Nonprofit
consulting
At Tally Up Consulting, we understand the importance of accurate and detailed financial reporting for nonprofits. With over 8 years of experience in nonprofit accounting, we provide in-person consultations to understand your organization's operations and analysis your financials. Working alongside your internal accountant, we ensure precise tracking of restricted funds, appropriate allocation of functional expenses, and assistance with adjusting journal entries.
What is a Nonprofit?
A non-profit is an entity organized and operated, with the primary goal of serving public or societal interests. Many non-profits are considered tax-exempt but only a 501©3 may have their donations consider tax exempt.
Difference in nonprofit and not-for-profit.
Non-profits are tax-exempt organizations, whereas not-for-profits may not be tax-exempt.
Not-for-profits utilize income generated from business activities to improve their operations.
5 types of nonprofits:
Charitable Organizations – must receive income from public.
Private foundations – receive a large donation from an individual or business and makes grants to others.
Churches and Religious Organizations
Political Organizations
Business leagues and chambers of commerce – 501© 6 – chambers of commerce, economic club, promoting interest of specific industries or businesses.
Social clubs – Support is provided by income paid by members.
Type of entity:
Trust – Trustees are someone that holds assets but still provide the mission with said assets per the organizing document. Trustees are held liable if something happens.
Corporation
Association
Board Members
Must have at least three board members.
Encourage that board members are not family and friends.
Value your mission
Have connection and start-up funds to donate if there is a down period.
Diversify different fields.
Things to Consider:
Funding – you need to determine where your income will derive from.
Expenses – Determine your annual expenses.
Board Members – Consider the board members you would like to have and how they could assist in your fundraising efforts.
Fundraising – Consider a fundraising event and research vendors that could assist.
Assets – All assets, must be in the nonprofit name
Documents needed to start a nonprofit:
Articles of Incorporation
Organizing Document
501(c)3 tax-exempt status
Create bylaws
Conflict of interest policy
Reimbursement policy
Revenue
Revenue is pivotal for the success of every organization.
Nonprofit organizations are not limited to recognizing just cash donations and cash grants as revenue. Nonprofits can also identify various revenues. To learn more set up a complimentary consultation.
Nonprofit organizations track expenses differently than for profits. These expenses are split into three categories called functional expenses.
Functional expenses
Management & General
Management and general expenses are paid for the daily operations of the nonprofit.
Commonly categorized management and general expenses are:
Salary and wages
Insurance
Rent
License and taxes
Depreceiation
Professional services
Supplies
Other administrative expenses
Program
Service
Program service expenses are paid to foster the nonprofit mission.
Commonly categorized program expenses are:
Donations to other nonprofits with tax-exempt status
Scholarships
Gifts
Educational materials
Meal provisions
Other program and service expenses
Fundraising
Funding expenses are paid to solicit financial support such as gifts, grants, or other monetary support.
Commonly categorized fundraising expenses are:
Fundraising events
Marketing campaigns for donations
Salaries of employees working on fundraising.
