MBA for Non-Profits Understanding Non-Profit Financial Statements Part I

Size: px

Start display at page:

Download "MBA for Non-Profits Understanding Non-Profit Financial Statements Part I"

Felicia Shepherd
6 years ago
Views:

Thirteenth Annual Career Strategies Conference September

1 MBA for Non-Profits Understanding Non-Profit Financial Statements Part I Corporate Counsel Women of Color Thirteenth Annual Career Strategies Conference September 27, 2017 Copyright 2017 Deloitte Development LLC. All rights reserved. 1

2 Overview of Tax-Exempt Entities Agenda Types of Exempt Organizations History/Background of Tax Exempt Organizations Tax Exemption Application Process IRC 501(c)(3) Organizations Copyright 2017 Deloitte Development LLC. All rights reserved.

3 Types of Exempt Organizations

4 Overview: Tax-Exempt vs. Non-Profit Org 4 What is the difference between tax-exempt and non-profit organizations? Non-profit status A state law concept May make an organization eligible for certain benefits, such as state sales, property, and income tax exemptions. Tax-exempt status Defined as exempt from federal income tax under the Internal Revenue Code May be required to apply for federal tax exemption A tax-exempt organization may be organized as a trust, corporation, association Many tax-exempt organizations are nonprofit under state law, but not all nonprofits are necessarily tax-exempt Copyright 2017 Deloitte Development LLC. All rights reserved. 4

5 5 Overview: Non-Profit Corporate Governance What is a Non-profit? Entity types Board/Management Structure Duties and Obligations Role Responsible for Oversight financial, legal, ethics and compliance Safeguarding the assets of the organization Fiduciary Duties Reasonable Care Obedience Loyalty Member Requirements and Rights

6 Tax Exempt Status 6 Defined as exempt from federal income tax under the Internal Revenue Code (IRC) Examples Include: 501(c)(3) Charitable, religious, and educational organizations 501(c)(4) Civic leagues and social welfare organizations 501(c)(5) Labor/agricultural/horticultural organizations 501(c)(6) Business and professional leagues 501(c)(7) Social and recreational clubs 501(c)(8) Fraternal beneficiary societies 501(c)(9) Voluntary employee beneficiary associations (VEBA) 501(c)(19) Veterans organizations 501(c)(2) and (25) Property holding organizations Copyright 2017 Deloitte Development LLC. All rights reserved. 6

7 IRC 501(c)(3) Most commonly, entities are exempt under IRC 501(c)(3), meaning they are: Organized and operated exclusively for charitable, religious, and educational organizations No part of net earnings inures to the benefit of any private person No substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation and it may not participate in any campaign activity for or against political candidates Can you think of some examples? Copyright 2017 Deloitte Development LLC. All rights reserved. 7

8 History/Background of Tax Exempt Organizations

9 History of Tax Exempt Organizations Early tax exemption regulations developed around 3 major principles: Organizations that operated for charitable purposes were granted exemption from the Federal income tax Charitable organizations were required to be free of private inurement An income tax deduction for contributions was developed Hospitals have never been separately listed in the IRC as a type of exempt organization Corporations were able to claim the charitable deduction beginning in 1936 Copyright 2017 Deloitte Development LLC. All rights reserved. 9

History of Tax Exempt Organizations Revenue Act of 1950 Congress established the

organizations Tax Reform Act of 1969 Created the special rules for private foundations (i.

on selfdealing, jeopardizing investments, taxable expenditures) Increased charitable

for the first time) Income from debt-financed real estate saleleaseback activities was

deductible Expanded taxation of debt-financed income to include forms of income other

10 History of Tax Exempt Organizations Revenue Act of 1950 Congress established the Unrelated Business Income Tax (UBIT) Tax exemption no longer permitted to feeder organizations Tax Reform Act of 1969 Created the special rules for private foundations (i.e. annual excise tax on net investment income, minimum distribution requirements, taxes on selfdealing, jeopardizing investments, taxable expenditures) Increased charitable deduction limits for individuals Expanded taxpayers subject to UBI (including churches for the first time) Income from debt-financed real estate saleleaseback activities was subject to UBIT Sharpened definitions of the organizations to which contributions were deductible Expanded taxation of debt-financed income to include forms of income other than rents from real estate sale-leaseback arrangements Copyright 2017 Deloitte Development LLC. All rights reserved. 10

