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Planned Giving: Don’t Let Investments
Drown
By Mark Hrywna
Volatility in the stock market might make
individuals looking for security more open to charitable gift
annuities (CGA) but at the same time the market might be
wreaking havoc on a charity’s annuity reserves, a portion
of which are usually invested in equities.
The American Council on Gift Annuities
(ACGA) recommends a portfolio be invested 40 percent in equities
and 55 percent in bonds, with 5 percent cash.
To read
the complete article click here... |
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Regulation
...
Disclosure requirements for the new Form
990
Nonprofits have plenty of work to do: saving the world,
feeding the hungry and sheltering the homeless. Who’s got
time to fill out Internal Revenue Service (IRS) forms, much less
provide them to the public? Well, you’ll have to make time
because it’s the law.
G. Bliss Jones, of Atlanta-based Jones and Kolb,
presented a session on policies and procedures within the
revised form 990 during the American Institute of Certified
Public Accountants (AICPA) annual conference in Washington, D.C.
this year.
The new 990 has a renewed focus on governance policies,
asking nonprofits to specify how they make Forms 990, 990-T, and
1023 or 1024 (conflict of interest policy) available for public
inspection as well as how they make governing documents and
financial statements available to the public.
The specific tax forms are required to be made available,
but the manner in which that is done is optional. He said
finding Form 1023/1024 can be challenging, but there is no
federal tax law requirement to make governing documents,
conflict of interest policies or financial statements
available.
Jones recommends tax forms be made available upon request
and otherwise generally available on Web sites like
Guidestar.org, and consider requests on a case-by-case basis for
information beyond what’s available in Form 1023 and the
three most recent 990s.
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Accounting ...
6 key concepts of fair
value measurements
Nonprofits looking for fair
value measurements when it comes to assets and liabilities
should become familiar with Statement of Financial Accounting
Standards (SFAS) 157.
Issued in September 2006, SFAS
157 applies broadly to financial and non-financial assets and
liabilities measured at fair value. It was designed to improve
financial reporting by providing a common definition of fair
value; establishing a framework for measuring fair value;
expanding disclosures on use of fair value measurements, and
creating a principles-based standard.
Kristofer Anderson, valuation
fellow with the Financial Accounting Standards Board in Norwalk,
Conn., and Nancy Shelmon, senior partner in not-for-profit and
higher education services group at PriceWaterhouseCoopers,
presented a primer on SFAS 157 during a session at the recent
American Institute of Certified Public Accountants (AICPA)
annual conference in Washington, D.C.
Anderson and Shelmon offered
six key concepts of SFAS 157:
- Orderly transaction: hypothetical
transaction at measurement date; not a forced sale.
- Market participants: Buyer or sellers in
principal (or most advantageous) market for an asset or
liability.
- Principal/most advantageous market: market
with greatest volume/level of activity in which an entity could
sell asset/transfer liability.
- Highest and best use: Fair value should
reflect highest and best use from a market participant
perspective, regardless of management's intended
use.
- Fair value hierarchy: Fair value hierarchy
prioritizes inputs used in valuation techniques. Techniques
should maximize use of observable inputs/minimize use of
unobservable inputs.
- Valuation techniques: Consistent with
market approach, income approach or cost approach is required to
be used.
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Human Resources ...
7 ways of valuing
human capital
Organizations that value their
employees have dedicated employees who do a better
job.
This truism is widespread, but
many managers who espouse the concept of valuing employees never
put their money where their mouths are. Or, they have good
intentions but no idea about how to put those intentions into
practice.
In his essay “Walking
the Talk with Talent,” which appears in the book
Capturing the People Advantage, Edward E. Lawler III
argues that in an organization where people are supposedly
treated as a valuable asset, the board, human resources and
information systems must be involved.
-
The board should have at
least one member with a sophisticated understanding of the
research related to human resources management, organizational
effectiveness, succession planning and learning and
development.
-
Board members should receive
regular information about the condition of an
organization’s talent and the way it develops and deploys
that talent.
-
The board should spend at
least as much time on human-capital issues as it does on the
allocation of financial and physical capital.
-
Human Resources (HR) should
contain some of the top talent in the organization, along with
the best information technology resources.
-
HR should be seen as an
important stepping-stone for anyone aspiring to senior
management.
-
HR leaders should be
involved in business strategy discussions.
-
Organizations should adhere
to the saying that what gets measure gets attended. HR measures
must be as relevant, rigorous and comprehensive as measures for
financial and physical capital. |
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