nonprofit newsletter - september/october 2012

September/October 2012

NONPROFIT HOT TOPICS____________________________________________________________

To Staff or Not to Staff? Considerations and Best Practices

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Five Easy Tips to Succeed at Fundraising Using Social Media

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Did You Know? Californians Care...

From Our PartnersACCOUNTING FOR PERSONNEL SERVICES RECEIVED FROM AN AFFILIATE FOR WHICH THE AFFILIATE DOES NOT SEEK COMPENSATION

NONPROFIT NEWSLETTER

ContentsSeptember/October 2012

1 | SingerLewak September/October 2012

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FROM OUR PARTNERS2 ACCOUNT ING FOR PERSONNEL SERV ICES RECE IVED

FROM AN AFF IL IATE FOR WHICH THE AFF IL IATE DOES NOT SEEK COMPENSAT IONIn July, the Financial Standards Accounting Board issued an exposure draft on the subject of accounting for personnel services received by a Nonprofit entity from an Affiliate for which the Affiliate does not seek compensation.

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NONPROFIT HOT TOPICS4 TO S TAFF OR NOT TO S TAFF? CONSIDER AT IONS

AND BEST PR ACT ICESWith many Nonprofits heading into â€œaudit seasonâ€�, this may not be the best time to consider changes to your accounting department staffing. However, it is a great time to observe how well your current group is functioning and if replacements or additions are warranted.

6 F IVE E ASY T IPS TO SUCCEED AT FUNDR AISING USING SOCIAL MEDIAWith social media playing a larger and larger role in our daily lives, many Nonprofits are taking advantage of this free and wide-ranging medium to connect with interested parties and potential donors. The most successful organizations have used social media to control their messages and to influence potential donors using the following key elements.

8 DID YOU KNOW? CALIFORNIANS CARE . . .Did you know that there are over 200,000 Nonprofit and Tax Exempt organizations based in California? Not only do we live in the Golden State, but we clearly take pride in doing good, being philanthropic, and giving back to the communities from coast to coast.

F R O M O U R PA R T N E R S

ACCOUNTING FOR PERSONNEL SERVICES RECEIVED FROM AN AFFILIATE FOR WHICH THE AFFILIATE DOES NOT SEEK COMPENSATIONBY LEWIS SHARPSTONE | [email protected]

In July, the Financial Standards Accounting Board issued an exposure draft on the subject of accounting for personnel services received by a Nonprofit entity from an Affiliate for which the Affiliate does not seek compensa-tion. The purpose of the amend-ments proposed in the exposure draft is to resolve the current diversity in the practice of ac-counting for such contributed services within the stand alone financial statements of the Non-profit receiving such contributed services.

The diversity in practice has come about due to the rules that govern when contributed services should be recognized. Currently ASC 958-605-25 says that con-tributed services should be rec-ognized if they create or enhance a nonfinancial asset (such as property and equipment) or meet all of the following criteria:

1. Require specialized skills. Those provided by accoun-tants, lawyers, doctors teachers and plumbers are amongst those mentioned in the cur-

rent accounting guidance2. Provided by those individuals

possessing those skills3. The services would typically

need to be purchased but for the contribution

It seems that in practice, some Nonprofit entities are recogniz-ing only those personnel services received from an affiliate that meet the criteria, but others are recognizing them all.

Furthermore, some Nonprofit en-tities are recognizing the services at cost to the affiliate providing the services and some are recog-nizing it at fair value received. GAAP (ASC 958-605-30-10) requires the fair value approach.

Finally, there is currently diver-sity in practice as to how Non-

profits are classifying the revenue piece of the transaction when they are presenting a perfor-mance indicator (such as income from operations). Some classify it “above the line” and some put it “below the line”.

The exposure draft is proposing to set up a new category within GAAP, “personnel services received from affiliates” where all the appropriate and related guid-ance can be found.

September/October 2012 SingerLewak | 2

There is currently diversity in practice as to how

Nonprofits are classifying the revenue piece of the

transaction when they are presenting a performance indicator (such as income from operations). Some

classify it “above the line” and some put it “below

the line”


The current proposal is to require all Nonprofits receiving person-nel services from an affiliate to record all those services and to record them at cost to the affili-ate. In addition, for Nonprofits that present a performance indicator, the proposal is for the revenue piece to be shown as an equity transaction, below the line.

There is no proposed effective date at this time.

Things to think about as you absorb the previous material:

If your Nonprofit has affiliated entities:

• Are you allocating costs between the entities in a logi-cal way in accordance with a plan? Have you revisited the plan recently to ensure it still makes sense?

• How are you currently treat-ing the costs which are the specific subject of the exposure draft above? If this exposure draft becomes the final ver-sion, how will it affect your financials

If your Nonprofit does not have affiliated entities:

• Would setting up one of more affiliated entity possibly enhance your ability to pursue your mission? We are seeing

many of our clients setting up affiliated organizations for this reason.

Please feel free to contact one of our Nonprofit team members if you would like to explore further these possible issues.

Welcome to the September 2012 edition of our Nonprofit newsletter.

