Audit, Tax and Advisory for Foundations & Grant-Making Organizations
Nonprofits are most successful at achieving meaningful change in our communities when they have the financial resources to be effective. Private foundations and grant-making public charities deliver these resources, and impact positive change in economic, social, cultural, and environmental conditions.
AAFCPAs’ experience with all the nuances of the foundation and grant making industry gives us first-hand knowledge to keep you informed of the latest trends and opportunities. This comprehensive expertise helps foundations magnify the impact they can have by streamlining their own operations and optimizing their finances.
Primary Reasons Foundation Clients Appreciate AAFCPAs
Regulations – We have deep knowledge of the policies, procedures, and regulations of the IRS related to operating and non-operating foundations. We counsel foundation clients on matters such as self-dealing rules, distribution requirements, program-related investments, jeopardizing investments, taxable expenditures, expenditure authority rules, and more.
Alternative Investments – We advise clients who have highly diversified invested assets to establish best practice internal controls over investments, including procedures for due diligence and valuation of alternative investments. We have clients that work with investment advisers that support the due diligence process. We understand the complexities of alternative investments and methods used for valuation of these funds. We also keep abreast of applicable foreign reporting requirements and unrelated business income considerations. In addition, we audit reconciliation procedures for investment and custodian statements, structuring investment spending policies, and valuation due diligence.
Endowments – We help with complex endowments and other restricted net assets by assisting in developing and evaluating investment and spending policies, designing reporting structures, and evaluating and improving internal controls over investment activities in line with the Uniform Prudent Management of Institutional Funds Act (UPMIFA).
Grants – We work with clients that make grants to a wide variety of local, national, and international organizations. We understand the rules and due diligence related to qualified domestic grants and non-US-based organizations.
Interpreting Financial Statements/Training – We teach grant makers and program staff how to read and assess a nonprofit’s financial condition through reviewing their audited financial statements and their IRS and state filings. Understanding an organization’s financial statements is critical when deciding grant awards.
Tax Status – We have substantial experience with organizations that have transitioned from private foundation status to public charity or supporting organization status, and foundations that have moved between operating and non-operating status. We provide guidance with due consideration of future expected operations and sensitive relationships with key donors.
AAFCPAs provides proactive audit, tax, and advisory services to foundations and grant making organizations, including:
- Regulatory compliance and guidance concerning tax status.
- Review of internal controls and financial management for best practices.
- Calculation of financial ratios and benchmarking to industry standards.
- Streamlining of processes to facilitate all regulatory reporting.
- Advise on upcoming regulatory changes to determine potential impact.
- Examination of financial and personnel resource allocations.
- Training for your Board on interpreting financial statements, governance, and understanding program-related and mission-related investment rules
- Guidance on the complexities associated with the IRS’ Form 990-PF tax rules
- In-house Tax Consulting Attorneys available to evaluate and assess risks associated with complicated tax challenges or controversies
- Guidance on self-dealing rules, related party and executive compensation disclosures
- Managed Accounting Solutions: Right-size, outsourced accounting solutions, from cloud-based bookkeeping to high level CFO oversight
- Business Performance, Internal Controls & IT Advisory
- Institutional investment advice, money management, financial planning & consulting, executive deferred compensation & retirement plan consulting, and succession planning solutions
- Fiduciary guidance and investment advisory solutions for employee benefit plan sponsors
- Technical Accounting Advisory: Implementation of new accounting standards, assistance with complex operational and financial transactions, audit preparation.
Foundations and grant-making organizations provide resources for enhancing the vitality of the nonprofit community. AAFCPAs celebrates the many nonprofits that enrich our lives by donating 10% of our net income annually back to nonprofits.
“When we were first audited by AAFCPAs in 2005, we truly felt like we had never been audited before. AAFCPAs’ thoroughness and deep knowledge of the applicable regulations and best practices left us confident that we knew everything that was working well as well as anything that needed improvement. We have a much better fiscal operation today because of their work. Based on our satisfaction, I highly recommended AAFCPAs to an outside Board of which I am a member and AAF’s offering was the clear winner. And when I was asked to join another outside Board, the knowledge that AAFCPAs was their auditor made it much easier for me to say yes.”
New England Foundation for the Arts | Joanne Herman, Former Financial Controller