Proposed Changes to In-Kind Contribution Presentation

It seems as though each year there is a new accounting standard that is going into effect, and in February 2020 the Financial Accounting Standards Board (FASB) issued a proposed Accounting Standards Update (ASU) to keep that trend going. The proposal relates to in-kind donations received by nonprofit organizations and came about because ASC 606 (Revenue Recognition) did not address specific presentation or disclosure requirements related to contributed nonfinancial assets (in-kind donations). Examples of in-kind donations would be fixed assets, materials, supplies, clothing and contributed services.

The purpose of the standard is to improve financial reporting by providing new presentation and disclosure requirements, including additional requirements for recognized contributed services. The goal of the standard is to increase transparency on how the assets are used and how they are valued. The proposed ASU would not change the recognition and measurement requirements for these type of assets.

The amendments in the proposed standard include the following:

The amendments in the proposed standard would be applied on a retrospective basis. An effective date will be determined after the Board considers feedback on the proposed amendments. The proposed standard was in exposure draft, and FASB welcomed comments through April 10, 2020. The Board will hold a public roundtable and the staff will analyze the comments received before issuing any final standard.

If you have any questions in regard to how the proposed standard will impact your organization, please contact your Hawkins Ash CPAs representative.

Early Lessons from COVID-19

The coronavirus (COVID-19) pandemic is front and center for many organizations as they try to adjust to the “new normal.” Although this has negatively impacted nearly every organization, the pandemic has also forced all businesses, including non-profit organizations, to take a hard look at their operations for potential areas of improvement.

Revisions to the Annual Budget

Many organizations establish a budget on an annual basis and once it is approved, it is unchanged for the entire fiscal year. Even though all of the effects of the COVID-19 pandemic are currently unknown, most organizations realize the annual budget is no longer valid. Spending some time now to reexamine the budget may uncover areas where adjustments or cost savings could be made. This process may prove to be so beneficial that your organization may want to establish a policy to review the budget at some interim date on an annual basis.

Effect on Contributions

COVID-19 has resulted in the temporary or permanent layoff of many individuals, some of whom may be regular contributors to your nonprofit. While it may seem to be the “wrong” time to solicit contributions, many individuals respond positively to direct solicitations in times of crisis for nonprofit organizations. Your organization (provided resources allow) should consider a direct appeal to donors to maintain or increase the flow of contributions, which can help to mitigate some of the negative impact from COVID-19. In addition, some areas have community foundations or other similar organizations, which are able to help a wide variety of nonprofits with funding to “bridge the gap” during this time of economic uncertainty.

Federal Assistance

The federal government also has instituted various programs to assist businesses in coping with the fallout from the pandemic. Many nonprofits have taken advantage of the Paycheck Protection Program (PPP) which offers low-interest loans that may be forgiven, provided the recipient follows the regulations issued by the Treasury Department. Recipients should be in contact with their lenders to help them stay on top of the ever-changing aspects of this (and other federal) programs. It is important to realize, even if all of the loan is not forgiven, the amount that needs to be repaid has a low interest rate and a 24-month repayment timeframe.

Even though the PPP appears to be the most popular federal assistance program, it should be noted that there are other available programs that could benefit nonprofit organizations, including provisions under the first coronavirus relief legislation (Families First Act or FFA). These items include emergency family and medical leave and emergency sick leave. Amounts paid by employers under these programs are reimbursed by the federal government through refundable payroll tax credits. As with the other federal assistance programs, there are various rules that must be followed to qualify for the payroll tax credit.

We Are Here to Help

The pandemic has resulted in sudden changes to operations for nearly all nonprofit organizations, including additional recordkeeping and difficult fiscal decisions. Please contact us if you need guidance in navigating these difficult times or visit our website for information and resources regarding COVID-19.

Holding a Virtual Meeting or Event? Plan for Cybersecurity

In today’s ever-changing world, organizations of all types are moving to meet and hold events online. There are many companies that provide a platform that is easy to use, quick to setup and allow participation from anywhere. One area all organizations should consider when selecting and using these tools is cybersecurity. Today I will discuss what makes a platform secure, and what you can do to support that security. This information is not intended to support any one specific product, but to empower you to make safe choices on any solution out there.

I am going to start with the most common question I get asked: How do we know if an online solution is safe to use? My response is to ask these basic questions in return:

Once you have chosen an online tool that meets your needs, keeping it secure is ultimately up to you. Many articles recently have been written about online meeting exploits, such as instances where uninvited participants join a private meeting unexpectedly with the intent of either stealing information or simply causing disruptions. These issues are not new, and have been around since before the telephone was invented. Following these best practices will ensure that you do not fall victim, as well. While not all platforms have all these capabilities, the more you use, the safer your interactions will be.

Regardless of the platform, the best way to stay safe is with knowledge. It is critical to take the time to go through product trainings and read through “best practices guides,” so you can understand the capabilities of the system. This knowledge will empower you to ensure that your online events are secure and successful.

The mission of the YMCA is “To put Christian principles into practice through programs that help build a healthy spirit, mind and body for all.” For the La Crosse Area Family YMCA, this mission remains at the forefront during the coronavirus (COVID-19) pandemic of 2020. From providing emergency childcare for local essential frontline workers and their families to serving much-needed meals for youth, the Y continues to fulfill its mission during this unprecedented time of great need.

