Accounting 101 Patrick Scholl 2011 Alumni Leadership Connections June 11, 2011

Course Objective Provide answers to the list of most frequently-asked financial questions and Test to see if you are Smarter than a 5 th Grader

List of Questions 1. What is an EIN and how do I obtain one? 2. How does my organization become recognized as a non-profit? 3. What are the benefits of 501(c)(3)? 4. What are the requirements of 501(c)(3)? 5. Is my organization exempt from paying sales tax?

List of Questions 6. Can my organization conduct games of chance to raise money? 7. How do I obtain a certificate of insurance for an upcoming event? 8. What insurance coverage is provided?

1. What is an EIN and how do I obtain one?  Employee Identification Number  Nine-digit number assigned to entities for tax filing and reporting purposes  Necessary to open an account at a bank  Obtained by filing Form SS-4 with IRS  Download form at Click on Employer ID Numbers

2. How does my organization become recognized as a non-profit?  Must have exempt purpose  Apply for exemption under 501(c)(3) of the Internal Revenue Code  Chapter and AIGs can sent written request to be included under the group exemption of the Penn State Alumni Association.

Send written request including EIN Name and Address of Principal Officer to: Patrick Scholl Director of Business and Finance Penn State Alumni Association Hintz Family Alumni Center University Park, PA

3. What are the benefits of 501(c)(3)?  Most revenue not subject to Federal Income Tax  Revenue not subject to State Income Tax  Able to offer tax deduction to donors  May be eligible for special postage rates

4. What are the requirements of 501(c)(3)?  Must engage primarily in activities that accomplish exempt purpose  No earnings may inure to a private individual  Certain revenue is taxable – first $1,000 is exempt  Fiscal year must end on June 30  Requirements for donations  Filing requirements for tax forms

4a. Requirement for Charitable Contributions  Written disclosure required for donation of $250 or more  Name  Date  If cash - Amount of contribution. If non-cash - description of contribution.  Description and estimated value of any goods or services organization provided to donor must be included.

4b. Filing requirements for 501(c)(3)?  If Total Revenue is $50,000 or less – File Form 990-N  If Total Revenue is greater than $50,000 but less than $200,000; and Total Assets are less than $500,000 – File Form 990-EZ  Otherwise – File Form 990  Due by November 15 following close of fiscal year

5. Is my organization exempt from paying sales tax?  Organizations based in Pennsylvania are NOT exempt from paying Pennsylvania sales tax  Some states do provide exemptions – check with your state’s department of revenue

6. Can my organization conduct games of chance to raise money?  Each state’s requirement differ – check with your own state’s department of revenue  Pennsylvania permits charitable organizations to conduct certain Small Games of Chance of games such as Daily Drawings; Weekly Drawings; and Raffles

6. Can my organization conduct games of chance to raise money? (continued)  In Pennsylvania - Contact your County Treasurer for a license to conduct small games of chance  Persons under 18 years of age are not permitted to operate or play any games of chance  Individuals may not receive compensation for conducting any games of chance  Other restrictions – amount of prizes and total prizes awarded in a year

7. How do I obtain a certificate of insurance for an upcoming event? Send request to your Regional Director or Cris Boob Office of Risk Management

8. What insurance coverage is provided?  $1 Million General Liability  $1 Million Auto  $1 Million excess for each occurrence  $5 Million aggregate  Not Directors and Officers ¥¥

Are You Smarter than a 5 th Grader? International Currency Symbols ¥

Are You Smarter than a 5 th Grader? What Currency symbol is $ ¥

Are You Smarter than a 5 th Grader? What Currency symbol is $ American Dollar ¥

Are You Smarter than a 5 th Grader? What Currency symbol is €

Are You Smarter than a 5 th Grader? What Currency symbol is € Euro

Are You Smarter than a 5 th Grader? What Currency symbol is ¥

Are You Smarter than a 5 th Grader? What Currency symbol is ¥ Japan - Yen

Are You Smarter than a 5 th Grader? What Currency symbol is CHF

Are You Smarter than a 5 th Grader? What Currency symbol is CHF Switzerland - Franc

Questions? Patrick Scholl Director of Business and Finance Penn State Alumni Association Hintz Family Alumni Center University Park, PA