11 History of Tax Exempt Organizations Recent legislative changes Taxpayer Bill of Rights II (1996) which added the Intermediate Sanctions Rules (IRC 4958) Taxpayer Increase Prevention and Reconciliation Act (2005) created an excise tax on prohibited tax shelter transactions (IRC 4965) Pension Protection Act of T publicly available Changes in private foundation excise tax rates Definition of Type I, Type II and Type III supporting organizations (including functionally integrated and other) Health Care Reform (2010) New requirements for tax-exempt health care providers Added IRC 501(r) Copyright 2017 Deloitte Development LLC. All rights reserved. 11

12 Tax Exemption Application Process

13 Tax Exemption Application Process 13 Create organization Corporation Trust Association Apply for tax exemption, as applicable (Form 1023) Obtain an EIN Separate requirements and more detailed process Organizing documents User fees Respond to IRS follow-ups, if applicable Receipt of Determination Letter from IRS If denied, appeal process available OR: Listing in a group exemption, such as the Official Catholic Directory Ongoing Compliance and/or Significant Events Public Disclosures

Applying for Tax Exemption Form 1023 Used to obtain IRC 501(c)(3) status If Form 1023 is filed within 27 months after the end of the month in which an organization is legally formed and the

14 Applying for Tax Exemption Form 1023 Used to obtain IRC 501(c)(3) status If Form 1023 is filed within 27 months after the end of the month in which an organization is legally formed and the application is approved by the IRS, the legal date of formation will be the effective date of the organization s exempt status. Some organizations are required to file for exemption. If approved, only IRC 501(c)(3) applications are open for public inspection. Copyright 2017 Deloitte Development LLC. All rights reserved. 14

15 IRC 501(c)(3) Organizations

16 Organizing and Operating a IRC 501(c)(3) Organization 16 IRC 501(c)(3) organizations are organized and operated exclusively for one or more of eight exempt purposes: Relief of poor and distressed or of the underprivileged Advancement of religion Advancement of education or science Erection or maintenance of public buildings, monuments or works Lessening the burden of government Promotion of social welfare Copyright 2017 Deloitte Development LLC. All rights reserved. 16

17 Qualifications for IRC 501(c)(3) 17 To be recognized as tax exempt under IRC 501(c)(3), an entity must meet the following tests: Examples Include: Organizational test Operational test No private inurement Incidental private benefit No political campaigning Only insubstantial lobbying Copyright 2017 Deloitte Development LLC. All rights reserved. 17

18 Organizational Test 18 The entity must be properly organized. The organizing documents must: Limit the organization s purposes to one or more of the exempt purposes listed in IRC 501(c)(3) Must not enable it to engage in more than an insubstantial part of its activities in activities that are not in furtherance of one or more exempt purpose Assets must be permanently dedicated to an exempt purpose. Therefore, if the organization dissolves, the assets must be distributed for an exempt purpose An organization s assets will be considered dedicated to an exempt purpose, for example, if, upon dissolution, such assets would, by reason of a provision in the organization s articles or by operation of law, be distributed for one or more exempt purposes, or to the Federal government, or to a State or local government, for a public purpose, or would be distributed by a court to another organization to be used in such manner as in the judgment of the court will best accomplish the general purposes for which the dissolved organization was organized. Copyright 2017 Deloitte Development LLC. All rights reserved. 18

19 Operational Test 19 Organization must show that it will engage primarily in activities that further its exempt purposes. IRC 501(c)(3) and Reg. IRC 1.501(c)(3)-1 state that: The organization must be operated exclusively for charitable purposes. No part of the organization s net earnings can inure to the benefit of private shareholders or individuals. No substantial part of the organization s activities can attempt to influence legislation. Organization cannot participate or intervene in any political campaign for or against a candidate for public office. Copyright 2017 Deloitte Development LLC. All rights reserved. 19

