The Knowledge Center provides you access to hundreds of documents including
policies, procedures and a wealth of research on topics such as charitable gifts,
expense reimbursements, board governance, fringe benefits, and much more.
This text is provided with the understanding that ECFA is not rendering legal, accounting, or other professional advice or service. Professional advice on specific issues should be sought from an accountant, lawyer, or other professional.
15 Questions Nonprofit Board Members Should Be Able to Answer
If you serve as a nonprofit board member, we recommend that you review the organization’s Form 990 and be informed enough to answer these 15 questions.
Accountable Expense Reimbursement Plan – Sample Resolution for Ministries
When applied properly, expenses reimbursed through an accountable expense reimbursement plan do not result in taxable income. Here is a sample of an accountable plan.
Accounting for and Documenting Ministry Expenses
Outlines proper accounting and documentation of ministry expenses for a nonprofit and church.
Accounting for Contingencies
Outlines the proper accounting for contingencies
Accounting for Contributions Made to Nonprofits
Outlines the proper accounting treatment for contributions made by an organization to a nonprofit
Accounting for Thrift Stores
Outlines the proper accounting for thrift stores
Lists publications that include accounting information for nonprofit organizations
Agency (or Custodian) Funds
Outlines proper accounting treatment for non-gift assets an organization receives that are not legally its property, known as agency funds
Aim for Faithfulness Rather than Results!
What are we aiming for? Or in ministry terms, how do we define success? From our research, ministry leaders typically define success along one of two lines.
Outlines the importance of an audit committee charter and includes a link to a sample charter
Audit Committee Charter for Ministries
Sample Audit Committee Charter in Word format to revise and use.
Audit Committee Questions for Auditors
List of questions that a board of directors or audit committee should annually ask their auditors
Audit Your Disaster Relief Policies
Humanitarian nonprofits need to be prepared for a new level of scrutiny and transparency by developing or upgrading their existing policy regarding disaster response situations.
Audits, Reviews, and Compilations
Describes the three types of financial statement reports: audits, reviews, and compilations
Board-Designated Net Assets
Unrestricted net assets subject to self-imposed limits by action of the governing board, e.g., future programs, investment, contingencies, purchases, or construction of fixed assets, or other uses.
Borrowing Restricted Net Assets
Discusses the borrowing of restricted net assets for operational purposes
Publications that discuss nonprofit budgeting
Building the Oil Supply
Dr. John Zietlow outlines a strong biblical basis for carefully devised financial policies and establishing adequate cash reserves. As he says: “Financial health is a prerequisite for mission achievement. As you begin to build or rebuild your oil supply and stock or restock your storehouse, take confidence that God is your Source and He will supply all of your needs according to His riches in Christ.”
Cash Reserves Q&A for Nonprofits
Cash reserves question answered for nonprofits
Cash Reserves: How Much Is Enough?
For ministries, financial resources are limited. Determining how much cash reserves are needed can be difficult and often feels like a shot in the dark. This white paper outlines the necessary steps to determine the appropriate cash reserves and liquidity for your ministry.
Cell Phone Usage
Sample cell phone policy including a summary of the tax rules relating to cell phone expense
Changing Accounting Methods for Form 990 Reporting
Discusses proper accounting methods for Form 990 reporting and procedures to follow when changing accounting methods
Specific internal control procedures to follow when writing checks to best protect the assets of an organization and includes a list of publications that contain more information about disbursement controls
Clearly Communicating Ministry Financial Data
Boards and others need meaningful interpretation of ministry financial data
Club Membership Dues
Discusses the taxability of club dues paid on behalf of an employee by a nonprofit organization
Contributed Services and Use of Facilities
Outlines the accounting treatment, income tax treatment, and Form 990 presentation rules for contributed services and use of facilities
A charity may have an underlying sense that some contributions should be carefully reviewed before accepted.
Costs of Soliciting Contributed Services and Time
How to classify costs of soliciting contributed services and time
Could Your Ministry Use an Accountability Tune-Up?
While solid financial accountability systems take extra effort, they are important tools.
Credit Card Sample Policies and Procedures
Sample credit card policies and procedures document for a ministry
Credit Card Use by Ministry Staff
Discusses the use of ministry credit cards for ministry purposes
Current Assets and Current Liabilities
Defines and lists examples of current liabilities and current assets according to authoritative accounting literature
Directors and Officers Liability Insurance
Discusses importance of director’s and officer’s liability insurance and important policy characteristics
Disaster Planning Assumptions
It is amazing the level of risks that leaders in churches and parachurch organizations will take with people and resources in their congregations, their facilities, and in their broader “spheres of relationship.” Moreover, by leaders not identifying and addressing risks, they open themselves to situations that can compromise their own reputation and credibility.
Document Retention and Destruction Sample Policy
Discusses proper maintenance of corporate documents and records and outlines retention time periods for several categories of documents
Educational Assistance Programs
Outlines the types and tax implications of educational assistance programs
Embezzlement of Funds
Outlines steps a ministry should take if it detects embezzlement of funds
Employee Spousal Travel Policy
Care should be exercised when reimbursing the travel expenses of an employee's spouse
Employer Mandate: Does It Apply To My Ministry?
