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FASB Extends Deadlines in Response to Overwhelmed Preparers

Lease Accounting Changes

Edmund Fosu-Laryea, CPA

Following concern over the new lease accounting changes, the Financial Accounting Standards Board (FASB) has made the decision to delay the effective dates for three major standards. The new Accounting Standards Update (ASU) will give private companies and certain other entities an adoption extension on the new standards for leases, credit losses (CECL), and hedging.

This delay will allow preparers more time to understand and implement the changes and give these groups the opportunity to watch and learn how well-resourced public companies respond to the changes. Here is what you need to know.

New Effective Dates

 Fiscal years beginning after December 15, 2018Fiscal years beginning after December 15, 2019Fiscal years beginning after December 15, 2020Fiscal years beginning after December 15, 2022
SEC filers + *Smaller reporting companiesHedge Accounting + Lease Accounting Credit Loss  *Credit Loss
All other public business entities + **Employee benefit plans and certain nonprofitsHedge Accounting Lease Accounting**    Credit Loss
Private companies and all others    Hedge Accounting + Lease AccountingCredit Loss

**Employee benefit plans that file or furnish financial statements + nonprofits entities that have issued or are conduit bond obligors for securities that are traded, listed, or quoted on an exchange or over-the-counter market.

The new lease accounting standard will take effect for the majority of nonprofit organizations

for fiscal years beginning after December 15, 2019, and in interim periods within fiscal

years beginning after December 15, 2020. Early adoption is permitted for all organizations.

If you have a question about how the lease accounting changes and delays will affect your nonprofit, please give one of the professionals in our office a call today.   

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2019 winner of CPAsNET’s - A Great Place to Work Award.

2019 winner of CPAsNET’s – A Great Place to Work Award.

Barbacane, Thornton & Company is  the 2019 winner of CPAsNET’s A Great Place to Work Award. Recognized for their standard of excellence as an employer of choice, Barbacane, Thornton & Company LLP joins a select number of firms nationwide to earn this reputable and highly competitive award. CPAsNET’s A Great Place to Work Award is employee driven. Data is compiled and assessed from a combination of employee feedback and firm data including workplace benefits, policies, practices, philosophies, systems and demographics. Participating firms must meet a minimum standard of workplace excellence to be considered for the award.

Participation in this survey allows member firms to benchmark their workplace policies and practices to the marketplace. “Through our participation in this survey, we have been able to gain valuable insights into employee engagement and how our benefits compare nationally,” said Pamela Baker, Managing Partner.

In addition to Barbacane, Thornton & Company LLP, six other accounting firms were also recognized as a 2019 winner of CPAsNET’s A Great Place to Work Award. “Being voted as a great place to work today is an honor. Employees have high standards today,” said Sarah Dobek, The President of CPAsNET, regarding the integrity of this award. “On behalf of CPAsNET, we congratulate our member firms that are dedicated to stepping up to the plate and making their firm a great place to work” said Dobek.

CPAsNET is a leading consortium of independent accounting firms that represent more than 100 partners, 300 professional associates and 500 employees. Based on its strategic partnership with audittrust international CPAsNET’s global reach represents more than 120 firms in 108 countries all over the world. Member firms have pooled their resources to provide their clients with the local, national and international prospective needed to prosper in challenging markets and times.

Barbacane, Thornton & Company LLP was formed in 1978 and has been serving the public sector with audit and advisory services to enable them to better serve their communities. The partners are members of the AICPA,  and the  Delaware and Pennsylvania  Society’s of Certified Public Accountants, .

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How the Taxpayer First Act Will Impact Nonprofits

How the Taxpayer First Act Will Impact Nonprofits

By: Jeffrey A. Kowalczyk CPA CFE CGAP, Partner

Barbacane, Thornton & Company

The Taxpayer First Act (the Act) of 2019 was signed into law on July 1, 2019. The bill, having gone through a few changes on its way to the president’s desk, passed with bipartisan support – a rare thing in Washington these days. The law aims to reform the Internal Revenue Service (IRS) by making it more taxpayer-friendly and has been praised by the American Institute of Certified Public Accountants (AICPA). The summary of the bill, its titles and subtitles signal a much-needed pivot to the way the IRS fits into the 21st-century economic narrative. Among the areas of impact, the main themes include customer service, enforcement procedures, cybersecurity and identity protection, management of information technology, and use of electronic systems.

