August 2017

Donor Advised Funds: Can They Be Leveraged to Benefit Your Charity?

Donor advised funds (“DAFs”) continue to be popular with total charitable assets at over $80 billion at the end of 2016.  Competition for charitable dollars continues to be an ongoing struggle for all nonprofits;  the growth of DAFs provides unique challenges and opportunities for charities.  The challenge is that with increased giving by donors to DAFs, there are simply less donor dollars available to be given directly to charities.  The opportunities are that DAFs (especially larger, well-established DAFs) accept contributions of nonmarketable assets, including nonpublicly traded stock, real estate, bitcoin, etc.  For many charities, receiving gifts of nonmarketable assets presents challenges, among which is having the resources to liquidate those assets to cash, since most charities would not want to carry these nonmarketable assets on their books. 
Prospective donors may not be aware of this option, and a charity can provide a service to both a potential donor and themselves, by engaging in a conversation with their donors about this potential giving opportunity.  For example, let’s say that a donor has shares of stock in a nonpublicly traded company that has appreciated in value. The donor could receive a substantial tax benefit by donating the shares.  However, the donor wishing to give to a smaller charity may not consider making a gift of these shares because the charity does not have the infrastructure to process this gift.  The charity can make the donor aware that many DAFs can accept the gift of stock.  After making the gift of the shares the donor can request the DAF to make a cash gift to the charity. 
Charities may be well served to speak with their donors about utilizing a DAF to facilitate a gift of nonmarketable assets.

8 tips to determine your nonprofit’s year-end

Not-for-profits have a luxury that most other individuals and businesses do not. They’re allowed to select their fiscal year-ends for IRS purposes. Partnerships, sole proprietorships, S corporations and other legal structures, with limited exceptions, may not. These groups generally are required to use calendar year-ends for tax filings. Read on to find out what a not-for-profit should consider when choosing a year-end date.  

Tips from a not-for-profit standard early adopter

Not-for-profits face their most significant financial reporting changes in more than 20 years as they implement the Financial Accounting Standards Board's new standard. This article from the Journal of Accountancy explains how a community foundation with $2.2 billion in assets handled the changes.  
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