How do you know if your church or ministry is subject to the Employer Mandate under the Affordable Care Act? If so, what are the consequences? View this helpful resource prepared by GuideStone Financial Services for more information.
Expense Report Form
Expense report form (Excel document)
Expense Reports Can Kill!
Explores the importance of proper expense record keeping and includes expense-reporting guidelines
Financial Management Resources
Resources for financial management for churches and nonprofits
Financial Management Sample Policy and Procedure Handbook
Sample Financial Management Policy and Procedure Handbook
Financial Statements Matter
A discussion of financial statements and why they are important to prepare properly
Financially Interrelated Nonprofit Organizations
Outlines the accounting and reporting guidelines for nonprofits that are financially interrelated (SOP-94-3)
Five Ways to Make an Audit Easier
There are several reasons why a not-for-profit organization might undergo a financial audit.
Flexible Spending Account Chart
Form to track flexible spending account amounts withheld from payroll and medical expenses paid under the plan
Fraud – Warning Signs and Facts
Discusses fraud-related red flags to watch for
Fraud and Whistleblower Protection for Nonprofits
Discusses the whistle-blower protection provision contained in the Sarbanes-Oxley Act and its applicability to nonprofits as well as general misconduct, dishonesty, and fraud prevention
Fringe Benefit Planning
Maximizing the take-home pay for your ministry staff
Gifts to Ministry Staff
Nonprofit ministries often make gifts to employees to show appreciation for the dedicated service. These payments may take several forms and have important implications to the ministry, the staff members, and donors.
Give Your Financial Statements a Check-up
Take a walk through your financial statements and see if any of the most common financial statement mistakes apply to your organization.
Going Concern Contingencies
Defines going concern contingencies as the inability of an organization to meet its obligations as they come due, and outlines the conditions that lead to a going concern audit opinion
Overview of golf fundraisers and the proper accounting treatment for possible elements of such an event
Guidelines for International Grant-Making
Outlines the proper procedures and due diligence when making grants to international organizations
How many months of cash should our ministry have in reserve?
How many months of cash should our ministry have in reserve? Are there different categories of reserves we should consider?
How Much for Fundraising?
Discusses factors that may be considered when determining what is an appropriate amount of fundraising expense for a specific organization
How to Budget in a Changing Economy
If we've learned anything over the last three recessionary years, it's that as the economy changes, we need to change with it if our ministries are going to thrive.
Independent Auditor Sample Request for Proposal (RFP)
Sample request for proposal can be used by ministries to request proposals from independent auditors to perform the ministry’s audit
Internal Control and Internal Audit Guidelines for Schools
Guidelines for internal control and audit procedures
Investment Management Resources
Publications that discuss investment management for nonprofits
Investment of Permanently Restricted Net Assets in Real Estate
Discusses the propriety of investing permanently restricted net assets in real estate
Investment policies for nonprofits are board-created to determine and direct how funds are to be invested.
Is Now the Time to Refinance Your Ministry's Loan?
In this every-changing economy, ministry leaders frequently face the question: "Is now a good time to refinance?"
Is Your Organization Ready for the General Data Protection Regulation?
The General Data Protection Regulation, or GDPR, went into effect on May 25, 2018 and many nonprofit organizations don’t realize they could be impacted. The GDPR is a set of laws enacted by the European Union (EU) to protect individual rights to privacy and control over personal data.
Let’s Admit It – The Emperor is Naked: Functional Expense Reporting for Nonprofit Organizations is Voodoo
Measurement and Evaluation of an Organization’s Performance Should Not Be Based on Subjective Expense Allocations
Meals and Lodging Provided to Employees
When an employer provides meals and housing for employees, it is important to determine whether the value of the meals and lodging is taxable to the employees.
Missionary Travel Expense Form
Sample claim form for families traveling with dependent children
Overhead Assessments on Restricted Gifts
What limitations does a ministry have when applying an overhead assessment on restricted gifts?
Paying Counseling Fees for Employees
Outlines the proper tax treatment of counseling fees paid by an employer on behalf of its employee(s)
Per Diem Rates
Outlines lodging, meals, and incidentals per diem rates for business travel
Permanently Restricted Gift
A gift restricted in perpetuity by the donor.
Permanently Restricted Net Assets
The part of net assets for a nonprofit organization that is restricted in perpetuity by donor-imposed stipulations.
Personal Use of Ministry-Owned Vehicle Sample Policy
Policy for personal use of company vehicles
Personal Use of Ministry-Owned Vehicles
Vehicles provided by organizations to employees for business use are often used for personal purposes.
