Form 990: Schedule G changes tracking of fundraising, gaming

With new Form 990 tax return requirements taking effect May 15, you’ll need to become more aware of, and advise on, how your nonprofit tracks information for its tax return. One new schedule that will likely apply to many organizations is Schedule G, “Supplemental Information Regarding Fundraising or Gaming Activities.”

If your nonprofit reports revenue of $15,000 or more from one of the following, you must prepare Schedule G:

1. Fundraising activities. Activities to solicit funds include e-mail, mail, phone and in-person solicitations. Your nonprofit must report all agreements for professional fundraising services. And, for those individuals or entities to whom you paid at least $5,000 for fundraising services during the year, you must list the 10 highest paid. Additionally, you need to report the nature of the service, whether the fundraiser had custody or control of the contributions, and the total receipts connected to the fundraising services. You also must disclose the amount paid to, or retained by, the fundraiser and the amount paid to, or retained by, your nonprofit.

2. Fundraising events. All organizations that report $15,000 or more in gross receipts from fundraising events or special events — such as a golf outing, a charity dinner or an annual ball — must supply additional information about particular events that raised $5,000 or more. Direct expenses from the event need to be reported in separate line items for cash prizes, noncash prizes and rent/facility costs. There’s also a catchall line for other direct expenses. Although your organization doesn’t need to detail these, the IRS has indicated that nonprofits should retain in their records a summary of all other direct expenses in case they’re requested in an audit.

3. Gaming activities. Extensive reporting is required if you use gaming activities — such as bingo or raffles (including pull tabs) as part of your fundraising. In addition to gross revenue, you need to report the same direct-expense information as you do for fundraising activities. And you must indicate in which state(s) the gaming activity is conducted, whether you are licensed appropriately in that state and the number of volunteers that were needed to produce the event. The IRS also wants to know the percentage of volunteer labor used for the activity. Although the IRS doesn’t give a reason why this information is important, it is likely trying to ascertain the reasonableness of the wages actually paid for the particular event. •