September 12, 2011

Greetings!

Stay connected with the legal and financial issues affecting Community Action Agencies. CAPLAW's E-News Bulletin is a continuing series of resources and information on current legal and financial topics of interest to CAAs and professionals working with CAAs.

Inside this issue:

• Financial Sustainability Tools

• Nonprofit Accounting Resources

• Fundraising Tools

• Dealing with "Bad Apple" Employees

• Who is an Employee of Your CAA?

• Retirement Benefits Update: Filing an Extension
  

Financial Sustainability Tools:
Tackling the Operating Reserves Challenge

Cash on hand, liquid assets, unrestricted net assets, rainy day fund, or nest egg – no matter how you describe it, the facts are the same, CAAs and other nonprofits that rely on government funds as their primary revenue sources are more likely to lack adequate operating reserves to safeguard their organizations in time of financial uncertainly. While some CAAs may feel stuck on a cost-reimbursement treadmill and wonder if a reserve is even possible, there are “ways out” including: development of private donor support; mastering the art of recovering indirect costs on foundation grants; development of fee based activities; or negotiation of government contracts on a pay for performance basis—without the lose/lose provision that structures the agreement as both pay for performance and cost reimbursement!

If your CAA is ready to tackle the operating reserves challenge and needs help convincing your board or wants guidance in accumulating and managing reserves, your starting point is the Operating Reserves Policy Toolkit for Nonprofit Organizations by the Nonprofit Operating Reserve Initiative. The Initiative, co-sponsored by the National Center for Charitable Statistics/Urban Institute and United Way Worldwide, draws upon the expertise of a diverse Working Group of nonprofit leaders, capacity builders, and financial advisors.

In the toolkit, you will learn how to:

• Convince your board of the compelling need to establish an operating reserve fund

• Determine an adequate operating reserve for your CAA

• Draft a written operating reserve policy
  Manage the reserve and report its balance
  
  

Nonprofit Accounting Resource

If you are having trouble getting your head around basic accounting concepts, we recommend spending some time with the Nonprofit Accounting Basics website provided by the Greater Washington Society of CPAs Educational Foundation.

Fundraising Tools

Looking for some fundraising inspiration, advice and/or tools? Check out the Grassroots Fundraising Journal by the Grassroots Institute for Fundraising Training. The most recent issue of this journal offers insight into how to building donor relationships that will last a lifetime.

Dealing with “Bad Apple” Employees

It is tough for employers to figure out the best way to deal with those employees that are repeat offenders – they are unreliable, unwilling to take direction, behave badly and bend the rules! A recent article by the labor and employment law firm, Fisher & Philips LLP, titled Problem Employees? Here’s a Solution offers a new approach for dealing with the age old problem of the “bad apple” employee.

Who is an Employee of your
nonprofit CAA?

Determining whether an individual performing work for your nonprofit CAA is an employee, volunteer or intern may be tricky. If individuals are misclassified, an employer may face crippling liabilities under the Fair Labor Standards Act (FLSA). To avoid a misstep in classifying individuals working for your CAA, check out a recent article by the law firm, Venable LLP, titled A Nonprofit’s Guide to Properly Characterizing as Employees, Interns and Volunteers.

Retirement Benefits Update: Filing Extension for Form 8955-SSA

The Internal Revenue Service (IRS) recently issued a filing extension for the new form used to report information about separated plan participants with deferred vested benefits under an employee benefits plan. The new form, referred to as Form 8955-SSA, is to be used for Plan Year 2009 filings and thereafter. According to the IRS, the new due date for filing the 2009 and 2010 Forms 8955-SSA “is the later of (1) January 17, 2012 or (2) the due date that generally applies for filing the Form 8955-SSA for the 2010 plan year.” The information captured by Form 8955-SSA is given to the Social Security Administration (SSA) which, in turn, provides it to separated participants when they file for social security benefits.

Originally, Form 8955-SSA reporting was a part of the Form 5500. The Form 5500 provides employee benefit plans with a way to satisfy a myriad of annual reporting requirements while ensuring that such plans are operated and managed in accordance with certain prescribed standards and that the rights and benefits of plan participants and beneficiaries are protected.

The law firm, Fisher & Phillips LLP, offers an article titled Filing Due Date Extended For Form 8955-SSA which briefly details the history of the Form 8955-SSA and the implications of this filing extension. Additional information about the Form is available at the IRS website.

About CAPLAW

CAPLAW is dedicated to providing the legal and financial resources necessary to sustain and strengthen the national Community Action Agency network. Through its in-house legal staff and a network of private attorneys, CAPLAW provides legal consultation, training, and publications on a wide variety of legal and management topics, enabling CAAs to operate legally sound organizations, thereby enhancing CAAs' ability to provide the nation's poor with opportunities to improve their quality of life and achieve their full potential.

© Copyright 2011 CAPLAW | www.caplaw.org | 617.357.6915

..........................................................................................

This e-News Bulletin is part of the National T/TA Strategy for Promoting Exemplary Practices and Risk Mitigation for the CSBG program and is presented by Community Action Program Legal Services, Inc. (CAPLAW) in the performance of the U.S. Department of Health and Human Services, Administration of Children and Families, Office of Community Services Cooperative Agreement Numbers 90ET0429, 90ET0432. Any opinion, findings, and conclusions, or recommendations expressed by this publication do not necessarily reflect the views of the U.S. Department of Health and Human Services, Administration of Children and Families.