David Goldstein from Certilman Balin, Adler & Hyman, LLP captivated the room with his thought-provoking presentation on the Attorney General’s nearly two-year investigation of the Donald J.Trump Foundation. The presentation focused on lessons to be learned from the AG’s investigation, focusing on such issues as self-dealing, breach of fiduciary duties, use of charitable resources, political expenditures by nonprofits, exempt purpose, and more. The goal was to stress the regulatory tightrope nonprofits need to walk on a daily basis to ensure that they remain compliant to keep their exempt status intact.
Ken Cerini gave the audience a solid foundation to easily navigate through the new financial statement standards and revenue recognition model. Effective for years beginning after December 15, 2017, there will be changes in nonprofit financial statements. Those changes include:
- A classified statement of financial position with greater emphasis and disclosure of liquidity
- The requirement for all agencies (not just health and welfare agencies) to have a statement of functional expenses
- New disclosures regarding allocation methodologies
- A change in the nomenclature surrounding net assets
- A change in how underwater endowments are treated
In addition, the presentation focused on the new revenue recognition standards that go into effect for calendar 2019 or fiscal 2020 organizations. The revenue recognition standards are only for exchange transactions (those transactions that are reciprocal in nature) and therefore exclude charitable contributions.
Ed McWilliams provided his Business Advisory expertise to the attendees by shining a light on the Tax Cuts andJobs Act and its impact on the Non-Profit sector. He explained changes to Unrelated Business Income Tax, including changes to the calculation of UBIT and the treatment of certain transportation fringe benefits as additions to UBIT, resulting in a potential new tax burden for nonprofit organizations. He also discussed some of the indirect impacts of the new tax law, asking “Are tax benefits or altruistic intent the key motivator in charitable giving?” The decreases in corporate tax rates and changes to itemized deductions may decrease the tax incentive for charitable giving … only time will tell.
Employment Law Update for New York Nonprofits:
Lisa Brauner from Perlman & Perlman LLP gave the audience tips on the new sexual harassment rules in effect and how to prevent sexual harassment in the workplace by implementing and enforcing effective policies that comply with new New York State/City and federal requirements. Brauner also emphasized the importance of training staff on laws and policies regarding these issues that may occur within the organization. In addition, she informed the audience of the significance of updating handbook policies that reflect changes in federal, state and local laws. The policies she highlighted included NYS paid family leave, New York City Safe and Sick Leave Act as well as the new NLRB Standard for Employee Policy work rules. The audience was advised to be aware of the legal requirements in New York City in providing reasonable accommodations to those who are disabled, pregnant, victims of domestic violence, etc., and how to train their managers according to these requirements. She concluded with ‘what not to do’ in the workplace, which included several tips for management regarding the new laws and policies mentioned in her presentation.
Social Return on Investment (SROI): The Nonprofit Currency of the Future
Christine Deska from Nonprofit Sector Strategies informed the audience of what it means to have a Social Return on Investment. An SROI measures and accounts for the amount of social impact a nonprofit has by calculating the value of benefits divided by the value of investment. She encouraged the audience to be mindful of the inputs, outputs, and outcomes of their organization. Deska discussed the importance of choosing the right inputs, determining how those inputs will be measured, and where possible, linking into research that has already been performed and is quantifiable in order to determine the value of your agency’s ROI. According to Deska, determining the level of impact is only part of the battle, it’s also important to push that information out in easy to read and understand methods, such as infographics. This very engaging presentation provided the audience with a guide to evaluate their organization’s mission impact.