20 Private Inurement A IRC 501(c)(3) organization s net earnings may not inure, in whole or in part, to the benefit of any private shareholder or individual. Private inurement occurs when there is a transaction or exchange with an individual with a personal interest ( an insider ) by which the insider acquires economic gain through the use of the organization s funds/assets. In some cases private inurement is permissible but only if reasonable. An insider as defined as a person who has personal and private interest in (and/or influence over) the activities of the organization. Courts and the IRS has viewed this to include officers, directors, certain key employees, major donors, family members of the above, etc. Inurement is an absolute term (no de minimis) and it is strictly prohibited in all IRC 501(c)(3) nonprofits. Inurement may lead to an organization losing its tax exempt status. Intermediate Sanctions were developed to allow the IRS a method of punishing the insider without revoking the organization s tax exempt status. Copyright 2017 Deloitte Development LLC. All rights reserved. 20

21 Private Inurement An excise tax may be imposed on certain persons who improperly benefit from an excess benefit transaction, as well as managers who know the tax is improper. IRC 4958 An excess benefit transaction is a transaction in which an economic benefit is provided by an applicable tax-exempt organization, directly or indirectly, to or for the use of a disqualified person, and the value of the economic benefit provided by the organization exceeds the value of the consideration received by the organization. The tax imposed is 25% of the amount of the excess benefit to be paid by the disquieted person. The tax imposed on the organization manager who knowingly participates in the transaction is subject to a separate excise tax of 10% of the excess benefit paid by an organization manager, up to $20,000 per act. Organization managers who knowingly participate in the transaction are jointly and severally liable for the 10% tax. However, a manager will not be liable if participation is not willful and due to reasonable cause. If the excess benefit is not corrected within the taxable period, a second-tier excise tax is imposed on the insider equal to 200% of the amount of the excess benefit. Copyright 2017 Deloitte Development LLC. All rights reserved. 21

22 Incidental Private Benefit Transaction between organization and an individual that furthers private interest rather than public interest. Permitted if incidental. Any private benefit from an activity must be incidental in both a qualitative and quantitative sense to the overall public benefit of the activity. Incidental The private benefit must be a necessary concomitant of the activity which benefits the public at large. Qualitative The private benefit is a mere byproduct of the public benefit. Quantitative The private benefit must be insubstantial in amount. Example: an organization formed to preserve and enhance a lake as a public recreational facility was operated for exclusively charitable purposes because the benefits would flow primarily to the community even though it would also benefit private home owners with lakefront property Copyright 2017 Deloitte Development LLC. All rights reserved. 22

23 Political Campaign Activity 23 The Articles of Organization must not authorize the organization to directly or indirectly participate or intervene in any political campaign on behalf of or in opposition to any candidate for public office. Making contributions to political funds Making public statements for or against candidates The prohibition of political campaign activity is absolute. Any violation will jeopardize the organization s IRC 501(c)(3) status. A 10% excise tax is imposed on a IRC 501(c)(3) organization for each political expenditure made. A separate 2.5% excise tax (up to $5,000) is imposed on any organization manager who agrees to the making of the expenditure if the manager knows that it is a political expenditure (unless not willful and due to reasonable cause). If the political expenditure is not corrected, a second-tier excise tax is imposed on the organization equal to 100% of the amount of the expenditure. Copyright 2017 Deloitte Development LLC. All rights reserved. 23

24 Lobbying Activity An organization will be denied IRC 501(c)(3) status if a substantial part of its activities consists of carrying on propaganda or attempting to influence legislation There are no specific guidelines as to what constitutes substantial lobbying activities. Instead, it is determined on the facts and circumstances of each case. The substantial part test looks at all the pertinent facts and circumstances. It considers a variety of factors, including (1) the time that both compensated and volunteer workers devote to lobbying and (2) the expenses the organization devotes to lobbying. As an alternative to the substantial part test, some charitable organizations may elect a sliding scale limitation on expenditures to objectively determine their permissible level of lobbying activities under IRC 501(h). Copyright 2017 Deloitte Development LLC. All rights reserved. 24

Lobbying Activity Under IRC 501(h), the basic permitted level for lobbying expenditures (but not grassroots lobbying) is 20% of the first $500,000 of the electing organization s exempt-purpose

