Nonprofitability Fall 2015
Newsbits
FASB proposes accounting change for nonprofits
The Financial Accounting Standards Board (FASB) has issued a proposed Accounting Standards Update (ASU) which would significantly change a 20-year-old financial reporting model. ASU No. 2015-230, Not-for-Profit Entities (Topic 958) and Health Care Entities (Topic 954): Presentation of Financial Statements of Not-for-Profit Entities, is intended to simplify the current net asset classification requirements and the presentation of information in nonprofits’ financial statements and footnotes about liquidity, financial performance and cash flows. The ASU wouldn’t change the information being reported, but would require it to be presented in a more consistent manner that would be easier for users of financial statements to understand.
Among other changes, the proposed update would eliminate the requirement that nonprofits present temporarily restricted assets and permanently restricted net assets — and transactions in each of those asset classes — separately. Instead, a nonprofit would report amounts for “net assets with donor restrictions” and “net assets without donor restrictions,” along with the currently required amount for total net assets.
The proposed update also would require changes to the reporting of operating activities on the statements of activities, with investment income generally not included in the results of operations. The proposed presentation would be more consistent with the method many nonprofits currently use to track budget vs. actual results. In another change, nonprofits would be required to present on their statements of activities a uniform measure of operations — reflecting their mission and the availability of funds.
Additionally, nonprofits would be required to present their operating cash flows using the direct method, which provides more meaningful information to users than the currently allowed indirect method. And nonprofits would need to provide enhanced disclosures on several matters, including liquidity of assets and operating expenses by nature and function.
This fall, the FASB is expected to start deliberations on comments it has received, with final guidance taking effect within one to two years.
Spam filters cost nonprofits $15,000 annually
The 2015 Nonprofit Email Deliverability Study found that, although donations made in response to emails accounted for about a third of online fundraising revenue in 2013, one in eight emails never reaches an inbox, instead being marked as spam. As a result, according to the study, a nonprofit loses on average almost $15,000 each year. The study — conducted by EveryAction, a technology solution provider that helps nonprofits organize fundraising campaigns, analyzed 55 national nonprofits with mailing lists of at least 100,000. They concluded that nonprofits could raise their email fundraising dollars by 14% by reducing the emails that are considered junk mail.
© 2015
This material is generic in nature. Before relying on the material in any important matter, users should note date of publication and carefully evaluate its accuracy, currency, completeness, and relevance for their purposes, and should obtain any appropriate professional advice relevant to their particular circumstances.
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