Mid-Year Round-Up of Not-for-Profit News (article)

Mid-Year Round-Up of Not-for-Profit News (article)

Several news developments may of interest for not-for-profits.Revenue recognition, charitable giving results, compliance supplements—several recent developments could hold particular interest for the not-for-profit community. The following is a brief round-up of what’s new and noteworthy in not-for-profit accounting and management.

Accounting Updates

OMB Procurement Standards Delayed

The Office of Management and Budget (OMB) recently revised its grace period related to procurement policies under the Uniform Grant Guidance. Nonfederal entities will have an additional fiscal year to implement the procurement changes, which require:

  • Written policies and procedures over procurement
  • Oversight to ensure contractors perform in accordance with terms and conditions of their contract
  • Written standards of conduct related to conflicts of interest
  • Records to detail the history of procurement, including rationale for procurement method, selection of contract type, contractor selection or rejection and basis for contract type

Nonfederal entities also select from one of five acceptable methods of procurement for purchases: micropurchases, small purchases, sealed bids, competitive proposals or sole source. Procurement methods are chosen based on the situation and the amount of the purchase involved, and each method comes with unique requirements to follow.

The delay in the procurement standard will allow nonfederal entities to implement the procurement standards for fiscal years beginning on or after Dec. 26, 2017.

FASB to Draft Revenue Recognition for Not-for-Profits Exposure Draft

Since being added to the Financial Accounting Standards Board (FASB)’s technical agenda in April 2016, revenue recognition’s impact on not-for-profit organizations has been a discussion point for the FASB. The Board has been evaluating how revenue recognition guidance under ASC Topic 606 may impact the recognition of grants and contracts received by not-for-profits.

Conversations focused on two main issues in ASC Topic 958, Not-for-Profit Entities:

  • Characterizing grants and similar contracts with government agencies and others as (i) reciprocal transactions (exchanges) or (ii) nonreciprocal transactions (contributions)
  • Distinguishing between conditional and unconditional contributions

During a June 7, 2017, meeting, the FASB discussed the definition of a donor-imposed condition and gave the green light to compile an exposure draft of accounting changes. The exposure draft on Revenue Recognition of Grants and Contracts by Not-for-Profit Entities is expected to be released sometime in the third quarter of 2017.

Management & Other News of Interest

Another Record Breaker for Charitable Giving

For the third year in a row, charitable giving reached record highs according to Giving USA: The Annual Report on Philanthropy Year 2016. Results show that charitable donations in the U.S. were around $390 billion in 2016, an increase of 2.7 percent from 2015.

At nearly $123 billion, religion made up the largest percentage of donations, followed by education ($59.8 billion) and human services ($46.8 billion). Individuals were the primary source for donations. Giving by individuals, foundations and corporations all increased from the previous year.

Measuring Arts Organizations’ Impact on the Economy

An arts advocacy group recently released a report that estimates nonprofit cultural institutions generated $166.3 billion in economic activity, taking into account organizational and event-related spending. Conducted by Americans for the Arts, the report Arts & Economic Prosperity 5 examined not-for-profits in 341 communities as part of its research. It looked for organizations that supported visual, performing, literary and media arts as well as municipal arts agencies, zoos and botanical gardens and collected detailed expenditure and attendance data from each.

The Georgia Institute of Technology assisted in gauging the economic activity by compiling an input-output model to help determine the economic impact data. Findings from the Arts & Economic Prosperity 5 indicate that arts organizations supported 4.6 million jobs and contributed $27.5 billion in revenue to local and federal governments in 2015.

For More Information

We will keep you up-to-date as developments emerge that could have an impact on not-for-profits. For specific comments, questions or concerns about any of the above issues, please contact us.


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Mid-Year Round-Up of Not-for-Profit News (article)Revenue recognition, charitable giving results, compliance supplements—several recent developments could hold particular interest for the not-for-profit community....2017-06-28T18:06:00-05:00

Revenue recognition, charitable giving results, compliance supplements—several recent developments could hold particular interest for the not-for-profit community.