25 Lobbying Activity Under IRC 501(h), the basic permitted level for lobbying expenditures (but not grassroots lobbying) is 20% of the first $500,000 of the electing organization s exempt-purpose expenditures for the year, 15% of the second $500,000, 10% of the third $500,000, and 5% of any additional expenditures with a maximum limitation of $1 million. An excise tax of 25% is imposed on any excess lobbying expenditures above these limits. If an organization s lobbying expenditures normally on an average over a four-year period exceed 150% of these limits, the organization will lose its tax-exempt status (Reg. IRC 1.501(h)-3). Copyright 2017 Deloitte Development LLC. All rights reserved. 25

26 Public Charity vs. Private Foundation 26 IRC 509 makes the statutory distinction between private foundations and public charities Differences Advantages and Disadvantages Maintain Status Copyright 2017 Deloitte Development LLC. All rights reserved. 26

27 This presentation contains general information only and Deloitte is not, by means of this presentation, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This presentation is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte shall not be responsible for any loss sustained by any person who relies on this presentation. About Deloitte Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee ( DTTL ), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as Deloitte Global ) does not provide services to clients. In the United States, Deloitte refers to one or more of the US member firms of DTTL, their related entities that operate using the Deloitte name in the United States and their respective affiliates. Certain services may not be available to attest clients under the rules and regulations of public accounting. Please see to learn more about our global network of member firms. Copyright 2017 Deloitte Development LLC. All rights reserved.

28 MBA for Non-Profits Understanding Non-Profit Financial Statements Part II Corporate Counsel Women of Color Thirteenth Annual Career Strategies Conference September 27, 2017 Copyright 2017 Deloitte Development LLC. All rights reserved. 28

30 Unrelated Business Income Tax

31 Unrelated Business Taxable Income Income from a trade or business that is regularly carried on by an exempt organization and that is not substantially related to the organization s exempt purpose. [IRC 512(a)(1) and IRC 513(a)] Copyright 2017 Deloitte Development LLC. All rights reserved. 31

32 Further Defined Trade or business that is regularly carried on any activity conducted for the production of income from selling goods or performing services. An activity must be conducted with the intent to profit to constitute a trade or business. An activity does not lose its identity as a trade or business merely because it is conducted within a larger group of similar activities that may or may not be related to the exempt purpose of the organization. Not substantially related to means the activity that produces the income does not contribute importantly to the exempt purposes of the organization, other than the need for funds, etc. Whether an activity contributes importantly depends in each case on the facts involved. Copyright 2017 Deloitte Development LLC. All rights reserved. 32

33 Statutory Exclusions from UBI Activity where substantially all the work is performed by volunteers Certain Bingo Games Activity primarily for the convenience of members. Selling of donated merchandise Copyright 2017 Deloitte Development LLC. All rights reserved. 33

34 Modifications IRC 512(b) Some common examples include the following: Dividends, interest and all deductions directly connected with dividends are excluded from UBI under IRC 512(b)(1) Royalties and all deductions directly connected with royalty income are excluded from UBI under IRC 512(b)(2) Rents from real property and rents from personal property which are incidental to a real property rental are excluded from UBI under IRC 512(b)(3), unless debt-financed Gains and losses from the sale, exchange, or other disposition of property other than (a) stock in trade or other property of a kind which would be includible in inventory; (b) property held primarily to customers in the ordinary course of business Copyright 2017 Deloitte Development LLC. All rights reserved. 34

35 35 Unrelated Business Income Tax (UBIT) Common Examples Income which is otherwise not taxable as UBTI can be taxable when received from controlled organizations under IRC 512(b)(13) Lab services to nonpatients Parking for persons other than patients, employees, visitors, etc. Income from S-corps under IRC 512(e) Research activities if results are not disseminated to the public Rents from personal property which are not incidental to rents from real property Sale of donor or membership lists Affinity credit card arrangements Income which is otherwise not taxable as UBTI is taxable when it is derived from debt-financed property under IRC 512(b)(4) (i.e. antenna revenue) Advertising sales in publications

36 Reporting

37 Annual Filing Requirements - Form 990 All tax-exempt entities must file the 990, 990EZ, or 990N (e-postcard) Financial information about the organization Failure to file for 3 years in a row results in automatic loss of tax-exempt status Threshold Form Gross receipts $50,000 Form 990 N (e-postcard) or Form 990 Gross receipts < $200,000 and assets < $500,000 Form 990EZ or Form 990 Gross receipts $200,000 and assets $500,000 Form 990 Unrelated Business Income Private Foundation Form 990T Form 990 PF Copyright 2017 Deloitte Development LLC. All rights reserved. 37