While this law offers many provisions for individual taxpayers, it also affects nonprofits. The law modernizes filing requirements that if ignored, will result in significant consequences. Any nonprofit organization that fails to uphold these new requirements for three consecutive years will automatically lose its tax-exempt status.

Starting in 2021, almost all tax-exempt organizations will file Forms 990, 990-PF, 990-EZ, and 990-T electronically, regardless of their asset status or their number of returns. The Act also requires the IRS to make Form 990 available to the public as soon as practicable in a machine-readable format. The implication here is that this information will be readily available to agencies, so nonprofits should take care to position the form for public consumption.

Nonprofits need to take a few additional details into account.

First, the Act requires the IRS to notify organizations that have not filed a return for two consecutive years. Chances are, your filing procedures are up to snuff. If they aren’t, don’t allow a lapse in communication stymie an opportunity for a second chance. Ensure the IRS has accurate contact information.

Second, the Act mandates that new e-file procedures go into effect for filers at different rates. For instance, nonprofit filers whose fiscal year begins on July 1, 2019, will receive a transitional reprieve.  The new e-file procedures are effective for years beginning AFTER July 1, 2019. See table below:


 BeginningMUST E-File ON
CalendAr year filersJanuary 1, 2020May 15, 2021
Fiscal year filersJuly 2, 2019November 15, 2020+
fiscal year filersJuly 1, 2019November 2021

Nonprofits whose gross receipts amount to less than $200k and total assets less than $500k, and organizations that file a 990-T can expect transitional relief. The new law will allow the IRS to delay the mandatory filing for up to two years.

For most, the Taxpayer First Act is a welcome change. The Act helps protect business owners from IRS seizures and allows them to avoid the expenses and time-consuming process of having to go through the courts to reclaim their assets. One of the most critical components of the new law is the attention to cybersecurity and customer service. For nonprofits, the changes are aimed at increasing accountability and transparency.

If you have any questions about the law in its entirety or want to know how your organization should prepare for the changes, give the professionals in our office a call today.

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Operational Transparency Is the Key to Effective Crowdfunding

Operational Transparency Is the Key to Effective Crowdfunding

By: Steven Kutsuflakis, CPA, Partner

Barbacane, Thornton & Company

In recent years, crowdfunding has grown in popularity as means of fundraising. Crowdfunding is a powerful tool to raise money for various charitable enterprises. But did you know that it can build your donors’ trust as well? According to a study from Indiana University’s Kelley School of Business, crowdfunding campaigns use two transparency tools to attract donors. One method is more effective than the other.


The study of over 100,000 campaigns benefiting victims of emergencies revealed both operational updates and traditional certification positively impacted campaigns. However, researchers found that each additional work‐related word in an update (operational transparency) increases donations on average by $65 per month.  Certification (conventional transparency), on the other hand, raises funds on average by $22 per month.


By offering work-related updates on the site, organizers are giving donors unique and in-depth insight into the cause, thus increasing their trust in their efforts. Updates vary by campaign but generally include reports, photos, videos, testimonials, and media coverage.


The findings of this study are especially encouraging to those looking to set up a campaign to address an acute need. Online crowdfunding platforms pave a simple way to fleet-foot response and frequent updates boost the campaign effectiveness.


If you are new to crowdfunding and are not sure where to start, we’ve outlined a couple basic steps below.


