2014-09-18 Financial meeting

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Best practices

Should we have a treasurer's statement at board meeting? Should it be recorded in the minutes?
Monthly statements should not be a problem
Do we need audited statements at fiscal year end? Is there a threshold at which they are required?
Donors (foundations, banks) would request that someone do our taxes if we get big enough. Otherwise, no. $50,000 is probably a good threshold here too.
What other reporting is needed for a non-profit of our type within the US and Alabama?
Threshold for tax reporting is $50,000 annual revenue. Otherwise we just have to confirm we had less than that amount.
Financial reserves - what investments are appropriate? CDs or equivalent like GICs? Term deposits?
Did not have time to discuss this
Appropriate level of cash on hand for deposits? $5000? More? Less? What is appropriate for our scale of operations?
Did not have time to discuss this
Account structure?
Account structure in progress, we also have a sample list of accounts that is more detailed than we will need and more notes below.
Handling depreciation of group assets?
This ties into equipment donations. Talk to School Factory about this. Can't give full price credits for e.g. 3 year old computers so we need a policy for valuing donations. May set a minimum value for equipment donations that need to be recorded. Put the value in Income -> Gift in Kind and balance against Expenses -> Non-Cash etc. This is not usable for tax purposes but can be used to show how much community support we have.
General best practices outline from Keith?
We have a sample list of accounts, some are now added to GnuCash.
Ways to make donation tracking easier for treasurer?
Did not have time to discuss this

Specific questions

Fiscal sponsorship arrangement - is 10% of cash donations a good deal? Woodlawn Foundation takes a smaller % for similar arrangements
Did not have time to discuss this
What paperwork and payments do we need to specifically track and submit to the IRS/State/City throughout the year? Taxes on sales within space (none yet, maybe March 2015)? Classes (services) provided in-space?
This fits pretty well into the sample account structure Keith gave us, changing Program Income to Income:Class Fees, and Income:Sales would balance against Expenses:Cost of Goods Sold

Other notes

  • For independent contractors e.g. electricians, have to send a 1099 if the amount is over $600 (unless they give you a W-4(?)); they need to know they're getting a 1099
  • The other arrangement is to make people employees and pay the employer's share of FICA etc. (we will probably not have any need for that)
  • In general it's not necessary to show or record non-cash events unless they are material. Need to report non-cash separately in statements etc.
  • For reconciliation I currently don't have a way of tracking e.g. checks that haven't been cashed. We need to track these so we can track expenses that we know will go out.
  • When we have fundraising events, the income and expenses from those events need to be tracked separately.