990 Schedule B Schedule of Contributors

Tuesday May 10, 2022 comments

Any accounting business and tax advice contained in this podcast is not intended as a thorough in depth analysis of specific issues. Nor is it a substitute for format information. Nor is it sufficient to avoid tax related penalties. If you have specific questions that you need advice for, be sure to schedule a strategy session and not solely rely on information in this podcast.

Hey, this week, we are talking about the Schedule B for IRS Form 990. So Schedule B is the schedule of contributors. It is where you tell the IRS who gave you what and it’s going to include their name, it's going to include their address, it's going to include if they're a person, or, this might be a business, if it was a payroll deduction, or if it was a non cash gift. The other thing that's going to be included here is just a breakdown. 

When it talks about the non cash gift, you're going to be able to give more details about that. What I'm going to focus on though, for today is going to be on that beginning piece of what's included in terms of their name, their address, and the value. One of the things that comes up on an often enough basis is anonymous gifts. If you don't know who gave you the money, you can't disclose it. But if someone does know, you have to disclose it. If the donor says they want to be anonymous for publications, that is fine. 

They are not anonymous to the IRS though because you do have their information you do know, oh Chyla gave us this money, Chyla’s address is this, this is what we're going to put in there. If however, you truly got an anonymous gift, you don't know where it came from, it just magically appeared in your bank account. There is no information. And so it's anonymous, in turn, you would not be able to disclose this information. So that is one of the things that I would operate under is do you have people's contact information or not? 

The next piece is the value of things. And so this is why it's important when people give you a non cash donation, this includes investments that you have a method for assessing the value. So if they give you investments, that's non cash, you would say okay, well, what's the market value when they gave us this gift?

If this is a gift, you're converting over to cash, yeah, that's gonna be easy enough to tell when you do the sale. If however they are doing, maybe they're giving you food donations, that's when you're gonna use poundage. 

Typically, you're gonna say, what's the value of these pounds. And this is where you want to decide what is going to be our barometer for how we measure this, most small organizations don't have the capacity to say like, we did this really in depth analysis of our poundage, and we did some calculations to determine this. You might decide we're gonna check what Feeding America is doing and last I checked, I think the last time I checked would have been 2020, Feeding America's value per pound was $1.74. You would want to put that in your documentation, though, how you came up with this valuation. 

So don't take my word for it, go to the actual source and say, what are they doing so that you can use that information. If they are donating a truck, you want to look at the value of the truck, so that you can use that in your records. To say this is the value of the truck, you don't want to purely take the donor word on what it's worth, you want to get your own assessment, the donor will work out what it's worth with their own accountant, you do your own independent verification of what could this be worth? Would I be able to sell it? What does Google say? What does an appraiser say? That's that piece about the schedule of contributors and what it is, what you're putting in. 

The other thing I wanted to mention, though, the 990 is a public document. So it's open. It's available for public inspection. Depending on how your tax preparer does it, they can give you a public disclosure copy. So a public disclosure copy gives you all the information that the 990 is being reported to the IRS because they need everything. You can't withhold some pieces from that address. However, the public disclosure copy would give you a redacted version of your schedule of contributors; it would not include your contributors names and their address. This is really helpful if this is something you're going to put on your website, or if it's something that you are giving out to people, especially if you had donors who wanted to remain anonymous, you want to give redacted information. 

If you have donors who want to be redacted, just know that people can still bypass you and go straight to the IRS and ask for a copy. And if they did that, they bypassed you. Or if they went to GuideStar, who's pulling your return from the IRS, if they bypass you that information is not going to be redacted. So you do want to make sure that in your 990, or on your website, if you say that it's going to be available, you can say, okay, it's gonna be the public disclosure, cuz I'd rather people come to your organization and get a copy than go around you and get donor information if that's not something you wanted to give up. So that is the piece that I really wanted to dig into for the schedule of contributors. Again, this is one of the ones that can be typically overlooked. 

The benchmark for this schedule is if people are giving you at least 5000. So it's 5000 or a percentage, like if you're getting such big donations like 5000 becomes too slow. But thresholds for most of the organizations we work with, we use 5000 as the bar that way as we need to do your return, the return will typically self select which people don't need to be on it because of your revenue thresholds. 

So I hope that was helpful for you. I hope that you are able to really think about how you want to present the copies that you give out to the public, if you're just gonna give them the same copy the IRS gives them or if you're gonna give them a public disclosure copy. You do want to make sure it says public disclosure copy on it so that they know this is intentionally redacted and it doesn't look like these people did not send the IRS the right information. All right. This has been another episode of The Nonprofit ACE Podcast. I'm your host, Chyla Graham. 

Be sure to follow us on social media. We are CNRG Accounting out on social media, and subscribe wherever you are tuning in. And I'd love a review so if you can give me some feedback. What do you love about the show? What would you like to see different? I would be open to that. We're looking at some changes in the future and so be sure to give me some info.

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