Crowdfunding Basics

  1. Determine your goal, then add at least 30%. This cushion will protect your cause from being underfunded and provide a buffer for third-party processing fees. You can also consider assigning giving levels based on your audience. If you have 1,000 active donors and want to raise $10,000, you could set your levels to cover casual ($50), strong ($100), and generous ($500) donors.
  2. Choose a platform site. Indiegogo, GoFundMe, KickStarter are the mainstream options; Causes, Fundly, Donately, and DonateKindly are the most popular choices among nonprofits. Work with providers to determine which one will be the most cost-effective and fit your nonprofit’s unique needs.
  3. Designate an owner or team to manage the campaign from start to finish. The marketing person should
    1. Design the fundraising page according to your brand. Craft a sincere but catchy mission statement; frequently post updates, including images, videos, and graphics about your cause and its recipients; and create a hashtag to point people to your campaign page.
    2. Determine a marketing strategy and promotion schedule.
    3. Use social media and email to advertise your campaign.

Remember, operational transparency via frequent updates is the key to an effective crowdfunding campaign! Preplanning your communications and dynamically interacting with your donors will give your campaign the edge it needs to connect with donors and build trust.

  1. Consider using products to incentive donors. Some nonprofits find grand success when they offer fundraising products in conjunction with their campaign. Choose meaningful items that showcase your brand and your cause.
  2. Be future-minded. Don’t forget to capture donor data. Some crowdfunding platforms offer CRM integration, making this process as seamless as possible. If you don’t have a way to automate this step or a CRM system, turn to manual entry. Capturing donor information is critical to growing your donor base. Your overall mission is best served by cultivating a relationship with your donors. Recording the data you receive from donor platforms is a great way to gain insight.
  3. Follow through on the basics. As with all your fundraising efforts, you must establish a follow-up strategy. Don’t forget to send donation receipts and thank you notes on time, within 24 hours and three days, respectively. Donors also like to receive updates, especially when you reach your fundraising goal! Each touchpoint is an opportunity to keep your organization and cause top of mind. Try your best to personalize your follow-up communications, taking into consideration their names, credentials, and donor levels. For instance, addressing a donor by the wrong name is a faux pas, but failing to thank a major donor personally is a mortal sin.


The research report, Operational Transparency on Crowdfunding Platforms: Effect on Donations for Emergency Response, was published in the online journal Production and Operations Management.


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4 Ideas for Nonprofit Workspace Giving Programs

4 Ideas for Nonprofit Workspace Giving Programs

By: Edmund Fosu-Laryea CPA

Barbacane Thornton & Company

An increasingly common thread among workers in nonprofit and for-profit companies is their desire to participate in community service. In general, staffers of the 21st century are inclined to give. According to Classy, an online fundraising software creator,

  • 63% of young GenXers and Millennials prefer to work for companies that support social causes, and
  • 54% of employees who take pride in their organization’s contribution to society feel engaged in their position.

The warm glow of giving shines exceptionally bright amongst millennials. According to a Deloitte study, 70% of millennials strongly favor companies committed to the community. The same study reported that 55% of millennial workers felt proud to work for companies that frequently volunteer. With millennials making up the largest segment in the workforce, these statistics should influence your decision to implement a workplace giving program, especially in the nonprofit sector.

It is tempting to see nonprofit work as inherently charitable. However, the truth is, nonprofit organizations are the most qualified to model effective workplace giving programs. And their workers? They are naturally eager as beavers in most cases.

Workplace giving firm, YourCause recently released its annual report, Industry Review: Employee Engagement and Corporate Social Responsibility. The findings highlight a few robust strategies to help organizations reach high levels of employee participation while offering professional development benefits. The following four trends are quickly becoming best practices because of their proven effectiveness.

  1. Mix and Match Opportunities

Offering a combination of giving opportunities yields a higher rate of participation. Consider creating a menu of options from the ideas below:

  • Volunteer Time Off (VTO)
  • Pro Bono Service / In-kind donations
  • Automatic Payroll Deductions (offer a variety of options)
  • Matching Gift Programs
  • Peer-to-Peer Fundraising Challenges
  • Events (charity sporting events/fundraisers/networking events)
  • Seasonal or Holiday Campaigns (Giving Tuesday/Martin Luther King Day)
  • Disaster Relief Partnerships
  1. Year-Long Campaigns

According to YourCause, calendar-year giving programs result in more dollars donated per employee. Perhaps it is because people appreciate having control over their decisions to give. By running a year-long campaign, you can tap givers that need to align giving with their budgets. You may also appeal to those who value their free agency.  As you plan your year-long campaign, take a cue from short-term campaign strategies to boost engagement. Keep the campaign front and center by increasing communications, providing regular updates throughout the year, and hosting semi-annual or quarterly events.

