EITF issues rule on affiliate personnel services
The Financial Accounting Standards Board’s Emerging Issues Task Force (EITF) has issued a new rule that addresses the proper accounting for services received from personnel of an affiliate for which the affiliate doesn’t seek compensation (EITF Issue 12-B).
Currently, the recipient organization only recognizes contributed services from an affiliate if the services either create or enhance nonfinancial assets, or require specialized skills and would typically need to be purchased if they hadn’t been donated. Such contributed services are recognized at fair value.
Under the new standard, a nonprofit generally should recognize personnel services that are performed by an affiliate’s employees at the affiliate’s cost of such services, rather than at fair value. The cost components would depend on the nature and type of service provided, but, at a minimum, costs should include all direct personnel costs (for example, compensation and payroll-related fringe benefits) incurred by the affiliate. The guidance will be effective for fiscal years beginning after June 15, 2014.
Who gives big gifts?
A new study sponsored by international consultants CCS, through its William B. Hanrahan Fellowship at the Lilly Family School of Philanthropy at Indiana University, has found that the majority of charitable contributions of $1 million or more come from local donors. About 60% come from donors from the same state or geographic region as the recipient’s and about half of all publicly announced gifts of this size (47% of the total number of gifts and 52% of the total dollar amount) come from donors living in the same state.
Health nonprofits; arts, culture and humanities organizations; higher education institutions; foundations; and government agencies received more than half of their million-dollar-plus gifts from donors in the same state.
Nonprofits may want to focus their efforts on cultivating relationships with donors invested in their local communities — and who have the financial capacity to make significant gifts.
Coalition launches charitable deduction website
The Charitable Giving Coalition has launched a new website designed to provide user-friendly, accessible information about the vital role of charitable giving in U.S. communities. Formed in 2009, the coalition is dedicated to preserving the tax deduction for those who give to charities. The website (http://protectgiving.org) includes information about the policy debate surrounding the charitable deduction, the effect on the charitable sector, and the coalition and its membership, which includes organizations ranging from the American Red Cross to United Way Worldwide.