LEWIS SHARPSTONE CAN BE REACHED AT

[email protected] OR 310.477.3924

TO STAFF OR NOT TO STAFF?CONSIDERATIONS AND BEST PRACTICESBY ROB SCHLENER | [email protected]

With many Nonprofits head-ing into “audit season”, this may not be the best time to consider changes to your accounting de-partment staffing. However, it is a great time to observe how well your current group is functioning and if replacements or additions are warranted.

The first step in hiring account-ing staff, or hiring in general for that matter, is to understand your needs. Too often an Organization will unknowingly take a shortcut and hire for a position they think they need.

DO YOUR HOME WORK

By this I mean, take a step back and review (or make if you do not have one), a formal Organi-zational Chart. This will become the starting point for current and future hiring decisions. From the “Org. Chart”, review or again create (if they don’t exist) posi-tion statements for each function in the accounting department. This will help you determine your true needs, by seeing how closely the position statements align with the current staff’s

skills and workload. Often times we see huge disconnects between the position job descriptions and what the employees are actually working on! The results vary, but don’t be surprised if significant realignment occurs as a result of this exercise. You may find that what you thought you were hir-ing for is not what you need after all. Make the necessary adjust-ments and go into the market-place confident you are looking for the right position now.

WHERE CAN I F IND GOOD CANDIDATES?

If it were that easy, recruiters wouldn’t make a living at find-ing and screening candidates! I always recommend using several

different techniques for sourcing applicants. This gives you a wide variety to choose from with little overlap. Start by asking your auditor, banker, attorney and insurance broker for referrals. The Board of Directors is also a wonderful source for you to draw candidates from. There is noth-ing better than a referral from a known source.

Another good source for can-didates is job board postings. Monster, Craigslist, etc. will yield a large quantity of candidates in a short amount of time. Just be sure to set up a separate email address to capture all the resumes and correspondence, so your pri-mary email box is not inundated.

HOW DO I KNOW I CHOSE THE RIGHT CANDIDATE?

I am a strong advocate for using some sort of accounting skill objective testing when hiring support accounting staff. This is a critical step in the weeding out phase. You want to be sure that the candidate can actually perform at the level he or she has advertised themselves at in their

N O N P R O F I T H O T T O P I C S



resume / application. The test should include some basic assess-ments such as bank statement reconciliations as well as some specific Nonprofit accounting like net asset roll forwards, ac-counting for temporarily restrict-ed net assets, etc.

I’m a firm believer in using the interview process to not only

get to know the candidate, but also to allow the candidate to get to know the Organization. Using the interview as a “two way street” will always result in a more thorough exchange and help alleviate the dreaded “bad hire.” Remember to ask the candidate what he or she knows about the Organization, Non-profit accounting, previous work experience and career goals. Ask open ended questions and get the candidate to speak freely. You are also searching for a good fit for the Organization as well, so make sure you get a good sense the candidate’s ethics mirror the Organization’s mission.

WHERE CAN I GE T HELP?

SingerLewak regularly assists clients in the hiring process. We have developed a data base of candidates that is refreshed

in real time. SingerLewak can assist at a level that makes sense for you: from answering some general questions and screening final candidates you have chosen, all the way to preparing position statements, performing the entire interview process and delivering 3 to 5 appropriate candidates, for your consideration and final hir-ing decision.

If you would like to review and consult with us on your unique situation, I can be reached at [email protected].

ROB SCHLENER CAN BE REACHED AT

[email protected] OR 949.261.8600

Ask open ended questions and get the candidate to speak freely. You are also searching for a good fit for the Organization as well,

so make sure you get a good sense the candidate’s

ethics mirror the Organization’s mission.

FIVE EASY TIPS TO SUCCEED AT FUNDRAISING USING SOCIAL MEDIABY JASON LEO | SENIOR [email protected]

With social media playing a larger and larger role in our daily lives, many Nonprofits are taking advantage of this free and wide-ranging medium to connect with interested parties and potential donors. The most successful orga-nizations have used social media to control their messages and to influence potential donors using the following key elements:

1. Provide an emotional connec-tion with the organization’s mission. A good way to do this is to provide a picture of

the organization’s mission at work right on the front of the webpage. Having an impact-ful picture as one of the first

things a user sees is an excel-lent way to leave a great first impression and to convey the organization’s mission. You should also avoid cluttering the home page with volumi-nous text and numerous links, messages, and functions. It can be confusing and leaves the user with a mixed mes-sage.

2. Invest the time and effort to design and provide a web-site or other social platform of quality. Providing a great user experience is extremely

important in creating a last-ing impression and to obtain multiple viewings.

•Time should be spent to create a webpage that is im-pactful on its first viewing.

•Develop great content that will keep users engaged.

•Ensure the webpage is easy to find and navigate. You don’t want a webpage that is confusing and generally hard to browse through. Avoid cluttering the home page with voluminous text and numerous links, mes-sages, and functions. Struc-ture the webpage so that it can be navigated intuitively, and it should be particularly easy for users to find and use the donation page.

•The webpage should be capable of being linked and have the ability to link with other social media platforms such as Facebook, Twitter, etc.

