Non-Profits

Non-Profit Accounting & Consulting

There are a number of common misconceptions regarding non-profit organizations, including the idea that tax-exempt companies do not require traditional accounting and consulting services. While a non-profit’s accounting responsibilities are different from those of a for-profit business, they are essential to the health and longevity of your organization. If you run a non-profit organization, your main goal is to make a difference, and it’s likely that the last thing you’re interested in is worrying about your books on top of everything else you have on your plate. It’s also important to be aware that many traditional CPAs may be unfamiliar with the nuances and unique challenges that a non-profit faces in terms of accounting practices and requirements – reporting methods are different, budgeting needs can be more complex, and dealing with the specifics of tax exemption can be tricky. Fortunately, The ALG Group has an extensive background in serving the accounting and tax related needs of tax-exempt organizations. We can help you properly manage your funds, provide sound financial advice, and help you prepare for the future so that more money goes to feeding your mission. When you partner with The ALG Group, we can:

  • Prepare Financial Statements & Reviews: While for-profit businesses are required to produce a balance and income statement that lists items like equity, company stock, gains and losses, non-profit reporting differs. Instead, The ALG Group will create a Statement of Financial Position, which details all your net assets, including, a list of all assets owned, their values, and the values of all debts owed. In addition, our team will prepare a Statement of Activities, which details all your revenue, minus expenses.
  • Budgeting: While budgeting can present a challenge to any organization, when it comes to non-profits, there are a number of unique complexities that must be addressed, including overlapping categories and constant modifications that must made to ensure all programs and activities are properly carried out. It may seem like there’s never enough money to support your non-profit’s mission, but when The ALG Group prepares your budget, we can help you put a plan in place to accomplish all the goals you set for the fiscal year.
  • Cash Flow Statement: Just like any other organization, having a snapshot of your cash flow is imperative to understanding your non-profit’s financial health. The ALG Group can analyze your accounts and create a report detailing all the money entering and leaving your organization during a specific time period. We will organize it into three sections: operating, investing, and financing activities. This will give you a clear picture of where your revenue flows, allowing you to determine your efficiency, and better plan for future spending.

Government Compliance Services for Non-profits

501(c)(3) classified organizations are required to submit annual filings to the IRS to maintain tax-exempt status and avoid noncompliance penalties. If you fail to submit the appropriate Form 990 along with the required documents, the IRS could immediately revoke your tax-exempt status. With your tax-exempt status at stake, we understand that as a non-profit organization you need a partner that you can reply on. Not only do we have a long-standing history serving non-profits with their accounting and auditing needs, but The ALG Group’s experts are your top choice to ensure that you aren’t in violation of non-profit specific tax code. We are here to handle all of your IRS reporting for you, including the annual submission of Form 990 and its relations, including:

  • Income Statement
  • Balance Sheet
  • Functional Expense Statement
  • Individual Program Expense Statement
  • Revenue Support Schedules

Acquiring & Maintaining Tax-Exempt Status

Creating and sustaining a non-profit organization requires more than the desire to make a difference. The key to success is a solid financial plan to ensure your organization remains in good standing with the IRS. Non-profit accounting and tax assistance can be hard to find due to the nuances associated with non-profits, but you’re in the right place! The ALG Group has long-term experience guiding both new and existing non-profits through IRS requirements. We can help you acquire and maintain tax-exempt status, along with any other tax or financial assistance your organization may require.

We will assist you with:

  • Initial Incorporation and Filing: before you submit your 501(c)(3) application we’ll help you file articles of incorporation at the state level. We will help you obtain an FEIN, prepare, and submit your incorporation request.
  • Applying for a 501(c)(3) Tax Exemption: Once you have received your certificate of incorporation, The ALG Group will prepare and electronically file your Form 1023 series application. We will work with you to provide full financial documentation, board member information, and the appropriate IRS submittal fee.
  • Obtaining State Compliance: When the IRS approves your application for tax-exempt status, you will receive a letter of determination. Our next step is to register your organization to receive charitable donations in your state, and apply for state tax-exemption.
  • Revocation of Exemption: If your tax-exempt status is revoked, you are no longer eligible to receive tax-deductible contributions and may be required to pay corporate income tax. The ALG Group can determine what you owe the IRS and assist you in preparing and submitting the proper form and accompanying documentation based on your situation.
  • Reinstating Tax-Exempt Status: The IRS can revoke tax-exempt status for a number of reasons, including too much unrelated income or failure to submit annual filings. There are limited circumstances under which the IRS will grant a reinstating of tax-exempt status, and your chances are slim unless you have a professional guiding you through the process. Your ALG Group expert can ensure that your organization meets the proper requirements, prepare and submit your application, and provide representation so you don’t even have to talk to the IRS!