  1. Make it Easy, Make it Plastic

Cash is king, but plastic is elastic. When organizations offer employees the flexibility of giving via credit card, they often see higher levels of giving. Organizations that go a step further to cover credit card processing fees see even higher levels of engagement. The pièce de résistance in plastic giving, however, are “cause cards,” a unique offering from CSR platforms like YourCause. Card programs vary; however, they are always a type of giving grant. In other words, the organization provides funds on the cards for its employee to designate to the charity of their choice. The company can allocate cards for employee rewards or campaign participation. Ultimately, “cause cards” incentivize volunteer participation and provide a unique tax credit for the organization.

 Don’t Forget Your Retirees

According to the YourCause report, retirees contributed almost 4.5 times more dollars and logged nearly eight times as many volunteer hours than full-time employees. Don’t neglect to reach out to your retirees when running a campaign. This untapped segment is a secret weapon for a few reasons. First, retirees generally have the bandwidth to show up. Second, giving is usually written into their retirement plan. Third, our mature counterparts see the value of service in a way we can’t, partially due to their broader perspective. When they return to support a campaign, their participation is nothing short of inspirational.

Nonprofit organizations are missing a huge opportunity when it comes to leveraging the benefits of workplace giving programs. It is time to start looking at the ways workplace giving and volunteer programs can enhance employee engagement and satisfaction, and boost your nonprofit’s brand and effectiveness. If you’d like to read the YourCause report, visit

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Managing Partner’s Message – September 2019

Pamela W. Baker CPA Managing Partner

Back to school!! Everyone that I have come into contact with recently has mentioned the dread/excitement/anticipation/uneasiness/fear of this annual ritual that happens every August/September depending on where you live and when schools start. But why does it matter if you are not in school or have children in school? I have long ago passed the time of having to prepare for the start of another school year – but I continue to get wrapped up in the hype that surrounds that momentous first day of school. Who doesn’t love seeing that first grader all dressed up in their new school clothes, new backpack and lunchbox, getting on the school bus? It always gives me pause to think there goes our future – I hope that every one of those starting out finds their path to the excitement of life -long learning.

For our firm, back to school means school audits are gearing up. Remember fire drills the first week of school? Our staff are regular participants in the annual fire drills that indicate schools are back in session and everyone needs to know the rules! We will be traveling across Delaware and Pennsylvania for the next three months, conducting audits of a number of public schools. In addition, several of our nonprofit clients have June fiscal year ends. We will be visiting a number of them as well to ensure they are able to have timely and reliable audited financial statements – just in time for grant applications.

What did we do on our summer vacation you might ask? For the past three months we have been conducting the audits of numerous housing authorities. Our Manager, Edmund Fosu-Laryea has been particularly focused on the issues that surround these governmental entities. He attended the Maryland Association of Housing Authorities (MAHRA) conference, is working on initiatives to incorporate accounting/auditing education for low income residents, and recently joined the Board of Ingleside Homes, Inc., whose mission “is to ensure that every senior, regardless of their level of income, has an opportunity to live the fullest possible life at his or her highest level of independence.”

Several of our other staff have been pursuing advanced knowledge in data analytics and how the tools that we use can enhance our effectiveness and lend increased value for our clients. Stay tuned for updates on the technology front!

Our management team took time this summer for a retreat to reflect on our past year and to plan for the future. We spent considerable time challenging ourselves to define our WHY. The culmination of our work was our new WHY statement:

ADVOCATING TRUE ACCOUNTABILITY SO OUR CLIENTS CAN BETTER SERVE THEIR COMMUNITIES. It is our goal to continue to partner with our government and nonprofit clients to ensure good internal controls and sound financial reporting – our contribution toward the mission of each individual entity. Please mark your calendars for October 31st when we plan to host our second annual nonprofit conference – we have some tremendous content lined up – you won’t want to miss out on this treat!