3. Format the webpage to be easy to use on mobile devices such as smart phones and


Having an impactful picture as one of the first things a user sees is an excellent way to leave a great first impression

and to convey the organization’s mission



tablets. As these items become the device of choice for more and more donors, it would be wise to provide a platform that functions well on them. The Organization should also be on the lookout for other trends in order to stay fresh and relevant to donors.

4. Include testimonials from in-dividuals who have benefited from the Nonprofit’s work. Provide a means for users or donors to share their positive experiences. Be responsive to requests made by users or do-nors. Offering this forum for communication will provide credibility to the nonprofit’s message, show that it is pro-active and in-tune with its constituents’ needs.

5. Acknowledge those who have helped the organization and who continue to help the or-ganization. A personal thank you should always follow every donation received, and an acknowledgement on the web-

page would be a great means to give credit where it’s due.

(Credits: Andresen, Katya. “Supersize My Online Savvy: Surefire Steps to Fundraising & Social Success.” Guidestar USA, Inc. [Webinar]. 16 May. 2012.)

For additional tips on fundraising using social media, I can be reached at [email protected].

Include testimonials from individuals who have benefited from

the Nonprofit’s work. Provide a means for users or donors to share their positive experiences. Be responsive to requests

made by users or donors.JASON LEO CAN BE

REACHED AT [email protected]

OR 310.477.3924


DID YOU KNOW? CALIFORNIANS CARE...BY RONIT KOREN | DIRECTOR OF [email protected]

Did you know that there are over 200,000 Nonprofit and Tax Exempt organizations based in California? Not only do we live in the Golden State, but we clearly take pride in doing good, being philanthropic, and giving back to the communities from coast to coast. Our fundraising and giving efforts clearly don’t just help out our residents, but also people and causes in need, to better our lives and conditions at home and around the globe.

According to TaxEmptWorld.com, as of August 21, 2012, the statistics are as follows:

If you would like to see the the full list with the number of Organizations, Total Reported Income Amount and Total Reported Asset amount, by County, you can get the list at www.taxexemptworld.com.


TOTAL F INANCIAL DE ALS DOLL AR AMOUNT

Total Asset Amount Reported by Organizations $572,939,533,193

Total Income Amount Reported by Orgs $310,129,651,578

Highest Asset Amount Reported $71,416,615,972

Average Asset Amount (with Assets Greater than Zero) $7,216,140

Highest Income Amount Reported $21,509,755,590

Average Income Amount Reported (with Income Greater than Zero) $4,040,748

CL ASSIF ICAT ION TOTALS FOR CALIFORNIA NONPROF IT/TA X E XEMP T ORGANIZ AT IONS QUANT IT Y

Charitable Organization 501 (c ) (3) 97,738

Educational Organization 501 (c ) (3) 29,685

Religious Organization 501 (c ) (3) 27,522

SINCE 1959

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THE SKILLS YOU NEED. THE SERVICE YOU EXPECT.

SingerLewak is dedicated to serving the unique Audit, Consulting and Tax needs of Nonprofits.

■ Social Service Organizations ■ Educational Institutions ■ Religious Organizations ■ The Arts

■ Foundations ■ Associations ■ Healthcare and Clinics ■ NGOs

949.261.8600 | www.SingerLewak.com

LOS ANGELES ORANGE COUNTY WOODLAND HILLS MONTEREY PARK SAN DIEGO SILICON VALLEY SAN FRANCISCO

PROUDLY HELPING SOUTHERN CALIFORNIA NONPROFITS ACHIEVE THEIR MISSIONS

FOR OVER 50 YEARS

WEUNDERSTAND

LE WIS SHARPS TONE [email protected] | 310.477.3924

JEFF HOLT [email protected] | 310.477.3924

S TE VE CAR TER [email protected] | 408.294.3924

ROB SCHLENER [email protected] | 949.261.8600

L IOR TEMKIN [email protected] | 310.477.3924

SingerLewak is a leading regional accounting services firm in California with offices in Los Angeles, Orange County, Wood-land Hills, Monterey Park, San Diego, Silicon Valley and San Francisco. Serving California since 1959, SingerLewak has established a reputation for excellence as professionals with expertise in the Accounting and Management Consulting industry. Providing the services of a large firm with a blended environment of practices, industry specializations and partic-ular attention to hands-on service, SingerLewak continues to demonstrate leadership and industry growth year-over-year.

We are nationally recognized as active community and profes-sional services partners, working among many sectors of the business world. Our core services deliver results whether it’s auditing, accounting, entrepreneurial business services, tax preparation, business management, SEC filings, transactions, enterprise risk management, forensic accounting, business valuation, litigation support, or consulting.

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310.477.3924 www.SingerLewak.com

SINCE 1959

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WE UNDERSTAND.THE SKILLS YOU NEED. THE SERVICE YOU EXPECT.WE UNDERSTAND.THE SKILLS YOU NEED. THE SERVICE YOU EXPECT.

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nonprofit newsletter - september/october 2012

Documents

personnel services

contributed services

subject of accounting

exposure draft

social mediawith social

nonprofit entity

best time

accounting department