Policies Relating to the Payment of a Housing Allowance, First Class or Charter Travel, Spousal Travel, Gross-up Payments, Discretionary Spending, Health or Social Club Dues
Sample policies for first class travel, spousal travel and housing allowances
Pregnancy Resource Center – Chart of Accounts
Pregnancy resource centers often have specialized chart of accounts needs. This chart of accounts has been designed with these needs in mind.
Preparing for Disasters?
Taking the time, energy, and finances to prepare for natural or man-caused disasters is an investment. Preparing for the unexpected is the process of integrating readiness into all elements of ministry.
Purchase and Travel Cards
Certain credit cards may be used to restrict purchases to specific vendors (purchase card) or types of expenditures (travel card).
Qualified Audit Opinions
Details ECFA’s qualified audit opinion policy
Quality Financial Reporting
Outlines a nonprofit board’s responsibility for quality financial reporting
Quasi-Endowment Sample Policy
Starting a quasi-endowment program should begin with a sound policy.
Reclassifications of Net Assets
These are the simultaneous increases in one net asset class and decreases in another.
Recording Income from Estates
Explains the proper accounting and recognition criteria for estates contributed to nonprofit organizations
Rescue Mission Client Payments
Rescue missions often make modest payments to "clients" who participate in a spiritual transformation program at the mission. This document addresses the taxability of these payments.
Restatement of Prior-Period Financial Statements
Any error in the financial statements of a prior period discovered subsequent to their issuance should be reported as a prior-period adjustment by restating the prior-period financial statements.
Restricted Gifts for Employees
Discusses how restricted gifts for employees should be handled
Restricted Net Assets
Resources whose use is restricted by an outside agency or person.
A donor stipulation that limits the time or purpose of a gift’s use.
Rotation of Auditors and Audit Partners
Discusses the issues to consider concerning rotation of auditors and audit partners
Sample Grant Agreement
Sample wording of a grant agreement
Sample Policy on Suspected Misconduct, Dishonesty, Fraud, and Whistleblower Protection
Sample policy covering the whistleblower protection provision contained in the Sarbanes-Oxley Act
Sample Quid Pro Quo Charitable Gift Acknowledgment
Sample gift acknowledgement for a quid pro quo gift
Outlines the applicability and relevance of this law to nonprofits
Segregation of Duties
Outlines specific duties that should be segregated when handling cash and other revenues as well as when making expenditures
Selecting an Auditor
Suggests factors a nonprofit organization may consider when selecting an auditor
Should the Government Be in the Business of Taxing Churches?
This article by Michael Martin, ECFA Vice President, was written for Regent Law Review.
Social Security Tax for Ministers - More Complex than It Appears
Social Security Tax for Ministers - More Complex than It Appears
Overview of fundraising events and proper accounting treatment for event elements
Standard Mileage Rates
The Internal Revenue Service (IRS) establishes the optional standard mileage rates for employees to use in computing the deductible costs of operating an automobile for business, medical, or moving expense purposes.
Tax Treatment of Scholarship and Fellowship Payments
Discusses the proper tax treatment of scholarship and fellowship contributions and payments
The IRS Takes These Board Financial Responsibilities Seriously — Do You?
If you serve on the board of an organization, you’ve probably heard the term “fiduciary responsibility” and know that it applies to your role as a board member.
Tithing Charity Funds
Discusses issues relating to a ministry tithing a portion of its funds to another ministry and includes link to a tithing policy
Travel and Expense Reimbursement Policy
Travel and expense reimbursement policy for a nonprofit organization
Travel Expense Form
Sample form for families traveling with dependent children
Travel Outside the United States
Outlines the deductibility guidelines of business related travel outside the United States
Tuition Payments for Missionary Children
Discusses the deductibility of payments for missionary children’s tuition
A fund in which the principal amount (corpus) has fallen below the value of when originally gifted by the donor.
Underwater Funds Rule
Under UMIFA, an organization was prohibited from using fund assets if the value of the fund was below its historic dollar value.
Unrestricted Net Assets
Resources that have no external restriction on use or purpose.
Defines and discusses issues relating to viatical investments, investments by an organization in an individual life insurance policy
What are the Compensation Committee Best Practices for Setting CEO Compensation?
An ECFA member ministry has a compensation committee charged with the responsibility to recommend the CEO’s compensation and fringe benefits to the board each year. The committee is comprised of two non-staff board members and the ministry’s CFO. When the board receives the recommendation of the compensation committee, the CEO stays in the boardroom but does not participate in the vote. While the compensation committee records the details of the recommended compensation in their minutes, the board minutes do not reflect any details. How could the ministry improve their practices?
What to Expect from your Auditors
Details what a nonprofit should expect and look for in an audit firm
When is it Appropriate to Make an Overhead Charge to a Ministry Project?
When a ministry raises funds for a project—let’s say a building fund or a campus expansion fund—is it appropriate to make an overhead charge to the project? In other words, is it appropriate for a ministry to allocate a portion of the funds raised for the project to cover general and administrative costs and any costs related to raising the resources with the total raised less the overhead allocation used for the project?
Defines zero-based budgeting and outlines its major processes