AUDITS, REVIEWS AND COMPILATIONS

Some states require non-profit organizations to perform annual audits to verify their charitable status, and even if your state does not, choosing not to conduct some sort of analysis or report on your institution’s financial practices could render you ineligible for funding; in other words, a charitable organization’s worst nightmare. There are numerous “charity watchdogs” that rate non-profits, and choosing not to undergo and publish the findings of an audit could result in you winding up on their “do not donate” list. In addition, executing an audit can be a great way to show the public your commitment to financial transparency and assist in building a reputation of integrity and professionalism. The ALG Group knows that as a non-profit, your budget is always tight, so it may be tempting to execute the audit yourself in order to save money. However, doing so does not provide the highest level of assurance to your board and the public that the resulting financial statements are free of discrepancies. Our team of specialized, non-profit financial experts has extensive experience in performing all levels of audits for non-profits. We provide assistance with the following:

  • Non-Profit Audits: An audit is an investigative report that provides an accurate picture of your organization’s financial standing, along with full assurance that all data has been analyzed and verified. This process can help you deter fraud, provide proof to your benefactors that donated funds are being used appropriately, and give your board confidence in your organization’s financial situation. When our team performs an audit we will review your internal controls, test selected transactions, and communicate with third parties in order to paint an accurate picture of your true financial and legal standing.
  • Non-Profit Reviews: While a review shares the purpose of an audit, it provides a lower level of assurance that the end report is free of misrepresentation, and therefore, requires less investigation and analysis on the part of the auditor. When our team performs a review of your organization, we apply analytical procedures to your financial statements and perform inquiries with your board. If our findings seem inconsistent we will then perform additional procedures. Lastly, we will compile a report of our findings, along with limited assurance that the information listed is accurate.
  • Non-Profit Compilations: A compilation is a report that details your financial records in a format that complies with accounting standards.  When our team prepares a compilation report, we do not examine your internal controls, analyze source documents, or provide assurance that the statements listed accurately reflect the financial position of your organization. This means that if you are searching for a more specific and verifiable picture of your non-profit’s financial health, a compilation is not the option for you. However, it is suitable for those who are looking to organize their records in a standard manner, or for organizations who need an analysis of their financial health under budgetary restrictions.

The ALG Group CPAs

We provide audit, tax and advisory services for numerous clients and multiple types of entities. Ouraudit practice focus is not-for-profit entities. In 2017, Charles K. Poor, CPA PC, founded in 1994,combined with ALG Tax Solutions to form ALG Group, CPAs. The firm has offices in Ann Arbor, Detroit,Howell, Lansing, Novi, Southfield and Troy. Our belief is that respect for employees and passion forclient service are the twin pillars of a successful business. As our staff and client base have grown overthe years, our service offerings have evolved accordingly – but always with a commitment to our clients,our people and the community. Our client satisfaction interview and engagement evaluation processhelp us ensure that we deliver exceptional service to clients, within the confines of professionalstandards.
We believe ALG Group, CPAs is the right choice for [Michigan Disability Rights Coalition] based on the depth of our qualifications:
  • Adding Value – Our goal is to add value to our client relationships by providing insight and ideasthat will help you provide assurance to the payers. In addition, we can provide guidance onother best practices based on our experience.
  • A Deep Well of Knowledge – Our CPAs have extensive experience with Uniform Guidance andgovernmental and not-for-profit auditing. We will provide a comprehensive, high quality audit.
  • Fieldwork Efficiency – We send experienced and well-trained staff, so you don’t have to answerbasic questions and teach our people about accounting for not-for-profit organizations.
  • Depth of Management Knowledge – We provide insightful and helpful ideas based onexperience gained from serving governmental and not-for-profit clients and clients requiringaudits in accordance with Uniform Guidance.
  • Service is a High Priority – Client service and accessibility are the hallmarks of our firm.
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Tax Assistance & Audits for Non-Profit Organizations from The ALG Group

A non-profit organization is defined as a business that has been granted tax-exempt status by the IRS because their work furthers religious, scientific, charitable, educational, literary, or public safety causes and purposes. These organizations must serve the public, either through goods, services, or both, i.e. churches, hospitals, universities, and charities. While non-profits are often driven by a passion to make a difference, these organizations must also be aware of strict IRS requirements that they must abide by if they want to retain their tax-exempt status. At The ALG Group, our specialists can not only help you prepare your 501(c)(3) application, but can help you submit the yearly requirements for tax exempt organizations. We go beyond traditional accounting, and help set your organization up for success through consulting, auditing, and compliance services that are customizable to your non-profit’s needs.

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