New AICPA Technical Practice Aids for Not-for-Profit Organizations Clarify GAAP-Conformity for Reporting Fundraising Expense
(September 14, 2007)

Three new AICPA Technical Practice Aids (TPAs), available free of charge at http://aicpa.org/download/acctstd/TIS6100_21_22.pdf, help ensure that not-for-profit organizations (NPOs) report their fundraising expenses in conformity with GAAP.

“Using the TPAs, CPAs can play a key role in guiding their not-for-profit clients and employers in producing GAAP-compliant financial statements," said Dan Noll, AICPA Director of Accounting Standards.

The TPAs largely clarify the reporting requirements of fundraising expenses.  For example, it would be unusual for an NPO to obtain contributions at little or no expense, though the TPAs provide examples of circumstances in which this could happen. 

They also explain how an NPO should report charges from a professional fundraiser for soliciting contributions— the NPO should report the charges gross, as a fundraising expense.  Additionally, the TPAs describe situations in which a reporting NPO compensates another for acting as its fundraising agent or intermediary.  In these cases, the reporting NPO should report this compensation as a fundraising expense.

The AICPA issues TPAs and other technical advisories to enhance CPAs’ ability to comply with accounting standards and exercise optimal professional judgment. More information is available at www.aicpa.org/Professional+Resources.