Annual Filing Requirements - Form 990 38 Copyright

39 Financial Statements

40 Components of Audited Financial Statements The main financial statements required by US Generally Accepted Accounting Principles (US GAAP) include the following: Independent Auditors Report Statement of Financial Position (Balance Sheet) Statement of Activities (Income Statement) Statement of Cash Flows Footnotes to the Financial Statements Copyright 2017 Deloitte Development LLC. All rights reserved. 40

41 What are key financial statement assertions? Financial statement assertions for Balance Sheet accounts: Existence Rights and obligations Completeness Valuation and allocation Financial statement assertions for Income Statement accounts: Occurrence Completeness Accuracy Cutoff Classification Financial statement assertions for Disclosures: Occurrence and rights and obligations Completeness Classification and understandability Accuracy and valuation Copyright 2017 Deloitte Development LLC. All rights reserved. 41

42 Independent Auditors Report Audit firm indicates that the financial statements and footnotes as presented are fairly stated and materially correct based on their audit Also referred to as the Auditors Opinion General standard is obtaining reasonable assurance the financial statements are free from material misstatement and to express an opinion on whether the subject matter is fairly presented in accordance with generally accepted accounting principles (GAAP). The audited financial statements are not prepared by the auditors, but instead are management s financial statements. It is the responsibility of the Controller s office to prepare the financial statements and all footnotes in accordance with GAAP, and a thorough review by management takes place. Auditors assess what is in the financial statements and owns the opinion pages. Copyright 2017 Deloitte Development LLC. All rights reserved. 42

43 Statement of Financial Position A nonprofit's statement of financial position reports the organization's assets and liabilities in some order of when the assets will turn to cash and when the liabilities need to be paid. The amounts are as of the date shown in the heading which is usually the end of a month, quarter, or year. A snapshot of assets and liabilities as of a specified date Assets - include cash, investments, fixed assets, prepaid expenses and receivables The net assets section of a nonprofit's statement of financial position reports totals for each of the following classifications: Unrestricted net assets Temporarily restricted net assets Permanently restricted net assets Copyright 2017 Deloitte Development LLC. All rights reserved. 43

44 Statement of Financial Position Net Assets concept unique to non-profit financial statements. Is equal assets less liabilities and are categorized by donor restrictions on assets: Unrestricted no donor restriction exists, or has previously been met. This category also includes assets added to the endowment at the direction of the Board of Directors that are designated for a specific use ( quasi-endowment ) Temporarily restricted net assets that are either time or purpose restricted by the donor Permanently restricted in accordance with donor stipulation, will be invested in perpetuity in order to generate income to support donor-specified programs or operations ( permanent endowment ) Copyright 2017 Deloitte Development LLC. All rights reserved. 44

45 Statement of Financial Position Key Metrics to Consider: Debt to Net Assets Working capital: Current assets Current liabilities Current ratio: Current assets to Current liabilities Copyright 2017 Deloitte Development LLC. All rights reserved. 45

46 Statement of Activities Details the revenues earned and expenses incurred over the course of a particular time period Statement is split between operating and non-operating results Operating revenues and expenses include items generated in the regular course of the Institute s operations (admissions, museum education programming, memberships, contributions, spendable income, etc.). Unrestricted revenues and expenses categorized as operating will generally align with the Institute s internal budget. Non-operating revenues and expenses may include items that are outside of normal operations. May include investment returns in excess of the spendable, pension-related changes, and art purchases and sales. Copyright 2017 Deloitte Development LLC. All rights reserved. 46

47 Statement of Activities A nonprofit's primary purpose is to provide programs that meet certain societal needs, it issues a statement of activities. The statement of activities reports revenue and expense amounts according to the three classifications of net assets previously discussed. Activities are also categorized by donor restriction (unrestricted, temporarily restricted, and permanently restricted) and reflect a release of restrictions between categories when donor restrictions are met. Results for the year are labeled as Change in net assets (referred to as net income in for-profit financial statements) Change in unrestricted net assets from operations operating results which is generally what is compared to internal budget Copyright 2017 Deloitte Development LLC. All rights reserved. 47

