News for nonprofits

How to evaluate income tax uncertainties

The Financial Accounting Standards Board (FASB) issued Interpretation No. 48, Accounting for Uncertainty in Income Taxes (FIN 48), last year to clarify FASB Statement No. 109, Accounting for Income Taxes. Nonprofit matters where there may be uncertain tax positions include unrelated business income tax, fundraising and charitable contributions, and compensation agreements where inurement may exist.

To help organizations — including nonprofits — understand what’s involved in recognizing and disclosing uncertain tax positions, FASB has developed a two-step method:

1. Determine if an uncertain tax position exists and is more likely than not (for example, more than 50% likely) sustainable upon review by an authorized taxing authority.

2. Analyze the total cumulative probability that the tax position is more likely than not realizable upon settlement. The agreed position must then be disclosed on the financial statements.

In most circumstances, additional income tax not initially recorded will generate penalties and interest, requiring an accrual for disclosure. •

Baby boomer volunteers want to be challenged

As baby boomers retire, they’re looking for volunteer positions that will offer them some of the same challenges as their careers did.

According to the Corporation for National and Community Service report, Keeping Baby Boomers Volunteering: A Research Brief on Volunteer Retention and Turnover, the retention rate for baby boomer volunteers from the first year to the next is strongly correlated to the type of work they perform. Almost 75% of the volunteers who performed professional or management activities stayed for another year, while only 56% of those who performed general labor tasks continued to volunteer with their main volunteer organization.

To help retain a baby boomer, consider assigning him or her professional tasks, such as coordinating volunteers, conducting strategic planning and handling marketing activities. Tasks that likely won’t endear this generation to a nonprofit include driving, making phone calls and performing construction.

The organization estimates that the number of volunteers over age 65 will increase from 9 million to 13 million by 2020 and rise to 18 million by 2029 — the year that the youngest baby boomers will turn 65 years old. •

Calling all corporate donors

The belief that businesses should help charities only when they’re making money is a misconception, according to a study, Is Doing Good Good for You? Yes, Charitable Contributions Enhance Revenue Growth by New York University and the University of Texas at Dallas. It found that many companies will boost revenues by donating to charity.

For example, companies that serve the public, such as retailers, financial institutions and manufacturers of popular goods, can expect their sales to increase an average of $6 for every new dollar that they allocate to a charitable giving budget.

With these statistics in hand, nonprofits will be better equipped to solicit new corporate donors. •