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Pam Baker, CPA, CGFM – Managing Partner – A Recipient of PICPA’s 2019 Women to Watch Awards

Pam Baker, CPA, CGFM – Managing Partner – A Recipient of PICPA’s 2019 Women to Watch Awards

Women of the PICPA have consistently exemplified leadership and mentorship in and outside of the accounting profession throughout the association’s history. They have served as thought leaders and mentors to colleagues within their firms and businesses, and to affiliates of community and professional organizations through their innovative volunteering initiatives.

In recognition of their accomplishments and offerings, the PICPA and the AICPA and present their third annual Women to Watch Awards program.

Read more about the PICPA Women To Watch Awards

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How the New Tax Law Continues to Impact Giving

By: Jeffrey Kowalczyk, CPA CFE CGAP

Since the roll-out of the TCJA in 2017, charitable giving has found a new rhythm. While some areas of charitable giving are in decline, others are rising. In fact, according to Blackbaud’s annual Charitable Giving Report and a Fundraising Effectiveness Project (FEP) recent study, overall giving is on the rise (1.5%, 1.6%, respectively). It appears that the ominous predictions on the demise of charitable giving have yet to come to fruition.

 The Philanthropy Outlook 2019-2020, produced by researchers at the Indiana University Lilly School of Philanthropy, predicts that total giving is expected to increase by 3.4% in 2019 and by 4.1% in 2020. This news is a pleasant surprise to those who only months ago were bracing for demise. The report forecasts a season of growth due mainly in part to above-average progress in the S&P 500 in the preceding and projected years, increases in personal income, and expansion of the prior years’ GDP. Understanding your donors is a great way to anticipate your next move. The Outlook’s insight into expected giving patterns can help you prepare a solid strategy for the future. Below, we have summarized the trends that should be on your radar.

Concerning Individuals

  • Giving will continue to climb in 2019, rising above the year 10-average; however, in 2020, individual donations are expected to surpass the historical 10-year, 25-year, and 40-year annualized average.
  • Growth in personal income, close-to-average growth in household and nonprofit net worth, and above-average growth in the number of itemizers are all cited as factors in influencing giving over this two-year period.

Concerning Foundations & Estates

  • Foundations are expected to increase giving by 7.0% in 2019 and by 6.1% in 2020.
  • Strong growth in the S&P 500 offers foundations room to run with their budgets.
  • As the GDP also continues to climb, a similar trend in giving will emerge; however, analysts note that foundations may choose to defer giving in a period of economic downturn.
  • Estates are expected to increase their giving by 5.4% in 2019 and by 5.6% in 2020.

Concerning Corporations

  • Projections for corporate giving predict an increase of 3.2% in 2019 and 2.6% in 2020.
  • GDP and above-average growth in corporate savings are the reasons for this anticipated growth. However, it is important to note that these numbers are at risk for modulation. An increase in profits sometimes defers company resources away from philanthropic initiatives.

There are conditions; however, that could negatively affect this outlook. The Philanthropy Outlook itemized three potential deviation scenarios.

  1. The Uneven Growth Scenario uses trickle-down economics to explain an increase in individual/household and foundation giving.
  2. The Flat Growth Scenario shows total giving reaching the point of stagnation or decline due to a flattened market and economy.
  3. The Economic Downturn Scenario predicts imminent recession based on trade policy, stock market volatility, and rising interest rates.

While this forecast will help put nonprofit leaders’ minds at ease, it should not become an excuse to become too comfortable. While we continue to monitor tax law changes and their associated impacts on nonprofits, we encourage you to prepare for various scenarios. The professionals in our office can help you come up with a solid strategy to help you sustain and grow your organization. Call us today.