48 Statement of Activities Key Metrics to Consider: Program Expenses to Total Operating Expenses Fundraising Ratio Operating Expenses Supported by Endowment Copyright 2017 Deloitte Development LLC. All rights reserved. 48

49 Statement of Cash Flows Reconciles the change in net assets to the change in cash position for the year Key items include contributions restricted for endowment, contributions restricted for capital campaign, and payments on/proceeds from debt issuance Copyright 2017 Deloitte Development LLC. All rights reserved. 49

50 Why do you need an audit? 50 It is required or heavily relied upon by various interested parties in making decisions about your organization: Bankers IRS for annual reporting State Attorney General for maintaining charitable status Donors (including government granting agencies) Charitable watchdog groups Trustees for fiduciary responsibility Copyright 2017 Deloitte Development LLC. All rights reserved. 50

51 Footnotes Provide information about the organization s activities and the accounting policies that serve as the basis for the financial statement preparation. Additional detail on key financial statement line items are included in the footnotes: Investments, including liquidity, valuation and portfolio breakdown Endowment, including endowment investing and spending policies and underwater funds Debt, including dates debt comes due Pension liability and assumptions Copyright 2017 Deloitte Development LLC. All rights reserved. 51

52 Why Is Understanding the Risk of Material Misstatement Important? One of the objectives of an audit, is to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error. Copyright 2017 Deloitte Development LLC. All rights reserved. 52

53 What is a Risk of Material Misstatement? The risk that the financial statements are materially misstated prior to audit. This consists of two components, described as follows at the assertion level: Inherent Risk The susceptibility of an assertion about a class of transaction, account balance or disclosure to a misstatement that could be material, either individually or when aggregated with other misstatements, before consideration of any related controls. Control Risk The risk that a misstatement that could occur in an assertion about a class of transaction, account balance or disclosure and that could be material, either individually or when aggregated with other misstatements, will not be prevented, or detected and corrected, on a timely basis by the entity s internal control. [ISA ] [PCAOB AS 8.5, PCAOB AS 8.7] Risks of material misstatement are identified at the financial statement and relevant assertion level to provide the basis for further audit procedures. Copyright 2017 Deloitte Development LLC. All rights reserved. 53

Lacy L. Durham Senior Manager Deloitte Tax LLP 2200 Ross Avenue, Suite 1600 Dallas, Texas 75201 USA Tel: +1 214 840 1926 Fax: +1 214 756 9714 www.deloitte.

54 Lacy L. Durham Senior Manager Deloitte Tax LLP 2200 Ross Avenue, Suite 1600 Dallas, Texas USA Tel: Fax: About Deloitte Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee ( DTTL ), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as Deloitte Global ) does not provide services to clients. In the United States, Deloitte refers to one or more of the US member firms of DTTL, their related entities that operate using the Deloitte name in the United States and their respective affiliates. Certain services may not be available to attest clients under the rules and regulations of public accounting. Please see to learn more about our global network of member firms. Copyright 2017 Deloitte Development LLC. All rights reserved.

55 DEBRA HATTER PARTNER M&A Fannin Street Suite 2300 Houston, TX

56 This presentation contains general information only and Deloitte is not, by means of this presentation, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This presentation is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte shall not be responsible for any loss sustained by any person who relies on this presentation. About Deloitte Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee ( DTTL ), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as Deloitte Global ) does not provide services to clients. In the United States, Deloitte refers to one or more of the US member firms of DTTL, their related entities that operate using the Deloitte name in the United States and their respective affiliates. Certain services may not be available to attest clients under the rules and regulations of public accounting. Please see to learn more about our global network of member firms. Copyright 2017 Deloitte Development LLC. All rights reserved.

TAX-EXEMPT ORGANIZATIONS: EFFECTIVE GOVERNANCE AND LEGAL COMPLIANCE VICTOR J. FERGUSON SUZANNE R. GALYARDT VORYS, SATER, SEYMOUR AND PEASE LLP

TAX-EXEMPT ORGANIZATIONS: EFFECTIVE GOVERNANCE AND LEGAL COMPLIANCE VICTOR J. FERGUSON SUZANNE R. GALYARDT VORYS, SATER, SEYMOUR AND PEASE LLP OVERVIEW 1. Organizational Test 2. Operational Test 3. Private