FRESNO GMS BRIEFING - 3 FEBRUARY 2011
BY WES LINGERFELT
Requested by good friend and Digging Partner Gerry Wells
To the FGMS Board of Directors
Subjects to be covered:
State and Federal Taxes
The Internet
Website Considerations
Raffles
First, who am I?
Current Treasurer - Orcutt Mineral Society, Inc.
Former Treasurer – CFMS 1997 – 98
CFMS Director Since 1986
Former CFMS Endowment Fund Chair
Former CFMS Internet & PLAC Committee Member
Current Dealer Chair for OMS Gem Show
Webmaster for 2 websites ( www.omsinc.org &
www.sphereheaven.com)
Current Judge for AFMS Annual Website Contest
Member National Rockhound Hall of Fame - 2002
Staying abreast of Federal & State Non-profit rules is
imperative
Annual Electronic Filing Requirement for Small Exempt
Organizations — IRS Form 990-N (e-Postcard)
Exempt Organizations - Public Disclosure Requirements in
General
Exempt Organizations - Disclosures Required
Exempt Organizations Public Disclosure - Penalties for
Noncompliance
Exempt Organizations Public Disclosure - Charitable
Contribution Disclosures
Exemption Requirements - Section 501(c)(3) Organizations
(See Attached Text)
Organizations described in section 501(c)(3) are commonly
referred to as charitable organizations. Organizations
described in section 501(c)(3), other than testing for public
safety organizations, are eligible to receive tax-deductible
contributions in accordance with IRS Code section 170.
Section 501(c)(3) organizations are restricted in how much
political and legislative (lobbying) activities they may
conduct.
501(c)(4)
see also: Citizens United v. Federal Election Commission
501(c)(4) organizations are generally civic leagues and
other corporations operated exclusively for the promotion
of social welfare, or local associations of employees with
membership limited to a designated company or people in
a particular municipality or neighborhood, and with net
earnings devoted exclusively to charitable, educational, or
recreational purposes. Unlike 501(c)(3) organizations,
501(c)(4) organizations may lobby for legislation; they may
also participate in political campaigns and elections, as
long as campaigning is not the organization's primary
purpose.
Substantiating Charitable Contributions
A charitable organization must provide a written
disclosure statement to donors of a quid pro quo
contribution in excess of $75. A quid pro quo
contribution is a payment made to a charity by a donor
partly as a contribution and partly for goods or services
provided to the donor by the charity.
A penalty is imposed on a charity that does not make
the required disclosure in connection with a quid pro
quo contribution of more than $75. The penalty is $10
per contribution, not to exceed $5,000 per fund-raising
event or mailing. The charity can avoid the penalty if it
can show that the failure was due to reasonable cause.
Written Record of Charitable Contribution
A donor may not claim a deduction for any contribution
of cash, a check or other monetary gift made on or after
January 1, 2007, unless the donor maintains a record of
the contribution in the form of either a bank record (such
as a cancelled check) or a written communication from
the charity (such as a receipt or a letter) showing the
name of the charity, the date of the contribution, and the
amount of the contribution.
Any correspondence generated concerning this topic should
be approved and released by the Board of Directors only.
CALIFORNIA STATE TAX REQUIREMENTS
199N California e-Postcard
This new requirement applies to account
periods beginning on or after January 1, 2010.
Tax-exempt organizations that normally have
annual gross receipts of $25,000 or less must
electronically submit information annually. For
more information, see 199N filing
requirements.
Organizations not eligible to submit an ePostcard must complete and file a paper Form
199.
Filing Requirements - FTB 199N, Annual
Electronic Filing Requirement for Small TaxExempt Organizations (California e-Postcard)
(See Attached Text)
ACTIVITIES IN YEARLY ACCOUNTING CYCLE:
Financial Statements and Analysis
Financial Statements
(See Attached Text)
Monthly Reports
Statement of Position (Balance Sheet)
What is our financial health? Can we pay our bills?
Statement of Activities (consolidated) showing budget to actual
information
What has been our overall financial performance this month and
to date?
Departmental Income and Expense Statement showing budget
to actual information
How does actual financial experience compare with the budget?
Is specific action called for, such as limiting expenses in certain
areas? Does experience indicate a change in the budget is
appropriate?
Narrative report including tax and financial highlights, important
grants received, recommendations for short term loans, or
other means of managing cash flow
An executive summary of financial highlights, analysis, and
concerns.
SAMPLE TREASURER’S REPORT
An accounting software program is a must to maintain
appropriate records for an organization.
There are several available such as Quicken, Microsoft
Money and Microsoft Excel spread sheet.
Data must be accurately and frequently entered and then
backed up for archiving. Special training may be required
to keep accounts current and accessible. Do not allocate
only one person to have access to the computer system
and files.
A Club owned computer system under adequate security
should be considered as a useful tool for maintaining the
organizations books and records.
