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How to Account for Debt Securities

U.S. Treasury bills are short-term obligations sold at a price less than their face value. Treasury notes and bonds are long-term obligations that make semi-annual coupon interest payments. What is the proper way to record activity on these investments? On a non-interest bearing note, such as a treasury bill, the difference between the face value […]

Alternative Investments and Reporting Requirements for Associations

Additional disclosures in the annual Form 990 and possible taxable implications — Many associations are investing in alternatives due to the ongoing economic recovery and low rate of returns from traditional investments. Endowment and board designated funds need to achieve investment targets, which can be near impossible to make with the average returns from mutual funds […]

What You May Have Missed: Cost-Saving Initiatives and Best Practices for Exempt Organizations

On November 9, Aronson LLC, Arent Fox, and Morgan Stanley hosted an executive summit for exempt organizations that featured strategies for making and saving money, and tips on top governance issues. Missed the event? Here is a brief recap. The event kicked-off with keynotes delivered by former United Way CEO and Chair of the Alexandria […]

New Markets Tax Credit Benefits Nonprofits

The New Markets Tax Credit (“NMTC”), under IRC §45D, was created as part of the Community Renewal Tax Relief Act of 2000. This act encouraged qualified equity investments (“QEIs”) in community development entities (“CDEs”) directed towards low-income communities. President Obama recently extended the NMTC in January of 2013 as a part of the American Taxpayer Relief […]

Wells Fargo Served a Major Legal Defeat Against Minnesota Nonprofits

U.S. District Court Judge Donovan Frank has shot down Wells Fargo’s request for dismissal of the civil trial following the 2010 verdict of fraud and breach of fiduciary duty by the bank. Blue Cross and Blue Shield of Minnesota, along with two other health care organizations, several pension funds, a college endowment fund, and a […]

“Stealing from Kids”

The Chronicle of Philanthropy and the Press Democrat are reporting that a federal grand jury has charged a California man with 9 counts of  wire fraud relating to the alleged theft of over $2 million from the National Education Foundation in Alexandria, VA. The organization offers grants and online classes to disadvantaged students around the […]

Treasury Bonds: Is the Future Secure?

Nonprofit organizations tend to be heavily invested in treasury bonds because of their low volatility and relatively guaranteed return. The bull market combined with low-interest rates and slow economic recovery has kept bonds in the limelight. But is it always going to be that way? It’s fair to say that the bull market has to […]

Stockpiles of Gold

The board of a Canadian charity is regretting deeming an audit too expensive after realizing that the organization has been using a large amount of revenue to stockpile gold. The Toronto Star reported on The Ontario Society (Coalition) of Senior Citizens’ Organizations (OCSCO), a Canadian charity with a mission is to “improve the quality of […]

Madoff Claims Banks “Didn’t Want to Know”

The first interview with Bernie Madoff since his arrest in December 2008 hit the press yesterday in a New York Times article. During the interview, Madoff claimed that the banks had an attitude of “if you are doing something wrong, we don’t want to know about it.” He stated that the banks were complicit in […]

Getting Those Pesky Fair Value Disclosures Right

Accounting Standards Updates No. 2010-06 requires new disclosure for assets and liabilities classified as Level 1 or Level 2 in the fair value hierarchy.  Those disclosures are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. The disclosure requires the amounts of significant transfers between Level 1 […]