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Foundation Center and GuideStar Join Forces to Become Candid

By: Steven Kutsuflakis, CPA

Foundation Center and GuideStar Join Forces to Become Candid.  What happens when two notable names in the nonprofit industry combine forces? A powerhouse – most appropriately called Candid. The long-awaited merger between GuideStar and the Foundation Center is the result of over ten years of conversations, data mining, and patience for the right time. Candid, a 501c3 nonprofit organization, strives to be a one-stop shop for information on grants and nonprofits.

The strength of the Foundation Center as the leading source for insight on philanthropy worldwide, combined with GuideStar, the leading source of information on nonprofit organizations, gives Candid a solid foundation for success. Although a “new” organization, Candid has a combined 80 years’ worth of experience with various forms of data under its belt.

The new organization, led by Bradford Smith, former president of Foundation Center and Jacob Harold, former president and CEO of GuideStar, will be governed by a board composed of the current trustees of Foundation Center and GuideStar.

According to Smith, the two organizations are joining forces to build on each other’s strengths, using a natural synergy to connect people who want to change the world with the resources they need to succeed. Candid will centralize its inherited data and intelligence in order to inspire, support, and promote smarter giving among its 16 million users.

As Candid continues to synthesize their resources, users are encouraged to access Foundation Center and GuideStar products and services through their respective websites.

With Candid’s upcoming launch, now is a great time to evaluate your organization’s presence on nonprofit watch-dog sites and ensure the information they communicate about your organization is accurate and informative. If you would like to talk about using sites like Candid to maximize your outreach to grantors and donors, please give our office a call.






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Are You Prepared for the Impact of Disaster?

Are You Prepared for the Impact of Disaster?

By: Edmund Fosu-Laryea, CPA

Are You Prepared for the Impact of Disaster? Most nonprofits expect to face challenges in their operations, however many never expect natural disasters, so they neglect to prepare for them. A comprehensive disaster plan can mitigate total devastation and allow your organization to restore operations in a timely manner.

Portland State University and the Nonprofit Association of Oregon (NAO) issued a state-wide survey of Oregon’s nonprofits. The report found that a majority of the organizations neglect 20 of the 36 activities the NAO associates with disaster-resilience best practices. The findings are revealing, considering the respondents live and work in a state that experiences (or has the potential to experience) almost every natural disaster.

It is easy to cast stones, but if you are honest, would you be able to rank your organization’s disaster resilience higher than the nonprofits in the Oregon study?

Below are a few of the NAO’s best practice activities for disaster planning. How many of the items can you check off your list?

  • Attend meetings and discussions, or heard talks about how a major disaster could affect the region
  • Had your building(s) inspected by a structural engineer or other building professional
  • Formed a disaster preparedness committee
  • Developed a written disaster plan for your organization
  • Developed an evacuation plan for your building
  • Obtained an emergency kit for use by your organization in a disaster
  • Made plans to share resources (building, staff, materials, etc.) with other organizations (including government) in the event of a disaster
  • Developed a notification system for staff/volunteers activated in case of an emergency
  • Developed a plan for how your organization would continue operations after an emergency/disaster (contingency plan or business continuity plan)
  • Identified long-term recovery resources (e.g., insurance, physical resources, financial resources)

We cannot stress enough the importance of having a plan in place. Crafting the right plan (or any plan) takes time and resources. Most of the nonprofits in the NAO study cited a lack of personnel and financial resources as a barrier to creating a plan. If you do not have a plan or have not addressed a majority of the items above, the following questions are a great place to start and require minimal resources. Your answers will reveal the nuts and bolts of what it will take to assure continuity of business:

  1. What functions are essential to fulfilling your mission?
  2. What must be done to resume these functions after an interruption of operations?

If you would like to download a copy of the NAO’s robust preparedness checklist, please click here. It is a fantastic resource to help narrow your field of vision. We know that creating a plan takes a healthy amount of due diligence. The professionals in our office are standing by to answer your questions and help you craft the right plan for your organization. We look forward to your call.

About Barbacane, Thornton & Company LLP
Barbacane, Thornton & Company LLP is a highly regarded, regional certified public accounting and consulting firm specializing in auditing and tax services for government agencies and nonprofits. For more information about Barbacane, Thornton & Company LLP, please call (302) 478-8940 or visit




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