Not-for-Profit Newsletter Winter 2012

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 stockman kast & ryan co.

SKR+Co Nonprofit Newsletter
Winter 2012

It's all political – or is it?
What nonprofits can and can't do in campaigns

With election season heating up, not-for-profits must take care not to stray into prohibited political activity that could jeopardize their tax-exempt status. The IRS has addressed the acceptability of several common activities. This article discusses the dividing lines separating partisan vs. nonpartisan activities in areas such as voter registration drives, candidate appearances and business activities. A sidebar shows how tax law distinguishes between politics involving candidates and lobbying involving legislation; certain involvement is permissible.

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The lure of the for-profit subsidiary

In the wake of a severe recession — with a drop in public grants and private donations — for-profit endeavors can have a magnetic appeal as nonprofit survivors look for new sources of revenue. But there are a number of factors that a nonprofit should consider before taking on the significant cost and responsibility of operating a for-profit company. This article lists the incentives and drawbacks, while a sidebar lists two key actions that nonprofit executives have taken in successfully creating a for-profit subsidiary.


Safety net essentials
Now more than ever, you need operating reserves

One study of charities found that 57% of the organizations surveyed had insufficient operating reserves to cover three months of expenses — the minimum level many experts consider necessary to maintain financial stability. Forgoing reserves leaves nonprofits vulnerable to rapid or unexpected drops in revenue or jumps in expenses. This article explains why it’s necessary to have sufficient operating reserves, and offers questions a nonprofit should ask itself when trying to determine what is sufficient.

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Newsbit: Salvation Army goes digital 

The Salvation Army last holiday season began shifting to digital donations at their famous red kettles. The charity was testing the use of Square, a mobile payments tool that allows anyone to accept credit card payments via mobile devices. In an effort to keep up with tech-savvy donors and changing technology, the organization deployed Square at 10 red kettle locations each in Chicago, Dallas, New York and San Francisco.
Bell ringers in the test cities carried Android™ smartphones donated by Sprint Nextel that were equipped with Square's postage-stamp-size card reader and two apps, one from Square and one from the Salvation Army. (Square also works on iPhone® and iPad® devices.) Donors swiped their credit cards and signed on the phone itself, just as they would at any credit card processing terminal, and the money was deposited directly into the Salvation Army's account.
The New York Times reported that other nonprofits and individual fundraisers also have begun to use the Square technology. A Girl Scout troop in Silicon Valley, for example, used it last year to sell about 400 boxes of cookies at the workplace of one troop member's father.

Meet our Nonprofit Specialists

Steve Hochstetter, CPA, CVA, Audit Partner






Jeff Talus, CPA,
Tax Partner

Doreen Merz, CPA,
Tax Manager

Federal Disclosure and Colorado Registration Requirements

As a resource for you, we have added a page on our website addressing the federal disclosure requirements of nonprofit organizations as well as the registration requirements of the state of Colorado. Click Here to go to the web page.

Form 990 and Instructions

Another resource available on our website is a link to 2011 Form 990 and its instructions. Click Here to go to the web page, then scroll down to the heading "Exempt Organization Forms."

For more information about any of the articles here or our nonprofit services, please contact us at (719) 630-1186 or through our Secure Email.

SKR+CO Expert
Steve Hochstetter, CPA/ABV®, CFF™, CVA, Audit Partner
Steve has been in public accounting since 1983, with significant experience serving nonprofit organizations, healthcare organizations, governmental entities, and small to mid-size businesses.