Nonprofits face reporting challenges
September 18, 2012
Nonprofit organizations are facing a growing demand for more accurate reporting about expenses and salaries, according to the Chronicle of Philanthropy. Donors are asking for greater insight into accounts to see what portion of contributions are actually being used for programs, and how much money is being used to pay executives, staff members and cover fundraising costs.
It can be difficult for some organizations to determine exactly how much is being put toward fundraising costs from the portion that is going to support top projects, according to the York Daily Record. Part of the problem is the result of complicated auditing processes.
"The IRS has come up with such a complicated set of reporting forms ... it takes days to complete, and a layman can't complete it anymore," Dan Busby, president of the Evangelical Council for Financial Accountability told the source.
Instead, organizations may have to allocate funds to hire a CPA or invest in nonprofit accounting
programs to ensure funds are accurately being tracked. They can then turn this information into reports for stakeholders and potential donors that want a transparent look into their finances. Ultimately, this may help nonprofits gain better control over funds and accurately represent financial statements, according to the Huffington Post.