into ASU 2016-14
Our December Issue of the GJC Advisor Nonprofit & Foundations Update outlined the financial reporting areas for nonprofits that will be impacted by the Financial Accounting Standards Board (FASB)
Accounting Standards Update (ASU) 2016-14, Not for-Profit Entities (Topic 958): Presentation of Financial Statements of Not-for-Profit Entities.
As organizations look to implement ASU 2014-16 and meet its requirements, they must account for how these changes may impact how they collect information. This article will highlight three of these areas:
• Investment Expenses
• Liquidity and Availability Disclosures
• Internal Net Asset Designations
What’s the Difference Between Nonprofit and For-Profit Accounting, and How Does it Impact the Fiduciary Duties of Board Members?
There are many opinions on what the fiduciary responsibilities of nonprofit board members are. The National Council for Nonprofits discusses that boards should:
a) Take care of the nonprofit by ensuring prudent use of all assets, including facility, people and goodwill; and provide oversight for all activities that advance the nonprofit’s effectiveness and sustainability. (Legal term: “Duty of due care”)
b) Make decisions in the best interest of the nonprofit corporation; not in his or her selfinterest. (Legal term: “Duty of loyalty”) George Johnson to the left of Mrs. Ida Austin (seated), along with board members of WSU School of Business
c) Ensure that the nonprofit obeys applicable laws and acts in accordance with ethical practices; that the nonprofit adheres to its stated corporate purposes, and that its activities advance its mission. (Legal term: “Duty of obedience”)
In light of several nonprofit failures in recent years, it has become even more vital for members of nonprofit boards to exercise the duty of due care as described above by understanding how their organization communicates its financial results and operations.
Members of nonprofit boards tend to come from the for-profit world, where financial reporting is quite different.
Below, we have highlighted some of the financial reporting differences between nonprofit and for-profit entities to help board members understand and fulfill their fiduciary responsibilities.
George Johnson to the left of Mrs. Ida Austin (seated), along with board members of WSU School of Business
George Johnson delivers Keynote Address at the Richard H. Austin
Lecture Series for Accounting Excellence at the
“Making A Difference” Luncheon
The Richard H. Austin Fund for Accounting Excellence was established at Wayne State University in 1989. The purpose is to increase significantly the number of African Americans who achieve excellence in the accounting profession. The primary objective of the fund is to identify meritorious students in need of financial support to continue their studies.
George is actively involved in the Wayne State University Richard H. Scholarship Fund. In his address at the luncheon in February, George spoke of his history with Richard H. Austin. In 1971, George established his own firm, George Johnson & Company, formed by the merger of two local firms including that of then Michigan Secretary of State, Richard H. Austin: Austin, Washington, and Davenport.
Although financial need is a consideration for the fund, students who exhibit attributes symbolized by Richard H. Austin, are given preference. He was a figure of integrity, commitment, leadership,
community involvement, concern for other people, personal drive and academic achievement.
George Johnson established GJC 45 years ago in the City of Detroit. Since the firm’s inception, commitment to the community has been a central component of our mission. We consistently identify and fulfill avenues to help fellow Metro Detroiters. From our team volunteering in soup kitchens to celebrating Martin Luther King, Jr. Day as an opportunity to serve, we will continue to seek outlets to lend our collective time and talents to enhancing our community.
In January of this year, to honor Martin Luther King, Jr., our team spent the day volunteering at Gleaners Community Food Bank. Alongside serving with several other companies in the Detroit Metropolitan area, 3,406 pounds of food were managed! With the support of the community, Gleaners Food Bank distributes more than 45 million pounds of food to our hungry neighbors in southeastern Michigan, including the 40% of recipients who are children.
The GJC team stops for a photo while working at Gleaners Community Food Bank
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.