1. Chapter Treasurer Orientation April 23, 2012

2. Chapter Treasurer Responsibilities Maintain the chapter’s financial records Provide the President and Board with financial information Pay bills and collect funds owed Manage the preparation of the budget

3. Chapter Treasurer Responsibilities Ensure that federal tax filings (U.S. Form 990 – Canadian Form T2) are prepared and mailed in a timely manner and that a copy is immediately mailed to IHQ Ensure that state/provincial requirements for charities registration are fulfilled, including initial registration, annual reports and/or financial documentation that may be required by law, as well as providing copies of filed documents to IHQ Turn over to the successor all chapter records and/or property immediately upon completion of term or resignation prior to completion of term.

4. Session Overview Filing requirements AFP Accord Federal (US 990s and Canada T2s) State Budgeting and Cash Flow Discussion Financial Reporting Discussion

5. Filing Requirements

6. Annual Chapter Accord Checklist 2012 Chapter Leadership Form 2011 Chapter Activity Report 2011 Chapter Program Schedule Warranty Statement Conformance to Bylaws Brand Protection Proof of active status of the chapter’s corporation 2012 Chapter Affiliation Agreement Review 2011 Financial Information –2011 Financial Summary Report - or - Year-end Financial Statement U.S. Chapters Only – IRS Form 990, 990-EZ or 990-N Canadian Chapters Only – Form T2 or T2 Short – Contract for Services

7. U.S. Federal Filings Form 990 –Tax document that tax-exempt nonprofit organizations file each year with the IRS. Form 990T –If your organization earns more than $1000 of UBI during the year (UBI) unrelated business income ( income not related to your mission) Form 1099 Documentation of payment to your chapter administrator, if an independent contractor

8. Which 990 to file? Form 990 Larger nonprofits that have – gross receipts >= $200,000 - OR - total assets >= $500,000

9. Which 990 to file – cont’d? Form 990-EZ (Short Form) Nonprofits that have – gross receipts of < $200,000 - AND - total assets < < $500,000

10. Which 990 to file – cont’d? Electronic Form 990-N (e-Postcard) Small nonprofits with gross receipts of - <= $50,000 (to maintain exempt status) Form 990-PF Private foundations

11. 990 Key Information Financial Data Statement of Program Service Accomplishments Other IRS Filings and Tax Compliance Governance Disclosures Compensation of Officers, Directors, Trustees, Key Employees, Highly Compensated Employees, and Independent Contractors

12. When is the 990 due? The 15th day of the 5th month following the end of the organization's taxable year. (May 15 th for calendar year filers) You can file for two automatic three-month extensions on Form 8868.

13. What is a T2? All Canadian nonprofit organizations (except registered charities) required to annually file the T2 form, titled the Corporation Income Tax Return, even if they are not paying taxes. filed with the Canada Revenue Agency.

14. T2 Versions Short Version If your organization has a permanent location in only one territory, you can use the short version of the form. Regular Version If you're active in multiple provinces, you submit the regular version.

15. When is the T2 due? Within six months of the end of your organization's tax year or fiscal period.

16. State Filings State Information Return –E.g. VA Form 500 State UBIT Return –Unrelated business income tax Tangible Personal Property Tax Return Sales & Use Tax Return Filing for maintenance of current corporate Filing for solicitation purposes

17. What is a budget? A financial plan that identifies the financial resources required to achieve program objectives. This plan assists the staff, volunteers and board in managing programs and finances during the year.

18. Why is a budget important? Ensures that resources are available for the organization to attain its mission and vision Provides a framework for organizational decision making Tool for monitoring financial activity Help identify gaps between planned spending and actual expenses

19. Key steps to develop a budget Plan the Process Communicate responsibilities, expectations and deadlines Determine program goals and objectives Determine and document assumptions Get board agreement on goals and assumptions

20. Key steps to develop a budget – cont’d Construct budget details –General & Administrative –Personnel –Programs –Allocations –Capital needs Committee Review Final Approval Implement and Manage

21. How do you use it? On a monthly basis review actual income and expenses compared to the budget Explain significant variances between budget and actual Use actual results to develop year-end projected results Update and revise the projected results as changes occur during the year Communicate variances and projections to staff and to the board.

22. Cash Flow Planning

23. What is Cash Flow Planning? Planning and monitoring monthly inflows and outflows of cash to determine the net cash position and maintain solvency.

24. Why is it important? Plan for periods of tight cash flow Provide information on when excess cash is available for investment Assist volunteer leaders to understand the cash cycle You want to avoid the cash trap

25. Cash Trap? You can have a positive Statement of Activities (Profit / Loss) but run out of cash How does this happen? Expenses occur early or evenly throughout the year. Revenue is collected later – e.g. NPD Billings are collected later

26. Key Cash Planning Steps Establish an accurate beginning cash balance across all accounts Identify primary sources of cash inflows and outflows Group minor sources in some logical grouping Create a monthly cash model

27. Key Cash Planning Steps – cont’d Carefully plot the timing of primary transactions when developing the model –Ensure that cash related business decisions coincide with available cash Update the Cash Flow Model as actual information becomes available

28. Financial Reporting

29. 3 Standard Financial Statements Statement of Financial Position (Balance Sheet) Statement of Activities (Profit & Loss) Statement of Cash Flows

30. Statement of Financial Position Assets –Current –Long-term Liabilities –Current –Long-term Net Assets (Assets – Liabilities) –Net Organization Wealth

31. Statement of Activities Measures performance over a period of time Revenues Expenses Net Surplus/Deficit (Revenue – Expenses)

32. Statement of Activities – cont’d Recommendations –Compare actual results to budget (monthly and YTD) –Analyze major variances to budget By natural account By program, cost center or department –Forecast remaining months

33. QUESTIONS??

34. Thank you for all you do for AFP!