Many non-profit organizations have found that PayPal offers a safe, convenient and unobtrusive way to solicit donations. It can be a great complement to traditional fundraising efforts, particularly at a time when staffs and budgets are stretched thin.
Your donors can reach PayPal from your website, make a contribution on a secure site, then return to your site. You and the donor receive a receipt, and in most cases you will have instant access to the money. There are no setup or maintenance fees, and PayPal offers a suite of services specifically for non-profits.
While PayPal is an inexpensive and easy-to-use service, it is also a loosely controlled method of moving money. For that reason, we recommend especially intentional and well-documented approaches to ensuring effective controls. We recommend you consider the following:
- Document the intended uses of PayPal and a related controls policy, including the importance of effective passwords
- Enforce a notification system that cannot be overridden by the person with the PayPal login ID and password. For example, create an email forwarding account that automatically notifies multiple employees (i.e., someone in accounting and someone in development) whenever a donation is received.
- Request that PayPal automatically sweep the balance in the account nightly. This is a free service.
- Use a zero-balance bank account for receiving the money from PayPal. Otherwise, money can be moved from the bank account into PayPal and then emailed anywhere.
- Request a remote identification device from PayPal that provides a unique number that is constantly changing, and store the device in a secure place.
For more information on our Internal Controls services, click here. For more information on our non-profit accounting services, click here or contact a member of the Barnes Dennig non-profit client service team at (513) 241-8313.
Employee theft was a prominent – and expensive – problem in 2011, but there are some noteworthy trends that can help you prevent similar loss within your organization.
Marquet International Ltd. has studied white-collar crime in the United States for the past four years, and its most recent report – The 2011 Marquet Report on Embezzlement – indicates that fraud remained a significant issue in 2011. The company examined 473 cases of white-collar fraud with more than $100,000 in reported losses, and its findings include:
- There was a slight 2% decrease in the number of cases from 2010.
- Non-profits, including religious organizations, experienced one-sixth of all major embezzlement cases.
- The average loss was nearly $750,000.
- Employees who held finance/bookkeeping and accounting positions committed about three-quarters of the incidents in 2011 and two-thirds of all cases from 2008-2011.
- The most common scheme involved issuing forged and unauthorized company checks. The second-most common scheme involved the theft and/or conversion of cash receipts.
- Nearly two-thirds of the cases involved female perpetrators. However, on average, male perpetrators embezzled nearly 25% more than females.
- Nearly 90% of the cases involved individual perpetrators, and most major embezzlers appear to have been motivated by a desire to live a relatively more lavish lifestyle, rather than driven by financial woes.
A majority of the organizations involved in these schemes had weak business and cash controls. In economic uncertainty, preventing fraud with strong internal controls is cheaper and more effective than detecting a crime.
Beginning this year, corporations must report on their corporate tax return if they are required to file Form 1099 and whether they have filed all that are necessary. The IRS added the following question to the 2011 return in order to better track the 1099s that are not being filed:
a. Did the corporation make any payments in 2011 that would require it to file Form(s) 1099?
b. If Yes, did or will the corporation file all required Forms 1099?
You are required to file a 1099 for any service for which you paid more than $600 in the calendar year – including independent contractors, freelancers, lawyers and accountants.
If you have any questions or would like additional information, contact your Barnes Dennig representative at (513) 241-8313.
The Ohio charities and non-profits registration process has changed with the launch of the Online Charitable Registration System. The new system, which launched December 1, 2011, aims to eliminate the paper-based process of filing with the Ohio Attorney General. Moreover, the Online Charitable Registration System will increase transparency and accountability throughout the sector. You probably have received correspondence from the Ohio Attorney General’s office regarding registration of your charitable organization online.
This is a mandatory online registration. All exempt organizations that were previously required to file will now have to annually file online and submit payments electronically. Any organizations with year-ends ending after November 30, 2011, must register and file electronically. Organizations that have not filed their forms but have year-ends prior to November 30, 2011, are encouraged to register and file using the new system.
Barnes Dennig has always prepared the Ohio filing for its clients during the Form 990 preparation process, and we will continue to do this on an annual basis. However, you must complete the initial registration for your organization.
Click here to register through the Ohio Attorney General’s office. For more information on the registration process and the new system, you can click here to download a user’s guide from the Ohio Attorney General.
For more information on this or any non-profit tax matters, contact your Barnes Dennig representative at (513) 241-8313.