Annual Reports
Annual Federal forms, including 990 and
Schedule A; State Reports
MUST BE FILED WITH 5 MONTHS OF
CLOSURE OF ACCOUNTING CYCLE
ANALYSIS OF FASB 117
(Financial Accounting Standards Board)
"FINANCIAL STATEMENTS OF NOT-FOR-PROFIT
ORGANIZATIONS"
(SEE ATTACHED TEXT)
Non-Profit Audit Requirements |
An audit reviews and verifies the financial books of an
organization. Audits are most often associated with the IRS and
taxes, but nonprofits often conduct audits through a trained
accountant or CPA. An audit verifies deposits with checks and
deposit slips, verifies receipts and expense reimbursements,
and reconciles bank statements. The audit provides a way for a
nonprofit to maintain transparency in its spending methods and
use of donations.
Although there are few laws or regulations that
directly state how nonprofit organizations must
operate their finances internally, there are many that
have a strong indirect impact. These indirect
influences include IRS reporting requirements and
the accounting standards most funding agencies
require supported organizations to follow. In
practical terms, these "recommended" standards all
but demand certain accounting and other financial
practices be followed by nearly all nonprofit
organizations.
Non-Profit Audit Requirements
 Non-profit organizations that expend $500,000 or more in a year in Federal
awards must have an audit conducted for that year in accordance with the provisions
of OMB Circular A-133.
A-133 audits are performed by independent public accounting firms engaged by the
Non-profit organizations.
Costs for A-133 audits are borne by the Non-profit organizations but are allowable as
charges to grant projects; they may be considered either direct costs or allocated
indirect costs as determined by the Federal cost principles.
Non-profit organizations that expend less than $500,000 in a year in Federal
awards are not required to have an A-133 audit for that year.
There are three major bodies that issue standards for nonprofit organization
financial accounting, and some supplementary guidelines that are commonly
referenced, which regulators typically relay on for determining if an NPO is
conducting its finances responsibly. The standards bodies are the Financial
Accounting Standards Board (FASB), the American Institute of Certified Public
Accountants (AICPA), and the U.S. Federal Office of Management and Budget
(OMB).
THE INTERNET
Is a very useful tool (As the CFMS has discovered)
Allows a club to present itself to the world.
Has many inherent dangers especially for kids.
A Internet policy should be established & published.
The club should own the domain name. (Do not use a
personal account for hosting your site)
The Internet Service Provider (ISP) should be well known,
reliable and reasonably priced.
A web site will become more necessary
over time so protect it just as you would
your bank account.
Don’t rely on just one person to build/run
it as he/she may become unavailable for
all sorts of reasons.
WEB SITE CONSIDERATIONS
The club Web site serves several functions. Three of the major
functions of the Web site are:
(1) Attract new members
(2) Provide member information
(3) Public advertising of club activities such as shows. This
item is a subset of the higher and more important question of
"Does the Web site assist in fulfilling the mission of the club?"
Advertising is only one of the many functional capabilities to be
assigned to the Web site. Most clubs have the mission of
educating the public, and they find that providing educational
materials and links to educational sites for geologic and Earth
Science information is a good use for the Web site.
(See attached Web site Contest guidelines)
Search engines don't just find your site by accident-they need to know you
exist. At the very least, submit your site to the "big three": Google, Yahoo! and
Bing (owned by Microsoft). Key links:· www.google.com/addurl/ ·
http://search.yahoo.com/info/submit.html - www.bing.com/webmaster/Submit
SitePage.aspx
Another key place to submit your site is www.dmoz.org/help/submit.html. This
is an independent, nonprofit Web-monitoring project that links to Goggle's
directory. When you submit your site to dmoz, it will be checked by a real
human being-now there's a novelty. The downside is that human beings,
especially volunteers, take their time, so it may be a while before you reap the
rewards.
Does your site have a sitemap? It's an often-neglected file that gives search
engines a list of your website's contents. The good news is that you don't even
have to know how to make a map. Several sites, such as www.xmlsitemaps.com, will generate one for you. Again, you'll need to submit your
sitemap to search engines.
Keywords are hidden within the code of your website, but they
should cover any search terms that your visitors might use.
It is worth getting them right. Goggle's search-based keyword
tool (search "keyword tool" at www.google.com). can help.
Ironically, Google doesn't take any account of keywords. Other
search engines do, though.
Meta tags are optional HTML coding elements that provide
information about a Web page. Your description meta tag
is hidden from view, but it's a vital smoke signal for search
engines. It's your chance to describe succinctly what your
website is about. So keep it short and sweet, but remember that
each page of your website can-and should-have a separate
description.
·
In contrast, a more visible device is the headings
you use on your website. These are essential reading for
search-engine robots. Make them relevant. Better still,
make them feature your site's keywords.
No matter how good your site looks, it's wasted if your
online audience is too small.
RAFFLES
A Comprehensive Study of California Non-Profit Raffle
Rules is provided in a separate presentation titled
Raffles Rules Defined consisting of 50 Power Point slides.
References:
http://www.muridae.com/nporegulation/accounting.html#state_reporting
http://oag.ca.gov/charities
http://www.ftb.ca.gov/
http://www.boe.ca.gov/
http://www.irs.gov/
The internet is a vast reservoir of information and most questions concerning
almost any topic can be found by diligent search of the net.
Should anyone have question or need more information I can be contacted as
noted below.
Cell = 805-710-1983
Home = 805-929-3788 FAX = 805-929-3768
E-mail = Rocks4u@prodigy.net