Mitch Weintraub, CPA and Michael Drennan, CPA of Cordia Partners, and Tamara Vineyard, CPA of Dixon Hughes Goodman delivered a workshop sponsored by United Way of the National Capital Area on September 25, 2013. Learn about events for our nonprofit members here: http://www.unitedwaynca.org/events/members

1. Importance of the IRS Form 990
Mitch Weintraub, CPA Cordia Partners
Michael Drennan, CPA Cordia Partners
Tamara Vineyard, CPA Dixon Hughes Goodman
Sponsored by United Way of the National Capital Area
September 25, 2013

2. Today’s Discussion
1. United Way NCA Member Benefits and
Responsibilities
2. IRS Form 990:
• Filing Requirements for 501(c)3 exempt organizations
• Requirements for United Way NCA members
• 2014-15 United Way NCA Membership Criteria
3. IRS Form 990: Best Practices for Accounting and
Preparing
4. Resources

3. Membership with United Way NCA
Benefits:
• Workplace Giving
• Opportunities to Partner
• Community Impact Grant Funding Opportunities
• Inspires Donor Confidence
Responsibilities:
• Maintain Eligibility Standards
• Promote UW/CFC Codes & Proud Member Logo
• Participate!
Number of Applicants Accepted in 2013: 695

4. IRS Form 990: IRS Requirements
The 990 can be a positive, beneficial tool!
Almost all organizations must file annually.
Due 5½ months after fiscal year ends (an automatic 3 month
extension may be requested by filing Form 8868).
Depending on receipts and total assets, organizations file one of
three possible forms:
• 990 N (e-postcard): Gross receipts ≤ $50,000.
• 990 EZ: Gross receipts < $200,000 and total assets less than
$500,000.
• Or full IRS Form 990

5. IRS Form 990: IRS Requirements
Consequences of failure to file:
• Automatic revocation of tax exemption status.
• The maximum penalty imposed regarding any one return is the
lesser of $10,000 or 5 percent of the gross receipts of the
organization for the year.
• In the case of an organization having gross receipts exceeding
$1,000,000 for any year, the penalty is increased to $100 per
day with a maximum penalty of $50,000.

6. IRS Form 990:
United Way NCA Requirements
If you file a 990N or a 990EZ with the IRS:
• Must provide a Pro Forma IRS Form 990
Pages 1, 7, 8, 9, 10, and 12
• Copy of what was filed with the IRS (990N or 990 EZ)
If you file a full IRS Form 990 with the IRS:
• Complete copy of the filed 990, including all schedules
(except B).
• Organizations with revenue in excess of $100,000 must
include a copy of an independent audit.
• Audit must cover same period as IRS Form 990.

7. IRS Form 990: Example

8. Important Criteria for 2014-15 United
Way NCA Eligibility Application
IRS Form 990 and audits, if applicable, must cover a fiscal year
ending not more than 18 months prior to January 2014 (i.e.
ending on or after June 30, 2012).
IRS Form 990 documents must show total revenue of $50,000
or greater.
• Part I, Line 12
Mistakes to Watch For:
• Are you recording all revenue sources?
• In-kind or non-cash donations
• Loans converted to donations

9. Important Criteria for 2014-15 United
Way NCA Eligibility Application
IRS Form 990 documents must reflect AFR (administrative
and fundraising rate) of 35% or less.
• Calculated from Page 9 (Part VIII), Statement of Revenue & Page 10
(Part IX), Statement of Functional Expenses
Mistakes to Watch For:
• Expenses are not properly allocated
• Money spent to provide programs must be recorded as such
• Labor or effort costs must also be allocated

10. United Way NCA: calculating your
AFR (Administrative and Fundraising Rate)
(Management & General Expenses + Fundraising Expenses) X 100 = Overhead %
Total Revenue

11. Best Practices for Accounting
and Preparing IRS Form 990

12. Best Practices: What are….?
Program Services
• Activities that further the organizations exempt purposes.
Management and General Expenses
• Expenses related to overall operations and management.
• Usually includes: Board of Director meetings, legal services,
accounting, general liability insurance, office management, auditing,
HR, annual report production, management of investments.
• Anything not specific to programs or fundraising.
Fundraising Expenses
• Expenses incurred in soliciting cash and noncash contributions, gifts
and grants. Includes expenses incurred participating in federated or
United Way campaigns.

13. In-Kind Contributions
Generally, they are non-cash donations of:
• Property/Goods
• Services
• Use of facilities (rent) or equipment
How do you value In-Kind Donations?
• Generally, in-kind contributions are recorded at the fair market value of the
donation at the time of donation
Fair market value is the price at which a willing buyer would
purchase the good or service
Examples of fair market value:
• Donated stock – fair value of publicly traded stock on the date of donation
• Donated clothing – fair value per thrift store listing
• Donated food – fair value per pound per local area Food Bank

14. In-Kind Contributions (Continued)
More Examples:
• Donated facilities- value per real estate assessment or similar means to
estimate annual rent
• Donated artwork or other collectible- value from donor appraisal for
donor’s personal return
Contributed services have special requirements:
• Services provided must create or enhance nonfinancial assets
• Require specialized skills, are performed by those with specialized skills
• Service would otherwise be purchased
• Fair value of these services can be determined through comparable
quotes for similar services

15. In-Kind Contributions (Continued)
Reporting In-Kind Contributions on Form 990:
• Schedule B (for those required to file) discloses contributions between
cash and non-cash by donor
• Schedule M is required for aggregate in-kind contributions over $25,000
• Doesn’t include donations of services, use of facilities, use of materials or
equipment
• Donations of services, use of facilities, and use of materials or equipment
are not reported as income and expense on form 990; they are reversed
on Schedule D Part XI as reconciling items between audited financial
statements and Form 990

16. Other Mistakes to Watch For:
Form is incomplete
• Pro forma does not include required pages
• Signature is missing
Accounting method is not indicated (cash/accrual)
• For United Way / CFC participation, those with greater than $100,000
revenue must use the accrual accounting method.
Form is manually prepared
• More opportunity for mathematical or other errors
Board of Directors information is inconsistent
• Information on Page 1 must match information on Page 7 (Part VII)

17. Cost Effective Solutions to Improve
Accounting and Reporting
Implement QuickBooks system
• QuickBooks online starting at $12.95/month
• QuickBooks Pro 2012 software starting at $130.00
Consider implementation of Bill.com, an electronic bill pay system that integrates with QuickBooks
Record and reconcile all transactions
Develop basic policies and procedures
Maintain accurate time sheets (or monthly effort reports). Signed, dated and initialed & dated as approved.
Recruit appropriate board members
• Minimum of three board members, its ideal to have more.
• Treasurer – attempt to find individual with finance background.

18. Contact Info and Resources
Contact Member Services at:
Phone: (703)549-4448, Option 1
Email: membership@uwnca.org
• Visit us online: www.unitedwaynca.org/members
• Application Dates: November 4, 2013 - December 4, 2013
• If you would like to receive electronic copies of the General Accounting Policies & Procedures Manual and/or
the Time Sheet template, please send a request to membership@uwnca.org
• Additional Resources: Instructions to Form 990 Schedules B, D, and M; www.irs.gov/publications/p561 -
Determining Fair Value of Non-Cash Property FASB ASC 958-605-15-2 and 15-4 Contributions Received
(Formerly FAS 116)
• Search for the Form 990 of any organization at www.guidestar.org