At the helm of two Wisconsin Y facilities—the Dahl Y in La Crosse and the Houser Y in Onalaska—is CEO Bill Soper, who has served in the role for 25 years. He explains that supporting each other and taking good care of employees while navigating the COVID-19 crisis was a top priority when the two facilities were closed. This included posting weekly challenges on the Y’s website with “virtual fitness” on-demand videos to help members and staff stay active at home, as well as providing mental health resources and contacts for staff. In addition, the Y’s community health worker spent a majority of his time in the community connecting with the most vulnerable, including those who have lost their housing and those who have lost their jobs—especially due to COVID-19.

In response to the critical need of feeding children in the community, the Y also collaborated with the School District of La Crosse, the City of La Crosse, and the Northside Library to serve hundreds of free “grab and go” meals at multiple locations as part of a successful Free Supper Program.

For the past several weeks, Soper and his staff have attended daily conference calls with 30 other Ys in the state, discussing reasonable steps to take for reopening. “We're ‘seeing’ everybody every day. It’s a really tight group and we’ve learned a lot together,” he says. Their collective priority is making sure each Y location remains safe for members and staff in a way that it can still operate in the current climate of uncertainty.

Soper explains that a lot of time was spent developing protocols in preparation for reopening on June 1, 2020. State and county health guidelines also were implemented and continue to be enforced at both La Crosse area facilities.

While reflecting on the events and impact of recent times, Soper shares that reopening during the pandemic feels a lot like opening day of the Houser Y 14 years ago. “Much like how we didn’t know what to expect that first day, we just don’t know the comfort level that members will have coming back,” he said. “Our members have been amazing in supporting us. We’re going to make it as safe as possible.”

Q&A with Bill Soper

From YMCAs in North Dakota and Delaware to the La Crosse Area Family YMCA in Western Wisconsin, Bill Soper has dedicated more than two decades of his professional career to supporting this nonprofit.

During his time in La Crosse, Soper and his team have successfully managed, grown and positioned the YMCA as a cause-driven organization committed to strengthening the community through youth development, healthy living and social responsibility.

Now shortly after reopening at a time when these services are perhaps needed the most, Soper reflects on the past and looks to the future of serving his local community in new and impactful ways.

What are some things you know now that you wish you knew when you first started as a nonprofit leader?

The first thing I wished I knew when I started with the Y more than 30 years ago is the importance of having the right staff members on the staff team. That being said, I could not be more proud of our staff team, the job they do for our Y and the role they play as leaders in the community. We seek out highly motivated and dynamic people and then encourage them to be innovative and reach out into the community. As I have gained experience, it has become easier to identify the right individuals and lead them in a way that allows for their personal growth, as well as the Y’s success.

The second thing would be the importance of fiscal management and fiscal responsibility. When I started in the Y as a Youth Sports Director, my energy was focused on introducing and growing sports programs—not on managing the finances of my departments. Within the structure of the YMCA of Delaware, where I worked at the time, the finances generally were handled by others. When I took my first CEO job at a small YMCA, I had a great deal to learn about finances and nonprofit accounting. The ability to operate a nonprofit in a fiscally responsible manner ensures that there are resources available to adequately fund Y operations, programs and activities that are so critical to the community. Additionally, donors have an expectation that nonprofit organizations are going to be operated in this manner and that the organization is going to be a good steward of the donated dollars.

What has been your biggest source of pride as CEO?

My biggest source of pride as the director of the La Crosse Area Family YMCA has been the way the Y has grown and changed to become an integral part of the community. It has been a privilege to lead an organization that serves more than 30,000 (our pre-COVID-19 number) of our neighbors as members annually.

The growth has come through the engagement of effective policy volunteers, providing quality programs and activities, meeting critical community needs, and the willingness to expand the role of the Y in the community.

What are your two biggest accomplishments in your career as a not-for-profit leader?

First, expanding the role of the Y in the community and the expansion of our facilities and services. In the past 15 years, thanks to the incredible generosity of our donors, we have been able to bring the Houser Y to the Onalaska and Holmen communities. Additionally, we were able to bring to the community:

In the near future, when our operations are back to a “new normal,” we will be launching projects to remodel the locker rooms at the Dahl Y and add a warm water pool at the Houser Y.

Second, the Y’s focus on the health and wellbeing of the community. As our Y began focusing on addressing critical community issues, particularly those outside the walls of the Y, we were able to expand the role of the Y in the community. This focus on community health has led to the Y playing a role in teen and adult mental health, cancer survivorship, chronic disease prevention, adaptive and inclusive programming, food insecurity, and much more. I have been incredibly proud of the success the Y has had in addressing many issues in our community.

What are the dominant challenges that you see nonprofit organizations facing and what do you think would be viable solutions?

My answer today is very different than it would have been pre-COVID-19. At this time, the economic challenges and unemployment rate will affect all nonprofits. We have greater needs and fewer resources. We are working every day to balance our ability to provide needed activities and programs to our community with our ability to raise funds and generate revenue. Our donors have been very generous throughout our 137-year history and will be very important to us in the near future.