Accounting for a charitable foundation

Accounting for a charitable foundation

Accounting in a charitable foundation is a complex but important part of its activities. Proper accounting helps ensure transparency and efficiency in the use of funds, maintain the trust of donors, and avoid legal problems. In this article, we will consider the key aspects of accounting for charitable organizations.

Legal stages of accounting for a charitable foundation

Accounting for a charitable foundation begins with proper legal registration of the organization. The main steps that a lawyer must ensure include:

• Legal advice from an accountant for a charitable foundation Registration of a charitable foundation: Preparation of the foundation's charter. Registration in the Unified State Register of Legal Entities.
• Obtaining the status of a non-profit organization: Submission of documents to the tax authorities for inclusion in the Register of Non-Profit Institutions.
• Opening a bank account: Opening separate accounts for charitable assistance and administrative expenses.
• Development of internal regulations: Development of regulations on accounting and control over the targeted use of funds.
• Ongoing legal support: Ensuring compliance of activities with legislation, including the Law of Ukraine "On Charitable Activities and Charitable Organizations".

Under what conditions can accounting services be provided?

Legal assistance on the topic of accounting for a charitable foundation can be provided that:

• Proper registration of the fund: The organization must be officially registered as a legal entity.
• Non-profit status: The fund must be included in the Register of Non-profit Organizations, otherwise the tax base changes.
• Clear financial structure: Bank accounts are required to separate administrative and target funds.
• Approved financial documents: The organization must have clear provisions on the distribution and use of funds.
• Presence of primary documents: All transactions must be documented.

Under what conditions cannot accounting services be provided?

Accounting services may be denied in the following cases:

• Lack of foundation registration: If the organization operates without official registration.
• Lack of non-profit status: Without this, the foundation is not entitled to tax benefits.
• Lack of documents: The lack of primary financial documents makes correct accounting impossible.
• Violation of legislation: If the foundation's activities do not comply with the norms of the Law of Ukraine "On Charitable Activities".
• Opacity of financial transactions: The lack of clear reporting may be the reason for denial.

How to figure it out on your own

You can do your own accounting if your organization has a small volume of operations. Here are the basic steps:

• Learn the law: Learn the basic accounting requirements for nonprofit organizations. Find out the current list of documents for a charity fund accountant.
• Use software: For accounting, you can use specialized programs such as 1C, M.E.Doc or others.
• Organize document flow: Keep all receipts, acceptance and transfer certificates, contracts.
• Prepare regular reports: Submit financial statements to the tax inspectorate and inform donors about the use of funds.
• Get advice: In complex cases, contact an accountant or lawyer to check your work.

Frequently asked questions

• How to find a lawyer on the topic of accounting accounting for a charity? Contact professional legal associations or unions that have accounting specialists. Check for recommendations from other charities or organizations that have worked with such lawyers. Use platforms to find specialists, such as LinkedIn, Up work, or specialized websites. Consider contacting law firms that specialize in the non-profit sector. When choosing a lawyer, pay attention to his experience in the charitable sector and check the reviews of other clients.
• What documents are required for a charitable foundation accountant? The charter of the charitable foundation, registered with the relevant authorities. A certificate of registration of the charitable foundation or an extract from the Unified State Register. Contracts, acts, and other documents related to the foundation's activities (for example, grants or donations). Tax reports, declarations, as well as financial documents (bank statements, invoices, etc.). Data on employees and volunteers, if any, including contracts or employment agreements.
• How much does legal advice from an accountant for a charitable foundation cost? The cost of the consultation depends on the complexity of the request and the region.
• How much does accounting cost for a charitable foundation? The cost of an accountant's services depends on the scope of work.
• How long does it take to prepare documents for an accountant of a charitable foundation? Preparing basic documents for an accountant can take from 1 to 2 weeks. If new policies or procedures need to be developed, this process can take up to a month. Preparing reports for tax authorities or auditors takes from several days to several weeks, depending on the volume of data. In the case of urgent requests (for example, grant reports), acceleration to 1-3 days is possible. It is recommended to discuss the time frame with the accountant in advance, taking into account the complexity of the task.

What does the cost of an accountant's services depend on?

Accounting for the Ukraine 2024 Charitable Foundation is a necessary element that ensures effective and legal financial management. Turning to professionals or carefully studying the rules will help you avoid mistakes and ensure the transparency of your activities. The cost of accounting for a charitable foundation depends on the following factors:

• Scope of work: Number of transactions that need to be accounted for.
• Complexity of the foundation's activities: Availability of international grants, a large number of donors, etc.
• Form of cooperation: Work on a permanent basis or one-time task.
• Level of qualification of the specialist: Experienced accountants and companies usually charge higher fees.
• Location of the foundation: Services may be more expensive in large cities.