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Taxes are a significant cost for any profitable organization. When business professionals discuss managing the risks associated with taxes, they are frequently referring to the tax implications of unfavorable audit opinions, improper recording of tax assets and liabilities on a firm’s balance sheet, or noncompliance with tax laws. Tax Risk Management (TaxRM), however, is much more than the sum of these elements.TaxRM is an enterprisewide process that is affected by a company’s board of directors, management and/or other personnel, and is designed to minimize tax liabilities and maximize compliance, each within the guidelines of tax laws. TaxRM processes enumerate, analyze…
Similar to for-profit corporations, nonprofits and charitable organizations (hereafter “nonprofits”) are highly susceptible to myriad risks. Faced with pressures created by today’s economic environment, nonprofits participate in a fiercely competitive environment. Barriers to entry for new organizations are low, and donors can easily shift their giving to alternate organizations. Additionally, nonprofits are generally staffed with employees and volunteers who are first committed to helping the organization achieve its mission. The achievement of this mission requires considerable resources, often leaving less than adequate time for these individuals to establish and/or maintain enterprise risk management (ERM) processes.When properly implemented, “ERM processes can…
Sunday, 26 July 2009 20:00

Taking responsibility

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Over the past decade, there has been a radical change in the face of entrepreneurship. While typical entrepreneurs are focused on profit, many of today’s entrepreneurs have become focused on the triple bottom line — profit, people and planet. That has created a new class of social entrepreneurs who are focused not only on how they are doing financially but on what they are doing socially and ecologically to help the community and the planet. “Companies have a responsibility to effect change on the ecological and social issues in the world,” says Dennis Barsema, a social entrepreneur who is a…
Monday, 23 February 2009 19:00

Protecting your assets

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In the current atmosphere of economic uncertainty, financial institutions and businesses alike are under pressure to reduce risk of financial loss as well as continue their vital partnerships. In light of the turbulent markets and the resulting instability of some banks, it’s in the best interests of companies to protect their interest-bearing deposits through the Certificate of Deposit Account Registry Service (CDARS), which protects funds over today’s $250,000 FDIC limit. “These days, people are looking for a little stability,” says Diana Brockway, vice president of treasury management at MB Financial Bank. “Businesses can gain peace of mind by looking at…
Tuesday, 23 February 2010 19:00

Helping the helpers

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While many stories have been written about the struggles of businesses, few detail the hardships hitting the nonprofit sector. Private donations to charities doubled from 1987 to 2007 but dropped 6 percent in 2008. Some charities, such as human service organizations, saw donations fall nearly 13 percent last year. Foundation endowments and giving are down across the board, and many state and municipal governments facing deficits are reducing spending on social programs. Further compounding the problem is a general decrease in government spending. Many nonprofit organizations are facing a changing funding environment coupled with a rising need for services in…
Tuesday, 25 November 2008 19:00

New rules for nonprofits

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The changes to IRS Form 990, Return of Organization Exempt from Income Tax, beginning with tax year 2008, are the most significant in the last 30 years. Driven by Congressional concerns over nonprofits being used as illegal tax shelters and as fund-raising vehicles for terrorist groups — as well as the Pension Protection Act of 2006 — these changes will require more transparency and disclosure. “These changes are important to all of us — nonprofit employees, board members and donors alike,” says Harry Cendrowski, CPA/ABV, CFE, CVA, CFD, CFFA, managing member of Cendrowski Corporate Advisors LLC. “In addition, if you’re…