Transcript AFP Greater New Orleans - Association of Fundraising

Chapter Treasurer Orientation
April 23, 2012
Chapter Treasurer
Responsibilities
• Maintain the chapter’s financial records
• Provide the President and Board with
financial information
• Pay bills and collect funds owed
• Manage the preparation of the budget
Chapter Treasurer
Responsibilities
• Ensure that federal tax filings (U.S. Form 990 – Canadian
Form T2) are prepared and mailed in a timely manner and
that a copy is immediately mailed to IHQ
• Ensure that state/provincial requirements for charities
registration are fulfilled, including initial registration, annual
reports and/or financial documentation that may be
required by law, as well as providing copies of filed
documents to IHQ
• Turn over to the successor all chapter records and/or
property immediately upon completion of term or
resignation prior to completion of term.
Session Overview
Filing requirements
• AFP Accord
• Federal (US 990s and Canada T2s)
• State
Budgeting and Cash Flow Discussion
Financial Reporting Discussion
Filing Requirements
Annual Chapter Accord Checklist
•
•
•
•
•
•
•
•
•
2012 Chapter Leadership Form
2011 Chapter Activity Report
2011 Chapter Program Schedule
Warranty Statement
Conformance to Bylaws
Brand Protection
Proof of active status of the chapter’s corporation
2012 Chapter Affiliation Agreement Review
2011 Financial Information
– 2011 Financial Summary Report - or - Year-end Financial
Statement
• U.S. Chapters Only – IRS Form 990, 990-EZ or 990-N
• Canadian Chapters Only – Form T2 or T2 Short
– Contract for Services
U.S. Federal Filings
• Form 990
– Tax document that tax-exempt nonprofit
organizations file each year with the IRS.
• Form 990T
– If your organization earns more than $1000 of
UBI during the year
• (UBI) unrelated business income
• (income not related to your mission)
• Form 1099
• Documentation of payment to your chapter
administrator, if an independent contractor
Which 990 to file?
Form 990
Larger nonprofits that have –
• gross receipts
>= $200,000
- OR • total assets
>= $500,000
Which 990 to file – cont’d?
Form 990-EZ (Short Form)
Nonprofits that have –
• gross receipts of
< $200,000
- AND • total assets <
< $500,000
Which 990 to file – cont’d?
Electronic Form 990-N (e-Postcard)
Small nonprofits with gross receipts of <= $50,000
(to maintain exempt
status)
Form 990-PF
Private foundations
990 Key Information
• Financial Data
• Statement of Program Service
Accomplishments
• Other IRS Filings and Tax Compliance
• Governance Disclosures
• Compensation of Officers, Directors,
Trustees, Key Employees, Highly
Compensated Employees, and
Independent Contractors
When is the 990 due?
• The 15th day of the 5th month
following the end of the
organization's taxable year. (May
15th for calendar year filers)
• You can file for two automatic
three-month extensions on Form
8868.
What is a T2?
All Canadian nonprofit organizations
(except registered charities)
• required to annually file the T2 form,
titled the Corporation Income Tax
Return, even if they are not paying
taxes.
• filed with the Canada Revenue
Agency.
T2 Versions
• Short Version
If your organization has a permanent location
in only one territory, you can use the short
version of the form.
• Regular Version
If you're active in multiple provinces, you
submit the regular version.
When is the T2 due?
Within six months of the end of
your organization's tax year or
fiscal period.
State Filings
• State Information Return
– E.g. VA Form 500
• State UBIT Return
– Unrelated business income tax
•
•
•
•
Tangible Personal Property Tax Return
Sales & Use Tax Return
Filing for maintenance of current corporate
Filing for solicitation purposes
What is a budget?
• A financial plan that identifies the
financial resources required to achieve
program objectives.
• This plan assists the staff, volunteers
and board in managing programs and
finances during the year.
Why is a budget important?
• Ensures that resources are available for
the organization to attain its mission and
vision
• Provides a framework for organizational
decision making
• Tool for monitoring financial activity
• Help identify gaps between planned
spending and actual expenses
Key steps to develop a budget
• Plan the Process
• Communicate responsibilities,
expectations and deadlines
• Determine program goals and
objectives
• Determine and document assumptions
• Get board agreement on goals and
assumptions
Key steps to develop a budget – cont’d
• Construct budget details
– General & Administrative
– Personnel
– Programs
– Allocations
– Capital needs
• Committee Review
• Final Approval
• Implement and Manage
How do you use it?
• On a monthly basis review actual income
and expenses compared to the budget
• Explain significant variances between
budget and actual
• Use actual results to develop year-end
projected results
• Update and revise the projected results as
changes occur during the year
• Communicate variances and projections to
staff and to the board.
Cash Flow Planning
What is Cash Flow Planning?
Planning and monitoring
monthly inflows and outflows
of cash to determine the net
cash position and maintain
solvency.
Why is it important?
• Plan for periods of tight cash flow
• Provide information on when excess
cash is available for investment
• Assist volunteer leaders to understand
the cash cycle
• You want to avoid the cash trap
Cash Trap?
You can have a positive Statement of
Activities (Profit / Loss) but run out of cash
How does this happen?
• Expenses occur early or evenly
throughout the year.
• Revenue is collected later – e.g. NPD
• Billings are collected later
Key Cash Planning Steps
• Establish an accurate beginning cash
balance across all accounts
• Identify primary sources of cash inflows
and outflows
• Group minor sources in some logical
grouping
• Create a monthly cash model
Key Cash Planning Steps –
cont’d
• Carefully plot the timing of primary
transactions when developing the model
– Ensure that cash related business decisions
coincide with available cash
• Update the Cash Flow Model as actual
information becomes available
Financial Reporting
3 Standard Financial
Statements
• Statement of Financial Position
(Balance Sheet)
• Statement of Activities (Profit & Loss)
• Statement of Cash Flows
Statement of Financial
Position
• Assets
– Current
– Long-term
• Liabilities
– Current
– Long-term
• Net Assets (Assets – Liabilities)
– Net Organization Wealth
Statement of Activities
• Measures performance over a period of
time
• Revenues
• Expenses
• Net Surplus/Deficit (Revenue –
Expenses)
Statement of Activities – cont’d
• Recommendations
– Compare actual results to budget (monthly
and YTD)
– Analyze major variances to budget
•
•
By natural account
By program, cost center or department
– Forecast remaining months
QUESTIONS??
Thank you for all you do for
AFP!